Chemplast Sanmar Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Chemplast Sanmar reported a challenging Q3 FY26 with a consolidated net loss of INR119 crores and a 21% YoY revenue decline to INR835 crores, primarily due to headwinds in Suspension PVC and Value-added Chemicals. Despite these challenges, the company sees green shoots with improving PVC market sentiment, ongoing capacity expansions in R32 and Custom Manufactured Chemicals, and the positive impact of China's export tax rebate withdrawal. Management expects production normalization and continued progress on strategic projects.

Highlights

  • Specialty Chemicals segment reported INR336 crores revenue, with volume increasing 13% YoY.

  • Paste PVC facility operating at full capacity utilization, with strong domestic demand and price improvements.

  • Chinese government's withdrawal of 13% export tax rebate on Suspension PVC from April 2026 is expected to improve market sentiment and reduce Chinese price advantage.

  • R32 capacity expansion of 14 KTPA is underway, with the first 2 KTPA swing plant expected to be operational by the end of Q4 FY26.

  • Market sentiment for PVC is turning positive, with an uptrend visible in January and February, and Suspension PVC expected to reach breakeven by February/March.

Concerns

  • Consolidated net loss of INR119 crores for the quarter.

  • Consolidated revenues declined 21% YoY to INR835 crores.

  • Suspension PVC business faced a challenging environment with seasonal demand decline, weather disruptions, and lower import prices due to non-implementation of antidumping duty.

  • Value-added Chemicals revenue declined from INR153 crores last year to INR105 crores this quarter.

  • Agrochemicals slowdown impacted Custom Manufactured Chemicals performance, delaying the INR1,000 crores revenue target to FY27-28.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹835 Cr
    YoY -21%
  • Consolidated Net Loss
    ₹119 Cr

9M

  • FY26 Revenue
    ₹2,968 Cr
  • FY26 EBITDA
    ₹4 Cr
  • FY26 Net Loss
    ₹234 Cr

What they filed

Q1 FY27: revenue up 2.3%, net profit down 175.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue993 1,058 1,151 1,100 1,033 +4%835 −21%1,256 +9%1,125 +2%
EBITDA26 32 37 17 43 +65%-57 −278%194 +424%-115 −776%
Net profit-31 -49 -54 -64 -51 −65%-119 −143%-45 +17%-176 −175%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹835 Cr Total
  • Suspension PVC ₹394 Cr 47.2%
  • Specialty Chemicals ₹336 Cr 40.2%
  • Value-added Chemicals ₹105 Cr 12.6%

Capital allocation

high confidence
  • Capex Capex disclosed
    • MPB-3 Phase 3 completion and pilot commissioning
    • MPB-4 civil works completion
    • R32 capacity expansion (14 KTPA total, including 2 new plants and R22 conversion)
    On the capacity expansion, work on MPB-3 Phase 3 and MPB-4 continued during the quarter. MPB-3 Phase 3 is expected to be completed in Q4 of the current year with pilot commissioning also targeted for Q4 of this year, following which, production is expected to ramp up gradually. Civil works for MPB-4 are targeted for completion in Q1 of FY '27. On our refrigerant gas project, the R32 capacity expansion of 14 KTPA is underway, including 2 new R32 plants of 10 KTPA and 2 KTPA capacity, respectively, and conversion of the existing R22 capacity into a swing plant at Mettur.

Guidance & targets

Revenue

  • CMCD Revenue Target Revenue · FY27-28 · Medium confidence INR1,000 crores

    Previously INR1,000 crores by FY27 → INR1,000 crores

    Still comfortable while there is a delay by a few quarters, in terms of our ramp-up to the INR1,000 crores, we don't see any significant issues and realizing that by FY '27-'28

    — Krishna Rangachari

  • R32 Annual Revenue Revenue · full year production · High confidence INR600 crores

    Previously INR550 crores → INR600 crores

    The first full year, we should have around INR550 crores – roughly around INR600 crores. I did say INR550 crores earlier. My team just corrected me. It should be around INR600 crores.

    — Ramkumar Shankar

Capacity

  • R32 Capacity (Swing Plant) Capacity · end of Q4 FY26 · High confidence 2 KTPA
    The first swing plant will have a capacity around 2 kt, and that should come in by the end of this quarter.

    — Ramkumar Shankar

  • R32 Capacity (New Plant 1) Capacity · Q1 FY27 · High confidence 2 KTPA
    Then there is another new plant of another 2,000 tons, and that will get ready by the first quarter of next year.

    — Ramkumar Shankar

  • R32 Capacity (New Plant 2) Capacity · end of calendar year 2026 · High confidence 10 KTPA
    And then the last 10,000 tons, we should get ready by the end of the calendar year.

    — Ramkumar Shankar

Production

  • Caustic Soda Production Normalization Production · March 2026 · High confidence Normalized
    We expect the production to normalize by March 2026 in 2 months from now.

    — Ramkumar Shankar

Profitability

  • Suspension PVC Breakeven Profitability · February/March 2026 · High confidence Breakeven
    Suspension PVC by February and March, yes. The answer is yes.

    — Ramkumar Shankar

Margin

  • CMCD Initial Margin Margin · steady state · Medium confidence 20-25%
    Yes. In the nominal terms, yes. Like we had mentioned in the earlier call as well, when we are sort of pushing through a number of new products, there is a learning curve. So the margin level will be slightly lower in the initial year. But on a steady state basis, we still hold on that. That's what the industry is making. So we believe that we will also be in that range.

    — N. Muralidharan

What to watch in Q4 FY26

R32 Swing Plant Commercialization

Next quarter (Q4 FY26)
Current Underway, expected by end of Q4 FY26
Target Commercial sales started

Why it matters

First phase of a significant new capacity addition, crucial for future revenue contribution and overall project progress.

Commercial sales are expected to start post the swing plant commissioning by the end of this quarter.

Risks & concerns

  • Suspension PVC challenging market environment

    high

    Seasonal demand decline, weather disruptions, lower import prices due to non-implementation of ADD, and regulatory uncertainty impacted Q3 performance.

    Management acknowledged

  • Chinese overcapacity and dumping in PVC market

    high

    While the export tax rebate withdrawal is positive, the underlying threat of Chinese overcapacity remains a concern for the PVC market.

    Management acknowledged

  • Agrochemicals slowdown impacting CMCD

    medium

    Global agchem market conditions and slower ramp-up of new molecules led to a delay in achieving CMCD revenue targets.

    Management acknowledged

  • Technical issues impacting Value-added Chemicals production

    medium

    Lower production at Mettur facility due to technical issues affected caustic soda and hydrogen peroxide output.

    Management acknowledged

  • Continued pricing pressure on Paste PVC from EU imports

    medium

    Despite stable domestic demand, Paste PVC faced pricing pressure from imports, with an antidumping investigation ongoing.

    Management acknowledged

Q&A highlights

6 direct
CMCD INR1,000 crore revenue target delay Direct
Still comfortable while there is a delay by a few quarters, in terms of our ramp-up to the INR1,000 crores, we don't see any significant issues and realizing that by FY '27-'28

Clarifies the revised timeline for a key growth target due to agrochemicals slowdown and slower new molecule ramp-up.

Asked by Rohit Nagraj

PVC price uptrend, MIP, and ADD status Direct
MIP, obviously, we would not be able to comment here and give you a timeline on that. But all I can say is that the process started some time back and it is at least half way into the process. And this is not a very long run out process. So I think we should see some traction on that in a couple of months.

Provides insight into the ongoing efforts for Minimum Import Price (MIP) protection and confirms recent PVC price increases.

Asked by Pujan Shah

Impact of China's export tax rebate withdrawal on Suspension PVC Direct
That is right. On Suspension PVC, the removal of the export tax benefits that they had, the rebate that they had is going to be a definite positive for the Suspension PVC industry here in India because China was the significant exporter to India. It was flooding the Indian market with low price exports.

Highlights a significant positive structural change for the Indian Suspension PVC industry, reducing competitive pressure from Chinese imports.

Asked by Pranit

Fundraising plans given current losses Partial
Fundraising is an ongoing exercise both projects and also for our short-term requirements. I think those will go as per our plan that we have done all the time. As for equity raising is concerned, we don't have any plans as of now. I can't comment about the next 2 years. But we don't have any plans as of now.

Indicates the company's current stance on funding, ruling out equity raising in the near term despite losses.

Asked by Nikhil Gandhi

Breakeven levels for S-PVC and Paste PVC Direct
Suspension PVC by February and March, yes. The answer is yes.

Confirms the expected timeline for Suspension PVC to reach breakeven, signaling a potential turnaround for the segment.

Asked by Nikhil Gandhi

Caustic soda production normalization timeline Direct
We expect the production to normalize by March 2026 in 2 months from now.

Provides a clear timeline for resolving technical issues affecting caustic soda and hydrogen peroxide production.

Asked by Ramkumar Shankar (self-correction)

R32 annual revenue potential Direct
The first full year, we should have around INR550 crores – roughly around INR600 crores. I did say INR550 crores earlier. My team just corrected me. It should be around INR600 crores.

Gives a specific revenue target for the new R32 business once fully operational, indicating its contribution to future growth.

Asked by Diya Jain

Impact of China export tax rebate withdrawal on margins Partial
This will not go down completely into the margin because there would be some increase in the feedstock price as well because the stock prices are to follow the finished product prices. But there will be some improvement we believe...

Explains the nuanced impact of the Chinese rebate withdrawal, suggesting some margin improvement despite potential feedstock price increases.

Asked by Rohit Nagraj

3 min read 8 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Chemplast Sanmar reported a challenging Q3 FY26 with consolidated revenues of INR835 crores, marking a 21% YoY drop, and a net loss of INR119 crores. For the nine months of FY26, the company recorded revenues of INR2,968 crores, an EBITDA of INR4 crores, and a net loss of INR234 crores. This quarter was described as the most challenging in the last three years, impacted by multiple factors including a one-time impact of INR 2.68 crores due to new labour codes.

Suspension PVC Business Headwinds and Recovery

The Suspension PVC segment faced a difficult environment due to seasonal demand decline, weather-related production disruptions preventing feedstock ship berthing, and lower import prices exacerbated by the non-implementation of antidumping duties. Revenue for this segment was INR394 crores, down from INR525 crores last year. However, market sentiment is improving, with an uptrend in prices visible in January and February, and the company expects to reach breakeven at the PBT level by February/March 2026.

Custom Manufactured Chemicals (CMCD) Growth and Delays

The CMCD business generated INR336 crores in revenue, with volumes increasing 13% YoY. The segment continues new product development and customer diversification, with 17 products commercialized. However, a slowdown in the agrochemicals sector impacted performance, leading to a delay in achieving the INR1,000 crores revenue target, now expected by FY27-28 instead of FY27. Initial margin guidance for CMCD is 20-25% at steady state, though it may be slightly lower during the learning curve phase.

Paste PVC Market Dynamics

The Paste PVC business experienced continued pricing pressure from European Union imports but saw stable domestic demand, particularly from the footwear and automobile sectors. The Cuddalore facility is operating at full capacity. Post-quarter, there has been an uptick in demand and significant inventory drawdown in January, along with some price improvements. An antidumping investigation on EU and Japan imports is ongoing, with final findings expected by the end of Q4 FY26.

Strategic Capacity Expansions

Chemplast Sanmar is progressing with several capacity expansion projects. Work on MPB-3 Phase 3 is expected to complete in Q4 FY26, with pilot commissioning and gradual production ramp-up. Civil works for MPB-4 are targeted for completion in Q1 FY27. The R32 refrigerant gas capacity expansion to 14 KTPA is underway, with the first 2 KTPA swing plant expected to begin commercial sales by the end of Q4 FY26, contributing an estimated INR600 crores in annual revenue at full production.

Value-added Chemicals Performance and Outlook

The Value-added Chemicals segment, including caustic soda, chloromethanes, and hydrogen peroxide, reported revenues of INR105 crores, down from INR153 crores last year. This decline was primarily due to lower production at the Mettur facility caused by technical issues, which also affected hydrogen peroxide volumes. Management expects production to normalize by March 2026, with prices expected to remain stable barring material changes in market conditions.

Impact of Chinese Export Tax Rebate Withdrawal

A key positive development is the Chinese government's decision to withdraw the 13% export tax rebate on Suspension PVC, effective April 2026. This rebate, amounting to $70-80 per metric ton, previously supported Chinese exports to India. Its withdrawal is anticipated to reduce the price advantage of Chinese imports and improve market sentiment for the Indian Suspension PVC industry, potentially accelerating rationalization of carbide PVC capacity in China.

Managing Director Transition

Mr. Ramkumar Shankar announced his decision to step down as Managing Director effective April 1, 2026, after 13 years at the helm. Mr. Ganesh Kumar is slated to take over, with the company expressing confidence in continued growth under his leadership. Mr. Shankar extended his appreciation to shareholders, the analyst community, and all other stakeholders for their understanding, trust, and support over the years.

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