Chemplast Sanmar

Chemplast Sanmar reported a Q3 FY25 revenue of ₹1,058 crores, marking a 19% year-on-year growth. The company's EBITDA for the quarter stood at ₹32 crores, a significant improvement from a loss of ₹7 crores in Q2 FY24. Despite this, the company recorded a net loss of ₹49 crores for Q3, though this was an improvement from the ₹89 crores loss in Q3 FY24. For the first nine months of FY25, revenue reached ₹3,195 crores (up 11% YoY) and EBITDA was ₹182 crores (up from ₹5 crores YoY), with a net loss of ₹56 crores (vs ₹127 crores loss YoY).

The Specialty Chemicals segment demonstrated strong growth, with Q3 sales volume increasing by 51% YoY to 24.9 kilotons and revenue nearly doubling to ₹377 crores. For the nine-month period, sales volume grew 35% to 71.6 kilotons, and revenue increased 62% to ₹1,031 crores. Value-added chemicals saw a 10% YoY improvement in Q3 revenue to ₹154 crores, and an 18% YoY increase for 9M FY25 to ₹466 crores. In contrast, Suspension PVC revenue declined by 5% in Q3 to ₹527 crores and 8% for 9M FY25 to ₹1,699 crores, primarily due to inventory build-up.

The company continues to face significant challenges from dumping of Suspension PVC, particularly from China, and Paste PVC from the European Union, leading to pricing headwinds and margin pressures. Domestic demand for Suspension PVC grew 11% and Paste PVC grew 13% in 9M FY25, but the company's volumes were impacted by cheaper imports. Provisional anti-dumping duties on Paste Resin from China, Thailand, and Taiwan provided some relief, but this was offset by increased imports from Europe. A new anti-dumping investigation has been initiated against EU and Japan for Paste PVC, with management hopeful for early gazetting of duties.

The new Cuddalore Paste PVC plant is currently ramping up and is expected to achieve full utilization in the coming quarter (Q4 FY25), aiming for 100% by March or April. The existing Paste PVC facility is already running at 100% utilization. In the Custom Manufactured Chemicals (CMC) division, Multipurpose Block 3 Phase 1 is ramping up well, and Phase 2 was commissioned in December 2024, with expectations of healthy revenue growth for FY25. The company is on track for its FY27 revenue target of ₹1,100 crores for the CMC business, with an EBITDA margin target of 23-25% as operations stabilize.

Employee costs increased due to annual increments, senior hires, and strengthening of the technical team, particularly impacting the Paste PVC and CMC projects. Finance costs for 9M FY25 jumped 34% YoY to ₹174 crores due to interest on project financing. The company's net debt stood at approximately ₹1,000 crores at the end of Q3 FY25. Management indicated that the breakeven point for Paste PVC is more dependent on price realization (influenced by anti-dumping duties) than volume, rather than solely on utilization levels.