DCW Ltd (NSE: DCW) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Saatvik — President
Pradipto Mukherjee — Chief Fianancial Officer
Analysts:
Unidentified Participant
Ayush Chaturvedi — Analyst
Pujan Shah — Analyst
Amitabh Gupta — Analyst
Aryan Oswal — Analyst
Meet Vora — Analyst
Presentation:
operator
While you are joined to the conference. The conference is now being recorded. SA. Ladies and gentlemen, good day and welcome to the DCW Limited Q1FY26 earnings conference call hosted by Ariane Capital. 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. Ayush Chaturvedi for from Arihan Capital. Thank you. And over to you sir.
Ayush Chaturvedi — Analyst
Thank you Manoj. Good evening everyone. Thank you for joining us on DCW’s Q1 FY26 earnings call. We would like to thank the management for giving us this opportunity to host. On this call we are joined with DCW’s management represented by Mr. Sapik Jain, President, Mr. Amitabh Gupta, CEO Mr. Sudarshan Ganpati, CEO and Mr. Pradeepto Mukherjee, CFO. I would like to invite Mr. Satik Jain to initiate the proceedings with his opening remarks post which we will have an interactive Q and A session. Thank you. And over to you sir.
Saatvik — President
Thank you. Good evening everyone and thank you for joining us today for our earnings call. For the first quarter of FY26 we entered the new fiscal with the global and domestic chemical industries still navigating significant headwinds, the macro environment remains challenging with multiple forces at play globally, geopolitical tensions and tariff actions continued to alter trade dynamics. The US Reimposed tariffs on a broad range of Chinese origin chemical products and also now on select Indian origin intermediates. These developments disrupted traditional trade flows, introduced pricing uncertainty and prompted global buyers to recalibrate their sourcing strategies closer to home.
The continued flow of low cost imports, particularly from China, has further intensified pricing pressures in key chemical segments like PVC and soda ash. Policy measures to safeguard our domestic industry, such as the much anticipated anti dumping duties on PVC and soda ash are yet to materialize. This has kept domestic realizations under pressure despite healthy underlying demand across several product categories. That said, India continues to be one of the most attractive long term chemical markets globally. Government led investments in infrastructure, housing, etc. Are sustaining demand growth. We are also seeing continued structural shifts in supply chains that favor India over the medium term.
These tailwinds, combined with our strategy of value addition, diversification and execution discipline position us well to navigate the short term volatility. Coming to our Q1 performance, revenue declined sequentially primarily due to a correction in PVC realizations and lower sales volumes partly on account of higher internal consumption. In addition, sales of synthetic rutile were lower compared to the previous quarter reflecting the skew in our order book from Q2 onwards. A particular highlight this quarter is the significant improvement in our profitability at the bottom line. Despite the lower top line and uncertain market conditions, our pat grew by 70% year on year aided by disciplined control over the below the line expenses.
Notably our finance cost this quarter is the lowest it has been in the last 32 quarters reflecting the combined benefit of debt reduction and improved cash flow management. Our EBITDA mix continues to shift in favor of specialty chemicals which now contribute a significant share of our earnings. This reinforces the success of our portfolio strategy and strength of our high margin high value products. On the growth front, our cpvc expansion of 20,000 tonnes was commissioned ahead of schedule and has begun contributing from July August onwards. The balanced 10,000 tonnes expansion is progressing as planned and will further strengthen our position in this segment.
We also commissioned our 44.5 megawatt solar project during this quarter. As mentioned earlier, with generation ramping up in phases. Once fully operational, this will meet about 25% of our Tamil Nadu unit’s power requirements from renewable sources. Apart from the tangible cost savings, this project supports our broader sustainable goals and reduces our carbon footprint. Our priorities remain clear for FY26 one accelerate growth within our specialty chemical portfolio where customer retention, application diversity and pricing power remain strong 2 drive our cost improvement in our basic chemical portfolio to enhance competitiveness and stabilize our margins and three the most important one is maintain our balance sheet discipline.
We remain committed to our growth with deleverage strategy and are on track to reach our balance sheet targets by the end of this fiscal. We are targeting to end FY26 with a net debt to EBITDA of less than 0.5x on the back of significant debt reduction through the year. By the end of this fiscal we will have created a resilient base, one that consistently delivers quality margins capable of withstanding near term market volatility. In my closing remarks last quarter I had spoken about building a foundation for the next phase of growth. Our leaner balance sheet, enhanced specialty product mix and ongoing efficiency gains will ensure that when we move forward we do so from a position of strength.
We have always believed that the best time to prepare for growth is during challenging times and FY26 will be a year where we complete that preparation and position ourselves to for the next chapter of our growth journey. With that I will Hand it over to our CFO Pradipto to talk on our financial performance. Thank you.
Pradipto Mukherjee — Chief Fianancial Officer
Thank you Sadik and good afternoon to Everybody in the quarter one FY26 earnings call the quarter revenue stood at 475 crores which was down by 4.8% YoY from 4499 crores. This as earlier said by Satvik as well is predominantly lower because of lower sales volumes of PVC which has been used for our internal consumption. For the PVC production the sales volume across all other product segment remained higher but that got offset by lower realizations predominantly from PVC and also from CPVC. On sequential basis the revenue was lower by 11.5% which was down from 538 crores to 475 crores.
Here as well the PVC volumes were down due to similar reason of product being diverted for internal consumption of cpvc. Further, the sales volumes for SR was also down. For the current quarter the lower volumes of these products had impacted the revenue by approximately 65 crores. While the SR sales will pick up from quarter two based on firm delivery scheduled from awarded export contracts, PPC sales volume will continue to remain low due to increased consumption for CPVC production. EBITDA including other income for quarter one stood at 58 crores which was up by 12% year on year from 52 crores predominantly on account of increased profitability of basic chemicals.
During the comparative period the basic chemicals EBITDA increased to 11 crores from just 1 crore due to the increase in caustic soda prices and lower energy costs on account of solar power substitution. This was partly offset by EBITDA drop in PVC Due to reduction in PVC VCM spread on the specialty chemicals the EBITDA remained more or less stable with a negative bias due to fall in CPVC realizations On sequential basis the EBITDA dropped by 6.5% from 62 crores to 58 crores and this fall is due to reduction in the PVC and CPVC prices. As we know earlier spoken, the EBITDA margin excluding other income stood at 11.3% versus 9% in quarter one of last fiscal and 10.4% in the previous quarter.
Coming to finance cost, the finance cost stood at 15 crores which was down by 10.6% from 16.9 crores in last year. Quarter one on a sequential basis as well it was down by approximately 5%. This was the lowest as mentioned in a span lowest in a span of last 32 quarters and it is Expected to go down on scheduled repayments of our term loan depreciation more or less remain flat at 25 crores across all the. Across all the comparative quarters and is expected to increase as we capitalize for the CPVC capex in future pack for the company stood at 11.4 crores up from 6.7 crores.
It’s a jump of 70% yoy driven by the EBITDA increase of 12% as mentioned earlier and a decrease in below the line cost reductions driven by financial and other disciplines on sequential basis. The path has been on similar lines with this we can now open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to withdraw yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all participants if you wish to ask any questions you may press star and one. We have our first question from the line of Poojan Shah from Molecule Ventures.
Please go ahead.
Pujan Shah
Hello. Yes please. My first question pertains to the terrace as we have been hearing.
operator
Sorry to interrupt you sir. Your voice is quite muffled. Can you please use your handset?
Pujan Shah
Is it clear now?
operator
No sir.
Pujan Shah
Is it clear now?
operator
Yes. Much better.
Pujan Shah
Yeah. So my first question pertains to the tariff as we recently hearing of about the tariff in the chemical space. So just wanted to understand what percentage of total revenue we export to US Specific and what will be the impact of tariff in our product. If you can spell product wise. It’s okay.
Amitabh Gupta
Thank you. It’s Amitar Gupta here. Frankly our US exports are only of SIOP and there is absolutely no change in our. There’s no effect on this tariff introductions by us. And we continue to get the orders from our existing buyers on the same basis what we were getting earlier. And there is no change in the prices also.
Pujan Shah
Okay. Okay. Got it. My second question pertains to the pvc. So in PVC we have recently seen that there was a one plant being shut down in the European region. So just wanted to understand a broader dynamics first. What is the installed capacity in the Europe which can be. Which is possibly that the plant will get shut down or the possibility because of the higher energy cost and the. And the due to the sluggish scenario right now. And just wanted to understand is that the China surplus capacity will start supplying over there or will the India will be so positioned to export the PVC to the European region and that will help us to increasing realization.
So can you just give a broad thought about it?
Saatvik
See, I will go from the bottom. I don’t think even if Europe will reduce their operating rates or reduce their capacities, we will. India will be a keen exporter to Europe because Europe there are lot of entry barriers. You have a, you have to be a reach compliant and all those things. I think they have, they have only reduced capacities which are in surplus. So I don’t think Europe is going to totally go out of PVC production number one. Number two, Chinese product are not entertained in Europe because they don’t satisfy the stringent quality measures that has to that one has to qualify for selling into Europe.
So I don’t think China will be a beneficiary. Even if Europe reduces their operating rates. What could happen is that there could be some market realignment. There could be some Asian producers who can sell into Europe and the markets where they were selling earlier, China can maybe sell theirs. So it may not be anything significant. But even if Europe reduces their operating rate or shuts their capacities it will be an opportunity for say producers like Korean producers who have, who have been selling in the past to Europe to up their sales in Europe and the markets where Asian markets where Koreans were selling, the Chinese can sell.
So there will be only a market realignment. I don’t think it will have any significant, I would say tailwinds for the PVC players to increase their realization or market will get readjusted.
Pujan Shah
That’s all just on a follow up this part. So what will be the current installed capacity in the Euro?
Saatvik
I don’t have offhand. I can check back and then get back to you.
Pujan Shah
Sure, sure, sure.
Saatvik
Just to answer your question additionally is that the Europe drop in production will and may lead to exports from Korea into Europe which eventually means that the Chinese products may find a place in the Asian market. Which eventually means that the pressure of the Chinese volumes into India may reduce Indian players, existing PVC players predominantly will continue to focus on the demand in the country because we anyway run, you know, the product runs an import substitution in India.
Pujan Shah
Got it sir. And my last question will pertain to the China involution policy. The measures which right now they have been taking too. So what, what do you, what are your thoughts on that part and how we have been. It is a long term alignment. I understand but do you feel that will be a very positive outcome? For the other countries as well.
Saatvik
You’re talking about the Chinese rationalization of their old capacities.
Pujan Shah
Yeah, yeah, yeah. The, the, the new.
Saatvik
I’ll tell you, I’ll tell you what has happened is that, that China has come out with a policy whereby their old polluting carbide capacity plants, which are less than some threshold capacity, needs to shut down. So if that happens, there will be a 8% drop in their overall capacities. But we also understand that there are also some new capacities being planned in China. So what is going to be the actual impact? We will come to know only post this entire things pan south. At this juncture, it is difficult for anyone to predict what China is going to do and what is going to be the impact.
For example, tomorrow, if you know, if we have this Ukraine war getting resolved, there is going to be a boost in demand to rebuild that country and there will see a lot of flow of products from various countries to that place. Similarly, if there is any improvement in the Chinese internal demand, even that will also will help the overall domestic demand. You see, per say, no country would like to export their product unless they are compelled to. Because the best realization you get is only when you sell locally.
Pujan Shah
Got it, sir, that is from my side. I will join back in the queue. Thank you so much.
operator
Thank you. A reminder to all participants, if, if you wish to ask any questions, you may press star and 1. Anyone who wish to ask a question, you may press star and one. Now, participants who like to ask a question, you may press star in one. Now we have our next question from the line of Dwiti, an individual investor. Please go ahead.
Unidentified Participant
Yeah, hi sir. Am I audible?
Saatvik
Yes, please go ahead.
Unidentified Participant
Yeah, I had few questions. First one is on the siop. So our SIP utilization has seen a dip in the quarter. So any specific reason for that?
Saatvik
I think SIOP production is basically dependent on the kind of product mix we prepare. When you, when we are comparing capacities, it’s on an arithmetic basis on the tonnage versus the nameplate capacity. We have been producing certain kind of lighter shades which require more cycle time and hence the volumes what you see would have dipped in terms of production.
Unidentified Participant
Okay. Okay, sir. And what will be our power cost benefit for the quarter after commissioning our solar project?
Saatvik
See, the power energization of the park which is supplying us solar has started somewhere in April beginning. But we are drawing power on a phased manner. I think roughly what benefits we would have got by now would be around 4 and a half, 5 crore rupees for this quarter.
Unidentified Participant
Okay. And our ECU realizations for the quarter and how much was the chlorine negative? If you could share that.
Saatvik
Our ECU is 33,000 rupees return.
Unidentified Participant
Okay.
Saatvik
And. And chlorine. Frankly, since we are the captive consumers of chlorine and hcl. Sorry, chlorine as scl. So the negative on chlorine and SCL is not much in our case.
Unidentified Participant
Okay, okay. That’s all from Insights. I’ll come back and with you. Thank you.
Saatvik
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press Star and one. Anyone willing to ask a question, you may press Star and one. Now a reminder to all participants if you wish to ask any questions you may press Star and one. Now a reminder to all participants, if you wish to ask any questions you may press star and 1. We have our next question from the line of Ayush Chaturvede from Arihan Capital. Please go ahead.
Ayush Chaturvedi
I. Thanks for the opportunity. So firstly I would like to understand that you know, the price volatility and the variation and spreads that we are witnessing currently, what. What is basically the outlaw price realization for, you know, our key products. That’s one. And if there has been any significant change in demand patterns for domestic vis a vis export markets, if anything of a very significant nature of realignment is foreseen given the tariff situation that we find. As I said, thanks.
Saatvik
So we’ll take your last part first. You see, price volatility is bound to be there as told by Satvik also in his opening remarks that till we see some stability across the geopolitical situation and within the country, we will have a price volatility and also demand volatility. What we can see is that the demand is likely to remain robust because we are one of the very few green spots in the world where we are seeing a growth. Having said that, if you see our products caustic soda demand is consistent. Only thing is the realization will depend to a great extent on the chlorine HCl negative.
So the months where we have that prices going down we will have a lower ecu. Soda ash demand is more or less constant. Only in the monsoon months we have a lower demand because the soda ash what we make also is predominantly going to detergent and all other products where the demand usually is at its weak in the quarter. 2 PVC CPVC demand tend to go in tandem. PVC CPVC there is no depth of demand. Only thing is that there is an oversupply of PVC which has resulted in some sort of. I Would say cautioned buying by the customers.
So that has tend to have an impact on the price because there is an oversupply in PVC and PVC sentiments also carry into cpvc. So we are seeing a correction in the prices of CPVC as well. Iron oxide. Fortunately for us more than 50% of our demand is met by imports where we don’t see any significant I would say concern. The only concern is that even going by our past trends the quarter on quarter demand is there could be some variation. So here as a whole we will do better but we will see some quarterly blips here or there.
I hope I have answered your question.
Ayush Chaturvedi
That was very elaborate, thanks. If I may squeeze in one more. You know so with the ongoing investment to expand our CPVC capacity. So I mean how if you could elaborate on how this scale up will you know will be reflected in the mix in the next two to three years because we the product mix and also the margin profile. So yeah that’ll be very helpful, thanks.
Saatvik
I would say it’s very premature on my part to really comment what is going to happen after one year. All I can say is that by end of the year or end of the financial we are hopeful of completing our capex on CPVC where we will be at 50,000 tonnes capacity. Having said that in the next few years we are also expecting certain additional capacities being announced and which are going to come out. So I personally feel that availability more domestically will propel demand and there could be some temporary phase where we may have oversupply situation but overall we feel in the long run the demand will grow.
Ayush Chaturvedi
That was very helpful, thanks.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press star and one we have our next question from the line of Aditya from Swolio investment managers. Please go ahead.
Unidentified Participant
Thank you so much. See my question. I did hear a comments on PBC Generally there was this notion that when the housing sector I mean they are doing quite strong in terms of pre bookings and you know pre sales and collections so now there will be this demand for say PVCC, PVC but that has not really kind of played out. Right. So any, I mean can you like shed any light on why?
Saatvik
Yeah, yeah. What I say is based on what I have heard from other processors, investor calls. You see the dealer stock plays a big role in the overall consumption. So I mean what we sell is to the producers and when they sell their product it is sold through their dealer network. So the stocking at the dealer level plays A significant role in this entire supply chain management and from what I understand is that because of the uncertainty on these various add still not coming, we have been waiting for more than six months, one year and there has been a continuous dumping of PVC from China.
So the stocking levels have come to significantly lower levels of the PVC products at the dealer levels which has an impact on the overall. So even though the real estate infrastructure demand, what you say is correct, is looking robust but we are not seeing that on the ground as yet.
Unidentified Participant
So is it like, I mean they are anticipating prices to go down even.
Saatvik
More than they are anticipating some positive sentiments to come because we have had couple of false runs that it is going to come.
Unidentified Participant
So I think from the point of view of say the stockers, the dealers and all, are they prices to go below?
Saatvik
Sir, just to answer your question, if at the end the PVC prices go up, the dealers holding stock with them would immediately reprice that into the front end market which eventually helps them to earn a profit on the quantum entry they are holding.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press star and 1. We have our next question from the line of Aryan Oswal from Pinterest Capital. Please go ahead.
Aryan Oswal
Hello, am I audible sir?
Saatvik
Yes please.
Aryan Oswal
So my question was sir there’s a slow start if you see on the revenue front, so what would be the guidance for FY26 and as we are expecting the capacity to be live by March or Q4 FY26 so what would be the guidance for FY27 and are we on the track to achieve the 400 crores EBITDA by FY27?
Saatvik
So first of all is that so far as our top line is concerned we had all throughout refrain from giving any guidance. Secondly there has been a lot of moving parts so far as our top line is concerned. As we grow into producing more CPVC, our PVC which is at 1 lakh tonnes of capacity will be more and more internally consumed which eventually means that we will not have PVCs to sell but it will add to my bottom line. So what would happen is my top line may not grow. What will happen is that the PVC’s top line will get reduced and CPVC’s top line will add up with some value add.
So typically the additions of 20 to 40 or 40 to 50 would not throw up so far as the top line is concerned on the bottom line, at least for the current year we are holding or giving any, you know, guidance because of the fact that the prices are relatively very volatile because of the kind of geopolitical events happening around us. And we gradually would unfold as and when we get a clearer picture. But having said that, the first quarter would be what we feel is that the, you know, relatively on the slower side because we have the benefits of additional capacity of CPVC which will come in, which will add to our bottom line.
We will have this full scale benefits of power cost which will come on a QOQ basis. And we also would have the incremental sales coming from a scheduled synthetic rutile order.
Aryan Oswal
Okay, answer is the 400 crores EBITDA guidance intact?
Saatvik
I think we would be better positioned to, you know, give the, you know, a figure by the end of this year. But relatively on a longer term, we don’t see that picture changing too much.
Aryan Oswal
Okay, thank you so much. That’s all from us.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. We have our next question from the line off part. Wasani, an individual investor. Please go ahead. Are you there? Hello there.
Unidentified Speaker
Hello. Yes. Yeah, thank you for the opportunity. I wanted to understand that in the CPVC phase that we have, how much would be the raising component and the compound component. See that keeps changing. So we cannot give a value. Some months we sell I would say 30, 40%. Some months we sell 20%. We can’t give a guidance nor a breakup of that. Okay, okay, okay. And on the costed soda side, how do you see the market? I mean the current ECU relations are. I mean it’s compared to Q1, it’s in the same line or it is higher or lower. If you can add on that there.
Saatvik
Has been a mild, I would say softness on the relay sessions. But having said that, I think market is more or less stable now. So we don’t see any significant correction over the current ECU realizations.
Unidentified Participant
Okay. Okay. Yeah, that will be great. Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. Anyone who wishes to ask a question, you may press star and one. Now we have our next question from the lineup. Methunsoni 3 from GC Holdings. Please go ahead.
Unidentified Participant
Yeah, hello sir. So just question, as the capacity for CPVC cores are, what sort of cost efficiencies we will be able to get once we hit 50,000 capacity? Like in terms of.
Saatvik
I think it’s too early for us to comment. I think we can answer this question better in the next earnings Call because by that time we would have had at least three months of operating this new capacity at full Fixed cost will definitely go down obviously apart from fixed cost what other efficiency that we will see we can only comment post the continuous run of the plant for three.
Unidentified Participant
Months and so basically recently just as you indicated that say let’s say the PVC capacity is 1 lakh tonnes and once we hit 50,000 so basically the external sales for PVC will come down to what only 50?
Saatvik
No, no, no it will be, it will be in the range of 70. So basically the first 10,000 tons we shall see PVC what we were doing it’s, it’s basically on mass PVC that obviously we are not looking of any substitution but if you see the coefficients it’s 0.8 of PV going into CPVC so eventually it will be to the tune of you know a tonnage of around 27 to 30000 tons at full scale at the end.
Unidentified Participant
Oh okay, got it. And one more question is about the capex you also indicated well this year you have already done next year onwards also like we will be in a very healthy balance sheet so what sort of CapEx which we will plan yearly basis because you have a healthy cash flow with net debt to equity debt to EBITDA also coming under control. So you have like a broad plan as to will keep doing some of the other capex of what would be 200 crores.
Saatvik
Yeah so I think if you’ve seen, if you followed us for the last two years we have been doing, doing around you know 150 odd crores of capex every year we have been announcing those were small bite sized capexes as we were also focused on reducing our debts as we had told by the end of the year our balance sheet strength would further be, will further be strengthened because of the scheduled repayments of the legacy loan is quite, I mean will reduce our debt burden this year the capex is so far as borrowings for the capex was concerned has already been taken.
So there is a significant debt reduction which eventually gives from a financial standpoint quite a decent amount of investments which we can you know think of investing. But having said that there are quite some proposals which we are offering working with but going slow on any kind of, you know, any kind of, you know preponement of these because of the geopolitical uncertainties with opportune time just to.
Unidentified Participant
Understand like will it be continuation of increasing the existing capacities or it can be the new areas it could be.
Saatvik
It could be anything. It would depend on first of all our capabilities and second of all is that whether we are willing to invest on the capability given the market dynamics at that point in time. See, we need to understand that while you know, from a countryside we have a tariff with us which also has a Ukraine angle for the additional tariff, the government may or may not be going along with us or with us, Russia or with excluding us with, you know, the BRICS country all has repercussions because either we are an exporter or we are working on import substitution like any other businesses in the country.
So it depends on the government positioning and we would obviously take our position based on how the positioning happens in the future so far as geopolitics is concerned.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press Star and one. Anyone who wishes to ask a question may press Star and one on your touch. Don’t telephone. A reminder to all participants if you wish to ask any questions you may press Star and one. Anyone who wishes to ask a question may press Star and one to ask a question. We have a next question from the line of Meet Vora from MK Global. Please go ahead.
Meet Vora
Hi sir, thanks for the opportunity. I just wanted to check our outlook on CPVC demand because I believe this is off season and how do you think the demand would pick up over next 1 to 2/4? Also your thoughts on spreads? While we say that PVC prices are going down, CPVC might also go down. But how do you think the spreads will behave in this environment?
Saatvik
Yeah, I feel demand post monsoon will definitely pick up because that has been the trend even in the past. So we don’t see any, I would say headwinds in terms of the demand. Demand is definitely going to be I would say growing and good. So the PVC CPVC spreads, you have asked a very, I would say difficult question to answer but what I can say is that being an integrated PVC producer making cpvc I would say in terms of the PVC CPVC spread we will be better positioned because we lot of cost we can save inward freight, clearing, forwarding, packing, all those costs we can save that can add to our would say bottom line, just to add further to what sir would have also told is that the first thing when we allude, you know, on discussions and when we have executed of using our own PVCs into CPVCs that were driven by two broad guidelines, one is on the ancillary cost of packing and so on so forth.
Secondly on the PVC business While we have a timing difference on inventory carry from VCM to PVC we did not want to have that in a PVC to cpvc. So basically either ways the price goes up, we are in a advantageous position of using our PVC to CPVC because there is no time lag Right. On the prices of PVC versus the cpvc. Third the spread would remain much better and unlikely to fall big time because we have a add in place. So that’s an absolute amount of profit which PVC incremental sailing price, which PC PVC will always come up.
Pradipto Mukherjee
Okay, so this add on PVC is already there in place or it’s still under investigation.
Saatvik
So add on CPDC is there on China and Korea add on pvc. We have the disclosure statement maybe in a month’s time. We expect the final findings post that between two to three months we will have the notification by the Finance Ministry. So maybe September, October is the earliest we can expect this ADT to take place in pvc. So all I can say is that whatever is the impact on the PVC price to that extent definitely the CPU PVG pipeline will move up because that is the raw material.
Meet Vora
Okay, understood. So any change or anti dumping duty in PVC you are saying that that would the CPVC customer would be able to, you will be able to pass that on to that customer?
Saatvik
Yeah, to that extent. What I am trying to say that that to that extent it will be beneficial for us because that can be passed on on our CPVC price.
Pradipto Mukherjee
Sure. And just second question was more to understand the overall thought process on the CPVC market. So just wanted to understand what would be the India market today. And considering that there are two players right now, one is Epigrel, second is DCW and we have also expanded and maybe within next, not in the immediate future but within next two to three years we are expecting Reliance also to come into this space. So is that market enough to absorb volumes of all these players put together? And we are expecting maybe significantly high growth in this market.
How should one look at this?
Saatvik
We can see we can break this into two parts. As of now the CPUC demand is I would say in the upwards of 250,000 tonnes. And apart from the capacities domestically, there is also a consistent imports coming from Japan, Thailand and other countries. So what will happen is that you have missed out one another big player who is going to come with Lubrisol. So we are going to have new capacities coming from Lubrisol and also from Reliance. So if you, if you are able to ensure that no imports come then this capacity will take care of the demand meant this capacities will be taken care of by the demand.
Having said that there are a lot of applications like fire sprinklers and industrial use of CPVC pipes which have not taken off purely because of non availability of raw material domestically. So there could be some timing gap because you are going to have significant domestic capacity coming up coupled with imports coming there could be some, I would say short space of time where there could be an oversupply situation. Having said that, we feel that in the long run the demand will get adjusted and we will see more growth in the demand to take care of the capacity.
Unidentified Participant
So sir, just so we are today the demand would be say 2 and a half lakh ton. Within next say 2 to 3 years this could go to around 3 lakh ton. Today we are having a capacity of around 1 lakh ton in the country, right? So epigrel is 75,000. We are around 40,000.
Saatvik
Yes.
Unidentified Speaker
And any idea on how much lubrizole or reliance is expanding?
Saatvik
Lubrisol capacity is 1 lakh tonnes. But not in one phase. It is going to come in multiple phase. About reliance also we hear that we are going to come only in a phased manner. So it is not that we are going to see the entire capacity hitting at the same time. There is going to be a timing lag. So we feel that the demand will definitely get adjusted. But having said that, the same thing happened even when PVC capacities came into the country. So eventually today where we are today is that today we are a deficit country in PVC in spite of all these things because the demand has got opened up and new areas got opened up.
So we feel that the same thing will happen even for cpvc. There could be a timing issues here or there.
Unidentified Participant
So just one last question on any thoughts on market feedback of this Reliance CPVC capacity. How much they are talking about? Sir, I have no clue. From what I hear it is around maybe 60, 70,000 tons is what I am what I have heard first. Understood sir. Thank you so much. That’s all from my side. Best of luck for the coming.
Saatvik
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. Anyone who wishes to ask a question may press star and 1. Anyone that wishes to ask a question may press Star and 1. Participants who wish to ask a question may press Star & 1. Now as there are no further questions I now hand the conference over to the management for closing comments.
Saatvik
Thank you, everyone, for joining our call today. Hope we’ve been able to answer all your questions. If there’s anything further, we request you to reach out to our advisors at Valorum. Thank you once again.
operator
Thank you, sir. On behalf of Ariane, Kapit, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.