Chemplast Sanmar Limited (NSE: CHEMPLASTS) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Ramkumar Shankar — Managing Director
N Muralidharan — Chief Financial Officer
Krishna Kumar Rangachari — Managing Director – Custom Manufactured Chemicals Division
Analysts:
Sanjesh Jain — Analyst
Ankur Periwal — Analyst
Dhruv Muchhal — Analyst
Rohit Nagraj — Analyst
Madhav Marda — Analyst
Abhijit Akela — Analyst
Madhur Rathi — Analyst
Bharat Sheth — Analyst
Krishan Parwani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Chem Plast Sunmar Limited Q4 FY ’25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Ram Kumar Shankar, the Managing Director. Thank you, and over to you, sir.
Ramkumar Shankar — Managing Director
Thank you, and good morning, everybody. On behalf of Kemplar Sunmar Limited, I extend a very warm welcome to everyone joining us on our call today. On this call, I’m joined by our CFO, N; Dr Krishnakumar Rangachary, who heads our Custom Manufacturer Chemicals division; and FGA, our Investor Relations Advisor.
I hope everyone has had an opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchange website and on our company’s website. Taking a closer look at our performance, we closed FY ’25 with a top-line of INR4,346 crores and EBITDA of INR219 crores. This is a significant improvement over FY ’24 where we had registered sales of INR3,923 crores and EBITDA of INR26 crores. While that is thus a relative improvement, however, the headwinds in the PVC industry still persist, primarily driven by continued oversupply at unfairly low prices.
This has not only adversely affected us but has also impacted the broader domestic industry. The dumping of suspension PVC, particularly from China and PVC, especially from the European Union has created significant pricing pressures resulting in margin compression. For the quarter gone by, there was a marginal improvement in the overall business.
We have registered revenues of INR1,151 crore, a 10% growth on a year-on-year basis. Coming to the business-specific performance, the Specialty Chemicals segment saw volumes of 98,339 tonnes in FY ’25, reflecting a 37% year-on-year growth. This was both due to organic growth in the custom manufactured chemicals business as also the increased volumes of specialty Paste PVC from the recently commissioned plant.
On the paste PVC side, the Indian demand for Paste PVC in FY ’25 grew by around 11% to 178 kt. Our sales were better both on year-on-year basis and sequentially with the improvement in operating rates of the new Paste PVC plant. We expect to reach an optimum utilization in the new Carlour plant on a steady-state of approximately 10 kt per quarter in the next two quarters. Towards the end of March ’25, the Government of India imports anti-dumping duty on PVC resin imported from China, Korea, Malaysia, Norway, Taiwan and Thailand for a period of five years.
While there was some benefit, the impact of this has not been fully realized yet due to the increase in imports from the EU and Japan. The authorities have since initiated an anti-dumping duty investigation on these geographies also. We are hopeful that the outcome will be favorable. On our custom manufactured chemicals business, as global innovators look to expand their outsourcing to India and diversify the supplier base, we see a significant opportunity to strengthen our position as a trusted partner.
Backed by robust infrastructure, a strong focus on safety and a commitment to sustainability, we are well-positioned to tap into this growing demand. With stable production norms, this division continued to deliver strong revenue growth of over 80% during the year. We have surpassed the INR500 croree milestone this year-on sales. Activities for Phase-3 of the multipurpose Block 3 is expected to be completed by Q3 of FY ’26. We are fully committed to growing this business further and we have adequate land and requisite infrastructure to set-up additional multipurpose blocks, be it at our current location at Gai or at our coastal location at Karika.
On the value-added chemicals business, this portfolio includes caustic soda, chloromethanes and hydrogen peroxide. Volumes for our value-added chemicals increased by 6% in the quarter on a year-on-year basis and 19% in FY ’25, driven by caustic soda and hydrogen peroxide. Coming to suspension PVC, the domestic demand for suspension PVC was impacted to some extent due to delays in garment projects and inventory pressures across the value chain.
It is expected that the government-related procurement would kick-start in Q1 of the current financial year, which will bolster the demand in this segment. On a year-on-year basis, however, the apparent domestic consumption of SPVC grew by 8% from just over 4 million metric tons in FY ’24 to 4.3 million metric tons in FY ’25 . The anti-dumping on suspension PVC has not yet been implement implemented, awaiting a judicial decision on the exclusion of certain grades. Internationally, China continues to dump PVC into India due to sluggish growth in its economy and in particular housing sector with the multiple stimulus packages are not failing to boost domestic demand yet. We are thus seeing large volumes of suspension PVC imports coming in from China. In FY ’25, the imports from China surged to around 1.2 million metric tons from only around 250,000 metric tons just three years ago. Similarly, we are seeing a surge in dumping from certain other countries as well. We remain optimistic about the implementation of anti-dumping duties on various countries in the near-future. This measure will create a level-playing field for domestic players. Now I’d like to take a couple of minutes to talk about our upcoming capex, which has been approved by the Board during this quarter. Strategically, specialty chemicals continue to be an area of focus for the company and we have identified R32 hydrofluorocarbon refrigerant as a key specialty chemical contributor for this growth. R32 refrigerant has become the go-to choice for air-conditioning systems and it requires less volume than the earlier generation of refrigerants to achieve the same cooling effect, making it more efficient in terms of energy consumption. Being a single component refrigerant, it is easier to handle and recycle compared to complex blends. Currently, we have an existing R22 production capacity of approximately 1,700 metric tons at and process strong expertise in fluorination chemistry. Given this, the R32 production is a logical and synergistic move for us, leveraging our existing capabilities and infrastructure. The key rationale behind this initiative lies in our proven track-record and technical proficiency in handling fluorination processes, which will serve as a strong foundation for the successful execution of this expansion. The investment for this greenfield R32 project will be around INR340 crores and we expect to complete this by October 26. Looking ahead, we remain optimistic about an improved pricing environment and the revival in-demand across our product portfolio by the second-half of FY ’26. As a group, we are sharply focused on strengthening our capabilities in the Specialty Chemicals segment with a clear intent to expand our presence in the value-accretive chain. Now I’d like to invite our CFO, Baran, to walk you through the financial performance of the company.
N Muralidharan — Chief Financial Officer
Thank you,, and a very good morning to all the participants on the call. Talking about the performance in Q4 FY ’25 on a consolidated basis. The revenue for the quarter stood at INR1,151 crores, a growth of 10% year-on year-on-year. Our EBITDA for the quarter stood at INR37 crores compared to INR21 crores of Q4 FY ’24.
The net loss for the quarter was at INR54 crores. In view of the subdued performance over the last couple of years, have downgraded the long-term ratings of the company and the subsidiary CCVL to A-plus with stable outlook from AA minus with negative outlook. However, going to the comfortable cash position, the short-term rating of A-plus — AA1 plus, which is highest possible has been reaffirmed. Now coming to our quarterly segment-wise performance.
Specialty chemical revenue stood at INR556 crores, marking a 50% year-on-year increase, led by steady growth from both Page PVC and CMC business. Value-added chemicals recorded a significant 43% year growth on year-on-year basis at INR170 crores, primarily driven by higher caustic soda prices and volumes.
Suspension PVC revenue declined by 5%, amounting to INR575 crores, mainly due to higher stock of inventory that we carried at the year-end. Now coming to the full-year highlights, on a consolidated basis, the revenue stood at INR4,346 crores, a 11% year-on-year increase. EBITDA improved significantly from INR26 crores in FY ’24 to INR219 crores in FY ’25, driven by increase in contribution almost across all products. Net loss came in at INR110 crores for FY ’25 compared to net loss of INR158 crores in FY ’24. Net-debt stood at INR1,117 crores at the end-of-the year.
And to talk about the segment-wise highlights for the year, Specialty Chemicals revenue came in at INR1,764 crores, marking a year-on-year growth of 53%. This growth was primarily driven by increased sales volumes of Paste PVC and an over 80% growth in CMC business. We expect Specialty Chemicals to drive the growth in the coming years. As mentioned by Ramphar earlier, we are strengthening the Specialty Chemicals segment with the R32 projects, which is a quite attractive project. The capex for that is at INR1340 crores and funding for the same is being planned. Revenue from value-added chemicals stood at INR624 crores, reflecting a 24% year-on-year increase, mainly driven by higher caustic soda volumes, the positive impact of debottlenecking we carried out last year.
Suspension PVC revenue for the year stood at INR298 crores, a 6% drop year-on-year due to lower realizations and lower volumes. As may be seen, the company’s operating profits improved significantly compared to the previous year, primarily driven by the growth in the Specialty segment, which will continue to be our focus area in the coming years.
With this, we conclude the presentation and open the floor for further discussions.
Questions and Answers:
Operator
Thank, gentlemen. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sandesh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Hi, good morning, sir. Thanks for the opportunity. I got few questions. Starting with, if you kind of give us what is the capacity addition we are looking at considering that we will be coming at the fag end of October ’26 closer to the regime getting kicking off, how do we plan to sell it once the regulation comes in? And number three, there is a slew of announcement on the R32 already.
We already have seen a 40,000 metric ton announcement more in pipeline and then we are adding. So India is almost more than doubling its R32 capacity. How do you see economics of this gas for us?
Ramkumar Shankar
Yeah. Good morning, Sanjesh, and thanks for these questions. First, on the quota itself, we believe that from our own studies that we’ve done, we will have a very healthy production quota that will be there for the country. And these quotas are — traditionally in the past as well, the quotas have always been country-based, not company based.
So there would be this quota that will be allotted and we are very confident that a quota is available. There will be a healthy increase in-demand as well within the country. And at end-of-the day, this is a global product, this will be a global play and we will be there not just in the Indian market, but also in the global market.
So we are confident about the sale of the products that we produce. And finally, on the capacities, we would like to address that question once we get the environmental clearance for our capacity.
Sanjesh Jain
But INR340 crores look much on the higher side because if you look at the peers who have already done the capex or in the process of doing the capex, the capex and the capacity looks as in Gujarat Sura has announced a capex of what under INR200 crores for a INR20,000 plus kind of a capacity. Our capex of INR340 crore is because it’s a completely scratch-down model for us and do — and then what is the strategy for procurement of HFE?
Ramkumar Shankar
So have done extensive studies again. We have — it will be a mix of both domestic and imports and we are pretty confident of the sourcing of HF. As you would expect, we have done our studies on the availability and we have already got into discussions on the supply.
Sanjesh Jain
And any take on the capex being on the higher side versus peers?
Ramkumar Shankar
One is of course that we have — this is going to be a greenfield plant for us. And obviously capex will also depend on the capacities that come up. Given — as I mentioned earlier, we would like to discuss the capacity a little later time when we get our environmental clearance and it is really related to these Two factors. Obviously, we also would have certain contingencies built.
Sanjesh Jain
Got it. Got it. Next question on the PVC side. The business has been now struggling for almost 2.5 years and still the outlook doesn’t really look encouraging. How should we see PVC business because that’s the cash-flow we were betting on to grow the specialty side of the business and that hasn’t been supportive now.
Ramkumar Shankar
All right. All right. A good question. The PVC actually as you said, has been going through a little bit of rough weather over the last few quarters and that is largely because of the large-scale dumping that has been there. However, we are confident that this entire process of getting anti-dumping duties on the countrys and expos who are dumping is reaching a final stage.
You may be aware that this did go through some legal challenges, that legal challenge is right now at the final stage and we are confident that finality will be reached pretty shortly. And maybe in a quarter or two, we should see the impact of this coming in.
As far as demand goes, it is still pretty strong. Like I mentioned in my opening comments, we have grown — the apparent consumption has grown to around 4.3 million tons from just about 4 million tonnes last year. Even assuming that some part of that could be in inventory in the chain, it’s still around 4.2 million tonnes or 4.25 million tonnes.
So it is still pretty sizable.
Sanjesh Jain
I agree wrong, but we are betting on anti-dumping to do a business case here which itself weakens the case for the business in my friends that scenario and then there is domestic large-scale addition which are getting being done in this scenario, how should we see it the long-term perspect and what is our capital allocation for the PVC going-forward?
Ramkumar Shankar
Long-term, if the — obviously, the PVC outlook is very positive. Otherwise, even the larger capacities that you were talking about would not have been greenlit by the respective companies. And these are very sizable investments. What is going on right now is a very short-term phenomenon of dumping, especially by China given what has happened to their economy. But as we have discussed multiple times in these calls and otherwise as well, this is not expected to continue.
One is, of course, we will take the short-term measures of maybe addressing the dumping through appropriate measures such as anti-dumping duties. But once that dumping is stemmed, you would see that with the growth in-demand, there is enough space and more for the additional large capacity that are coming in. These capacities are all going to come in a couple of years time and by that time, the gap in India, which is already almost at 2.8 million tons would grow even more and the capacities that are coming in are far lower than that.
So we do believe that the business case for PVC remains as strong as ever. Yes, the short-term is facing a few challenges, but we are taking steps to remedy that. And is it entirely post only — positive only on anti-dumping? The answer is no. Anti-dumping is the response to a particular action. But beyond that, if you look at the longer-term business fundamentals of PVC remains as strong as ever. I think this is just a short-term phenomenon.
Sanjesh Jain
Got it. Got it. My last on the CSM business, this year 80% growth. We started a plant now all the Phase-1, Phase-2 of LPP3 is up and running, how should we see next year and now that agrochemical cycle also looks like it is recovering. Where should we see this revenue growing in FY ’26 and ’27? And we are talking of MPP MPP4 any more detail because we are already building a civil structure. This will be as big as MPP three.
N Muralidharan
So the civil structure would be as big as MPP three because if you recall we triggered that because the civil construction social and based on how the pipeline moves, we will make a decision on filling it up with and pans.
The Phase-2 got commissioned in December and so we are ramping-up on production in that asset as well. And the Phase-3 of that same production block, we anticipate commissioning during the later part of part of this year. So the pipeline continues to be strong and we are quite optimistic about ramping-up on the production and the capacity as we go along?
Sanjesh Jain
Krishni, can you speak about the six contracts, long-term contracts we signed? Where are we in those six contracts? How many have seen the production? Where are we in the ramp-up scale? And then what is it contributing to us in terms of revenue and how should we see for ’26 and ’27?
Ramkumar Shankar
So out-of-the six letter of intense we supplied, four of them we have started manufacturing and supplying commercial quantities. And the fifth one, we are commercializing sometime this year in the middle of — middle of this year.
So the ramp-up on each of them is pretty much happening as we had anticipated. And we continue to have made progress with other customers, although we are not announcing letter of intents, but the pipeline is very healthy and we will commercialize new products this year as well as we did last year.
And some of them will not, you may not be you may not hear about letter of intents but our intent to commercialize continues.
Sanjesh Jain
Are we telling that there are more letter of intent we have signed than what we have announced already or you are talking that in the future, we will not announce it.
Ramkumar Shankar
So what I’m trying to say is some of what we are commercializing now as we speak are not going to LOI type route or the future very clear.
Sanjesh Jain
So can we expect a similar kind of a growth what we did this year in FY ’26 as well considering that all the blocks are up and running, agrochemical cycle looks better.,
Ramkumar Shankar
Broadly like we had indicated earlier, we are on course, we have talked about towards INR2,000 crores. And when Phase-3 was announced, we said it will exceed INR1,000 crores in FY ’27. We are broadly on course for that. I think that’s demonstrated by our sort of growth this year as well. So we are broadly on course for that like in the earlier cases, I wouldn’t like to exactly guide for a number for FY ’26, but we are on course to achieve our sort of numbers the way that we have planned it.
Sanjesh Jain
That’s clear. But are we seeing the confidence that we can surpass though we don’t want to change the guidance, but is there a feeling that we can surpass that because we are investing heavily into the custom manufacturing.
Ramkumar Shankar
Sanjesh, the endeavor is to do that. Endeavor is definitely to do that. Like I said,, we had sort of indicated INR1,000, then we upted to INR1,100 crores INR2,200 crores. And so the endeavor is definitely to sort of surpass that as well. But like we hold that guidance for the present.,
Sanjesh Jain
Can you just talk a little bit about the profitability in this business? Where are we? Are we on course, there is more room for optimization. We are still not at the test of it. Where are we in the margin profile?
Ramkumar Shankar
Yeah. We are sort of on-track because these are new products, definitely there is some learning curve and there is possibility for optimization in the coming years? Definitely.
Sanjesh Jain
But we are EBITDA-positive, right, in that business or it is still a drag.
Ramkumar Shankar
No, no, we are PBT positive, not only EBITDA.
Sanjesh Jain
We are PBT positive. Got it. Thank you. Thanks. Thanks, Ram and for answering all those questions and best of the coming quarters.
Ramkumar Shankar
Thank you.
Operator
Thank you. The next question comes from the line of Ankur Periwal from Axis Capital. Please go ahead.
Ankur Periwal
Yeah, hi, sir. Thanks for the opportunity. First bit, just some clarification on R32. You did highlight our position from a production standpoint. But just wondering from a sales point-of-view, what are your thoughts given that your comment on selling this gas both in the domestic and in international markets?
Ramkumar Shankar
Good morning, Ankur. So one is, of course that the domestic demand for ACs is growing at around 15% a year and that is something that is pretty much blown off by many studies and many reports that come out. And obviously, the go-to refrigerant for domestic air-conditioners is R32 HFC 32 and therefore, the demand for HFC 32 within the country is also growing accordingly. As far as the our own plans are concerned, we expect to be a significant player both in the domestic market and in the export market, the global market as well. And while on the domestic side, we have a lot of experience, we’ve been in the refrigerant gas business since 1980s and we know the space, we know the value chain and the distribution channels, all of that. On the international front as well, we have — have been having some discussions. So I think we are pretty confident of marketing the output.
Ankur Periwal
Sure, Ram. If you can also highlight the demand you know and supply dynamics for the domestic market, what is the demand currently and what number are we expecting this to go to, let’s say, three years out.
Ramkumar Shankar
The demand right now is around, I think the 23 to 25 kt that is there today. And you know, by the turn of this decade itself, that is likely to touch next of we believe around 50,000 tonnes and that could go even further few years or two, three years down the line from there, we think that could go much more.
And this also depends upon, like I said, the unconstrained demand, what we would call the unconstrained demand, the growth in AC fueling this demand. So this could even be much higher than that.
Ankur Periwal
Sure. Ram, the reason I asked that was given that probably after a decade, we are looking at the domestic market at 50,000 ton capacity and probably two years out, we will be in the at 70,000, 80,000 tonne plus our capacity, so 100,000 ton capacity there. So will it be fair to say that large part of the incremental capacity will be — for us will be going for the export market, either through a tie-up or through a distribution network.
Ramkumar Shankar
But 50,000 tons is not after the decade. I said that the turn of the decade, that is a few years from now, not that will be at least initially, there will be some that is needed. Yes, it would be a good part of us.
Ankur Periwal
Okay. Fair enough. Just on the CSM side, we had indicated — we had launched — increased the product launches if I compare FY ’21, ’22 versus, let’s say, last year. How has been the trend now and is there is an uptick that we are seeing further basis the R&D and the manpower addition that we did there?
Krishna Kumar Rangachari
There. Hi, Ankur, this is Krishna. So last year we commercialized three new products and our plan for this year is to have a similar number around three to four and the pipeline continues to be strong. Since we have commissioned our new facilities, both production, R&D and pilot facilities, we have had multiple audits and visits by our customers and because of which the engagement continues to ramp-up.
So we see a healthy, healthy growth in how the pipeline is moving?
Ankur Periwal
Sure, Krishna. Just you know, from a product mix perspective, we have been reasonably heavy on the side. The incremental products are also in or there are more or let’s say, other performance chemicals which are also contributing?
Ramkumar Shankar
So mostly in, we have a couple of couple of products in the pipeline that are, but continue to be heavily oriented to attraction, right?
Ankur Periwal
Sure. And we also talked a lot about diversifying our client as well as geography concentration. So where are we on that?
Ramkumar Shankar
Yeah. So the diversification within the for example, we are engaging very actively with all the key, the innovators in this space. All of them have interacted, visited the site, audited the site and so we have, we have a very healthy engagement as well as activities with respect to the products that we are developing. Look at.
Ankur Periwal
Yeah. Sure,. That’s helpful. Just on the profitability side and maybe more if I can help here. Given that we are doing a reasonable EBITDA margin in this business. But from a full-year perspective, Specialty as a segment is still a negative EBIT for us, losses there. What will drive this turnaround in the other, let’s say, the pace PVC part of the business are there any signs of capacity shutdown or deferment in capacity addition?
And follow-up to that, the BA standard that India was supposed to get — they were supposed to get implemented. What’s the capex on that?
Ramkumar Shankar
Okay. Ankur, this is Ram here. Let me take that one. On Paste PVC, the BAS, etc. As far as capacity is gone, we are practically the — we are the largest producer of Paste PVC in the country. We just recently commissioned as well last year the plant taking up a capacity from around 66,000 tonnes to 107,000 tonnes and this is on a market of around 173,175,000 tonnes.
So I think that makes us a pretty large player and we have plans to further expand on pace PVC as well. As far as the turnaround here is concerned, like I said, the only thing that we need to do is stem this unfair trade practice that is the happening of dumping. Already a final — unless in suspension here, there is a final finding that has already come about on six countries and that is already in-place from the end of March. And these final duties on these countries actually were even more than what the provisional findings had announced.
But the full impact of that would come in once the dumping from the European Union is also addressed. The European Union really accounts for around 45% of the total imports coming into India. That has been a recent development. So that is now being addressed. The investigation on that dumping is also now initiated and we expect that there would be some finality in the coming months on that as well. So that is on the dumping part. The second is on the CCO. That is now common to both suspension and PVC.
This was something that had been extended till the 24th of June 2025 and we are — we are now from publicly available data. What we can see is that there has been significant progress on the licensing of capacities outside of India and there is significantly better coverage. Our coverage of around 3.5 to-4 times of what India needs.
So we believe that with this kind of a progress that has been made, there would not be any need for any further extension post June 24. And if that indeed comes true, then we would see that low-quality PVC that is today coming into India will stop from June 24 onwards. So that is our expectation. We will have to wait-and-see.
Ankur Periwal
Thanks. Thanks, I’m sorry. Just a clarification. So if I got you right, you mentioned that low-quality imports have already stopped. But if I look at the import data, the numbers still doesn’t look like there is a sharp reduction there. So does it imply that even the are increasing now?
Ramkumar Shankar
Sir. I said the low-quality imports will stop once the BAS order is implemented — get implemented.
Ankur Periwal
Okay.
Ramkumar Shankar
Post the implementation, which we are hopeful will happen by June 24 when this current extension ends. So we are hopeful that there would be no need for any further extension.
Ankur Periwal
Sure. And this is your understanding what proportion of these low-cost imports will be out-of-the total that we are importing.
Ramkumar Shankar
This is — this is largely on suspension. That would be significant almost most of what is coming in from China. That is 1.3 million tonnes today.
Ankur Periwal
Okay. That’s helpful. Thank you and all the best.
Ramkumar Shankar
Thank you.
Operator
Thank you. The next question comes from the line of Dhruv Muchal from HDFC AMC. Please go ahead.
Dhruv Muchhal
Yeah, sir, thank you so much. A few questions. Sir, firstly, you mentioned on the PVC. Now the final duty against these six countries is announced by the MOF. The Europe investigation is on. And once that is complete, they announced the — probably the Director of Trade will announce in three months hence, the NOF will announce the duty. Correct? Is that understanding correct?
Ramkumar Shankar
That is right.
Dhruv Muchhal
Got it. And NBIS is in probably June. And sir, I’m sorry, I’m not followed on the SPVC duty issue. So the — there is a case in the Supreme Court against the imposition of SPVC duties. Until that case is heard and probably a final announcement is made, the duty issuance is pending. Is that the issue?
Ramkumar Shankar
Actually because the case was originally on the Gujara type of and there the decision was announced that subject to the exclusion of certain grades, the anti-dumping duty can go-ahead. They just wanted some grades to be excluded. Against this, the domestic industry has gone upheat to the Supreme Court and right now it has been there.
Dhruv Muchhal
Okay. Okay, got it. So once that is done, so can there be a case that if the Supreme Court case extends for two, three, I don’t know, two, three, four months additional the investigation period that was considered earlier will have to be reconsidered all those issues. Can that be an issue?
Ramkumar Shankar
I do not think. I do not think. So I would rather not discuss this because it is subject at the highest quote of the last. But we do not believe that. I think that should be a — I do not think we get that ill.
Dhruv Muchhal
So perfect. And sir, on the R32 capacity, you mentioned to commission it by October ’26. So — but you also mentioned the EC spending. So is the time period considering the EC or EC and the construction or it’s from the EC date you expect whatever 12 months?
Ramkumar Shankar
We factored all of that. In fact, EC is already — we have applied for it and we are hopeful that we’ll get this shortly.
Dhruv Muchhal
Sure. And as I understand from your comments, you’re not putting HF for this, you’re not backward integrating into HF as of now, but R32 probably also requires some portion of chloromethane that you already have. So HFU will be getting it from outside chloro you will have from your own captive source.
Ramkumar Shankar
Methane dich chloride is required and that is also — will be partly from internal sources and partly purchased. But there is enough and more methylene by chloride available
Dhruv Muchhal
Okay, got it. And sure that’s helpful. And sir, last question is what’s the capex for FY ’26 now? The FX guidance for FY ’26? FY ’26,
N Muralidharan
Whatever we have announced for the Phase-3 that expansion that we announced. Apart from only other capex that we’re announcing now will be. So the cash capex would be how much sir for this year yeah. In — for this project, roughly maybe around 40% of this capex will be spent in.
Dhruv Muchhal
Sure. I’m just wondering, can there be a — a — because debt is high, of course, the SPVC market can change, but the debt is high. So you can fund this capex through internal accruals, the R32 capex through internal, it’s not a large debt and it will be a mix of debt and internal accruals.
N Muralidharan
As you would know, we closed the year with almost INR700 crores of cash. So we do have cash-in the system, comfortable cash-in the system. So it will be funded with a mix of debt and cash.
Dhruv Muchhal
Sure. Perfect, sir. Great. Thank you so much, sir and all the best. Thanks.
Ramkumar Shankar
Thank you.
Operator
The next question comes from the line of Rohit Nagaraj from B&K Securities. Please go ahead.
Rohit Nagraj
Yeah. Thanks for the opportunity and good to hear the R32 capacity, which is coming up. So again, on the R32 part itself, will it be a complete replacement of our R22 capacity or will it be a combination of both that will keep certain R22 and shield pays out some part of R22 and that will be replaced with R32. Thank you.
Ramkumar Shankar
Good morning, and what we’ve announced right now is a greenfield project for R32 and our existing R22 plant is around 1.7 kt, it’s not a very large plant, that could become a swing plant.
Rohit Nagraj
Yeah. The second question is again from the HS sourcing point-of-view, given that the other fluorine players have expanded their capacities recently on HF, we will be certainly able to source from the domestic merchant market for a certain period of time till they don’t know have — till they have excess capacity and it is not used for their captive consumption. But from a medium to long-term perspective, are we thinking of backward integrating into HF given that once the domestic capacities are fulfilled for the captive consumption, we’ll have to completely rely on imports. Thank you.
Ramkumar Shankar
No, that’s a valid observation. Right now, like I said, immediately, we do not see the need for that. We have that and as you rightly said, there is availability both within India as well as in the neighborhood. In the medium term, yes, that is something that we could consider.
Rohit Nagraj
Sure. And last question on the PVC front, given that in the last two and two, 2.5 years, the margins have come under pressure because of external process. Have we done any cost optimization studies? And is there any scope for a cost optimization study and possibility, which can add maybe a few dollars to our margins?
Ramkumar Shankar
There has been definitely a lot of that done. In fact, if you look at our suspension PVC, we expanded our capacity by 10% at very minimal capital cost, which led to significant operating leverage to us, especially in terms of utilities, et-cetera. But this is something that is a very external factor on dumping with you know especially from a country which is not possibly driven entirely by market forces.
They have certain other compulsions driving their pricing and production. And that is the reason why we are working — that is the reason why we have been working on those trade measures. At the same time, on a larger basis, on a company-wide basis, we have of course announced our foray — we are working on a green power initiative where we are looking at a hybrid of solar and wind, which will come in from next year and that will have significant cost-savings. This is of course, not just for the PVC business, this is more from the electrochemical part of it, which is the largest power consumer, which feeds into a PVC to a large extent.
So I think that would be something that would definitely bring in significant cost-savings for us from next year onwards.
Rohit Nagraj
And one just last bit on CDMO. So given that our P&L currently is predominantly agro, in terms of the incremental inquiries, are we seeing any traction from non-agro segment or are we making any efforts from our side to get more into non-agro given that I think in agro, most of the domestic companies are already ingrained and given the size of the market, the incremental or future opportunities will be limited.
So any thoughts on this?
Ramkumar Shankar
The size of the market and the opportunity is significant. So we don’t see any concerns at all about that. And the global agrochemical innovators are actually very keen on working with other reliable partners beyond their existing set of supplier base, which is very limited as it is.
So we don’t see any concerns with respect to the opportunity available within the active CMO space. Having said that, we continue to be focused on diversifying our in our presence in other markets. So there are significant activities in other specialty chemicals. In fact, one of the projects we commercial last year out-of-the three that I indicated was not in the active space.
So we will continue to work on that. So that remains a priority for us.
Rohit Nagraj
Thank you so much for answering all the questions and all the best, sir.
Ramkumar Shankar
Thank you. Thank you so much, sir.
Operator
The next question comes from the line of Madhav Marna from Fidelity Investments. Please go-ahead.
Madhav Marda
Hi, good morning. Thank you so much for your time. Just wanted to understand on the R32 capacity, at least our understanding was that the quota is a determined basis on individual companies production in calendar year ’24 to ’26 for the HFCs and then some bit on the 2009 to 11 or 2010 to 11 HCFC productions. Is that the right understanding like — or is this more determined at how much the entire country produces between FY ’24 to ’26 and then later the government via some program will distribute it to different players? Or is it more like how much chem plast producing it might be?.
Ramkumar Shankar
This is based on the country’s production. See, this will Be calculated of the carbon dioxide equivalent of the country’s production of HSC is between ’24 and ’26 and the 65% of the HCFP production in 2009 level. So that is really what will determine the country’s production quarter. After that, the MOES will work on the individual quarters.
Madhav Marda
Okay. Okay, good. And given that this R72 obviously would have been a pretty exciting opportunity even like two, three years back and some players have entered this market a few years back as well. Any reason are entering now given we have been active player in R22 for a very long-time. So any reason why now? I’m just curious about the timing of the expansion being announced?
Ramkumar Shankar
Could it have been earlier? I really cannot answer that. It could have been, of course, but I think the timing is still right.
Madhav Marda
Okay. Great. And just the chemical segment
Ramkumar Shankar
That is how we turned our attention to this.
Madhav Marda
Okay, got it. Understood. And sir, sir, the other question was on the suspension gate PVC. So like what kind of margins do we think we could make because if you look at the — do an estimate for the margins over the last five, six years, we’ve gone through like very strong sort of cycle just after COVID and then now it’s sort of in the reverse direction. How should we think about more steady margins for this segment? Or is that very difficult to predict given you know, it’s a globally traded product, so it’s tough to?
Ramkumar Shankar
Is this — right now there in the last two years, it has been a bit difficult to talk about a predict because of the kind of dumping and therefore the consequent volatility that is there. But if all that dumping is addressed, I think the margins could definitely improve. Even now, if you look at it, the differential between PVC and VCM you know normally hovers around $200 or so.
It can be anywhere between $180 to $220 depending on where we are. But it is — it is pretty healthy because VCM generally follows a PVC. There could be temporary supply-demand imbalances, which could move it a little enough away or closer. But other than that, they very closely tracks it. Therefore, the margin should be consistent provided there are no such external factors like dumping that is happening.
And that is really what we are working on eliminating.
Madhav Marda
And any sense in terms of the — I mean, it’s sort of predicated on the AGD coming in, which hopefully should come any time soon. But anywhere the market itself, like what should we sort of tracking in terms of the indicators for PVC prices improving maybe out of China or the other large producers in the world, like any sense that you can give us we have a better understanding of the industry?
Ramkumar Shankar
Right now the markets may not seems to have reached a kind of a bottom in terms of prices. The prices are right now there, but for it to go back up definitely one of two things should happen. One is either China itself recovers in terms of its own economy and demand or the other is that we address this issue of Chinese dumping into India and put a stop to it. Now this is very important for the country because large investments are being made in the country and large capacities are coming up.
And this is a very important product for us to be dependent on foreign imports, which could be very unpredictable. So therefore, that is why we are saying that this entire focus on stemming this rash of dumping is so important to the country itself
Madhav Marda
Thank you.
Operator
The next question comes from the line of Abhijit Akela from Kotak Securities. Please go-ahead.
Abhijit Akela
Good morning and thank you so much for taking my questions. The first one was actually just on the R32 quota allocation itself following-on the previous one. So while at the country-level, there is this determination based on the actual output between ’24 and ’26, won’t the allocation to individual producers also be on the same basis in the sense that based on the output that they had during those three years? And if so, how do we sort of intend to, you know, lobby for our share given the size that we’ve probably not been marketing that product in India or producing it in India during this determination period.
Ramkumar Shankar
So those are things that we will get into a little later. But as far as I can see and the country has in the past as well taken a stand that quota that is allotted is for the country and we will see. And given that the country needs to — needs the production, needs the — because of the demand that is coming in, I believe that there would be enough space for it
Abhijit Akela
Okay. And we will require both a production quota and a consumption quota to be able to-market into the country.
Ramkumar Shankar
So that’s right. As a country, that’s about a production and a consumption quota and on a global scale, they will match. But obviously, those who have been exporting in the past as well will continue to export because their production quota will be higher than their consumption quota. And those who have been importers in the past will continue to import because their consumption quota will be far higher than their production quota, like for instance, the US.
Abhijit Akela
Right. So just sort of — I’m not sure if it’s — if you would like to answer this right now or maybe at some other point, but there are large producers who’ve sort of already stake their claims for those quotas. So in that context, just wondering how our right to bargain for a higher quota would stand-in this position.
Ramkumar Shankar
Abhir, I will — I’ll pass-on that question for the time-being, but I will — I can only say that we are very confident that we will have our own space. We will not talking.
Abhijit Akela
Fair enough. I appreciate that. Thank you so much. And just one other thing from my side. On the custom manufacturing business, you know, typically what you’ve observed is the leading producers there, the margins in that business tend to be pretty healthy in the range of maybe 25% 30% EBITDA margins at any reasonable level of scale. We’ve already hit INR500 crores plus of revenues is what I understand and yet if I’m not mistaken, we are at PBT breakeven. So just wondering what exactly are the bottlenecks there and how could the margins improve meaningfully and by when based on what drivers?
Ramkumar Shankar
So — actually I said PBT positive. I did not say PBT breakeven. So we may — we did make profits on that business one and we are making a reasonable EBITDA margin already. And I only said that there is scope for further improvement given that we are launching number of new products, there is some learning curve.
So we are making a reasonable EBITDA margin from that business and the business is already making profits.
Abhijit Akela
Okay, okay. Understood. Thank you so much, Maliya. Thanks everyone. All the best.
Ramkumar Shankar
Thank you
Operator
The next question comes from the line of Madhur Rathi from Counter Investments. Please go-ahead.
Madhur Rathi
Sir, thank you for the opportunity. Sir, I wanted to understand when I look at our competitor in the PVC segment, their margins are much stable than what we do. So is it because they do — they manufacture PVC from the EDC routes, that is why their margins are more stable than us or is there something else that I’m missing?
Ramkumar Shankar
Has yes, they had they have two lines, one-line based on EBC route and the other line-based on the VCM route like us but obviously with the more backward integrated you are, you have that much more control over the the margins. But most of their PVC is consumed captively.
So I wouldn’t really be able to comment on, you know, their internal practices.
Madhur Rathi
So got you. So if I look at your suspension PVC, like you mentioned, 1820 would be a fair estimate for the spread. So what would be the similar spread for post PVC? And the second question would be, sir, what would be our conversion cost that should flow to our EBITDA from these?
Ramkumar Shankar
The — on the suspension PVC, the margin that Ramphar mentioned around 1800 levels is at the international margin levels, of course, there are duty and other benefits that you get being — being a domestic player. As far as the conversion cost in suspension PVC is somewhere around $60 $65,
Madhur Rathi
What would be a similar number for Page PVC?
N Muralidharan
The Page PVC is a far more integrated play. Because you have and chlorine caustic, so you get caustic at the byproduct and so it depends on various parameters. What is the caustic price at the point in time. So it will be difficult to give you one number for that
Madhur Rathi
Sir, can we expose if we double of what we make in over a pa 10-year period, it should be too much what we make in suspension PVC?
Ramkumar Shankar
Yeah,
Madhur Rathi
Yeah got it. Yes, sir, just a final question from my end. Sir, our — so competitor Tata Chemicals and similar custom manufactured chemical segment. So they have received delays because of agrochemical producers shifting what the offtake timeline. So are we seeing some kind of issues on that front or are we intact in that? And the second question would be, sir, I think this INR1,000 crores we have mentioned that 23% to 21% EBITDA margin would be a fair estimate. So have we currently reached those levels or we can expect that in the next 12 to 18 months? So thank you so much. These are my questions.
Ramkumar Shankar
Now — as far as the is concerned, as you would have seen, we have shown a significant growth compared to last year and we are retaining our guidance. So we don’t see any sort of a reduction on the lines that we are indicating. As our EBITDA margins, while I wouldn’t like to get into the exact numbers. But like I said, we have made a decent margin. Of course, there is some scope for improvement and we are also making profits on this business.
Madhur Rathi
Got it. So thank you so much and all the best.
Operator
Thank you. The next question comes from the line of Bharat Sedh from Quest Investment Advisors. Please go-ahead.
Bharat Sheth
Hi, good morning, sir. And sir, just one bookkeeping question. You said that from June 20, why this low-grade systems and PVC will discontinue with the implementation of BIS norm. Can you give some color? I mean how much is currently up to total dumping is a low grade SPVC is happening.
Ramkumar Shankar
Okay.
SPVC roughly around 60% of what is coming in from China that is 1.3 million tonnes is coming in from China. Roughly around 60% of that would be.
You know having that RVCM of greater than 2ppm is what we would think. That is what Rafael estimates show. So that is what you have.
And anyways you know depends on every producer plants exporting facility has to be certified after a physical visit by the BIS authorities. So unless that visit is there and they are certified, nobody will be able to export. Now there is over.
Like I said over 11 and a half million tons has already been certified worldwide. But. But I don’t think that includes any plant in China.
Bharat Sheth
Okay, thank you. And all the best sir.
Ramkumar Shankar
Thank you.
Operator
Thank you. The next question comes from the line of Krishnan Parvani from JM Financial.
Please go ahead.
Krishan Parwani
Yes. Hi sir, two questions from my side.
Firstly, how much was our HCFC import volumes during CY9 and 10 HCFC
Ramkumar Shankar
We don’t import. That is you are talking about hydrochlorofluorocarbon which is R22. We produce that.
Krishan Parwani
I understand. I mean I’m asking whether you imported any other CFC during CY19 basically like 141A B or any. Any other you imported during that time.
That was the question.
Ramkumar Shankar
In 9, 10 what we we produced HCFCs, you know, R22 and the number readily of how much we produce in that year. I’ll try and get you later.
Krishan Parwani
Okay, but so you’re saying that you produced only. You didn’t trade the other HCFCs in India? We didn’t trade any refrigerant gas.
Ramkumar Shankar
We only produced and sold even during that period.
Krishan Parwani
So it’s understood. And lastly just a clarification. I joined the call a bit late.
So can you please highlight the R32 capacity that you intend to put.
Ramkumar Shankar
We had mentioned that you know we would talk about the capacity once we get the environment.
Krishan Parwani
Okay, you didn’t mention.
No worries. No worries. Yeah.
Thank you so much for answering my question. Wish you all the best.
Ramkumar Shankar
Thank you so much.
Thank you.
Operator
Thank you. The next question comes from the line of Rohit Nagaraj from BNK Securities.
Please go ahead.
Rohit Nagraj
Yeah, thanks for the follow up. Just one question on China carbide capacities.
Anything that we are hearing in the recent times,
Ramkumar Shankar
The carbide capacity is, you know, as you know 80% of the Chinese capacity is carbide based. And that is largely, you know, almost everything is using still using mercury catalyst and obviously has a carbon footprint which is three times that of a normal ethylene based route. This we believe will start getting phased out by 2031.
Like I mentioned in earlier calls as well, by the end of 2031. China has announced that they’re going to stop the mining of primary mercury. So that would actually ensure that they do not have enough mercury for this purpose.
So that is anyways a hard stop on that front. But they have not yet announced any clear phaseout program on carbide capacity. But we do expect that the industry expects that there will be some phase out at least of those who are buying carbide and making PVC pretty soon.
Rohit Nagraj
Thanks a lot sir. Thank you.
Operator
Thank you, ladies and gentlemen.
That was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Ramkumar Shankar
Thank you everyone for joining us today on this earnings call.
We really do appreciate your interest in kempla San Martin Ltd. If you have any further queries please do contact SGA, our investor relations advisor. I’m wishing you all a very good day.
Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Chemplast Sunmar limited, that concludes this conference.
You may now disconnect your lines.