Chemplast Sanmar Ltd.(NSE:CHEMPLASTS): Q3FY23 Results Out; Total Income fell 18% YoY

Chemplast Sanmar Ltd. (NSE:CHEMPLASTS) is a specialty chemical manufacturer based in India. The company produces a wide range of products, such as PVC resins, caustic soda, and other chemicals. It also offers services such as logistics and the distribution of chemicals.

The company’s Q3 FY23 results indicate total income of Rs 1205.10 crore, and a net profit of Rs 27.14 crore, compared to Rs 1464.73 crore and Rs 236.86 crore, respectively, in the same period last year. The company’s total income was Rs. 1205.10 crore for the period ended December 31, 2022, compared to Rs. 1211.06 crore for the period ended September 30, 2022. This represents a slight decrease in revenue. However, when compared to the same period in the previous year, the company’s revenue has decreased significantly. The company reported total income of Rs. 14,64.73 crore for the period ended December 31, 2021, which is Rs. 259.63 crore higher than the current period’s revenue.

The company’s net profit for the period ended December 31, 2022, was Rs.27.14 crores, which is lower than the net profit of Rs.38.54 crores reported for the period ended September 30, 2022. When compared to the same period in the previous year, the company’s net profit has decreased significantly. The company reported a net profit of Rs.236.86 crores for the period ended December 31, 2021, which is Rs.209.72 crores higher than the current period’s net profit. The company’s EPS for the period ended December 31, 2022, was Rs.1.72, which is lower than the EPS of Rs.2.44 reported for the period ended September 30, 2022. When compared to the same period in the previous year, the company’s EPS has decreased significantly. The company reported an EPS of Rs.14.98 for the period ended December 31, 2021, which is Rs.13.26 higher than the current period’s EPS.

Chemplast Sanmar Ltd.’s Q3 FY23 results indicated an uptrend in volumes across the portfolio in comparison to the corresponding period last year. The custom manufacturing business saw strong growth. The company’s power and fuel cost increased due to an increase in coal, natural gas and superior kerosene prices. The company remains net cash positive, with a healthy cash balance of Rs 1,167 crore. In Q3 FY23, both the paste PVC and custom manufacturing expansion projects were on track. The company plans to start the next phase of expansion of the multi-purpose facility, and the total capex outlay (including the next phase) will be approximately Rs 680 crore, to be spent over the next 15 months.

Falling prices of finished goods, coupled with the increase in energy costs, resulted in a reduction of EBITDA margin to approximately 10% for the 9MFY23 period. The company expects a better performance in FY24, driven by a combination of a rebound in PVC demand and prices, along with new capacities (Paste PVC and Custom Manufacturing) coming on-stream during the year.

The Managing Director of Chemplast Sanmar, Mr. Ramkumar Shankar, commented on the results, stating that “In an evolving macro environment, as expected, the quarter gone by has turned out to be another subdued one for us as well as the industry. Our business continued to face headwinds for most of Q3 FY23, with a revival in PVC prices only from December onwards.”