Chemplast Sanmar, the Chennai-based specialty chemicals company, on Saturday reported a 41% jump in its profit after tax (PAT) to Rs 41 crore for the first quarter of FY’23 as compared to Rs 29 crore in the same quarter last fiscal. Total revenues of the company stood at Rs 1,411 crore as compared to Rs 960 crore, registering an increase of 47%.
Ramkumar Shankar, MD, Chemplast Sanmar, said, “Despite a challenging environment, we delivered another quarter with a strong 47% growth in revenues and 28% growth in Ebitda. Sequentially, however, our profits are lower than Q4 of FY22 due to the flood of PVC exports from China into India due to the Covid-related lockdowns in that country. Energy costs have also gone up, largely due to a spike in coal and natural gas prices.”
In the first quarter, the company commissioned the first of its multiple capex projects which was announced at the time of the IPO – the debottlenecking of the suspension PVC capacity at Cuddalore plant.
On the pricing front, PVC prices have come under pressure as the lockdowns in China have had an impact on consumption centres whereas the production centres were un-impacted. As a result, excess PVC inventory that is being built up in China is being exported out of China and that is keeping the prices low across the region. However, feedstock prices have also come down quite significantly following this, and indeed on a marginal basis, the spreads between PVC and VCM are still healthy.
“The demand environment across our product portfolio continues to remain strong. The medium to long- term prospects for our products are positive, with demand growth estimated to outpace growth in supply, ” he said.
Chemplast Sanmar is a dominant producer of specialty paste PVC, having significant presence in the custom manufacturing business and through its wholly- owned subsidiary, is the second largest producer of suspension PVC in the country.