Chemplast Sanmar skyrockets ~14% post robust performance in Q3FY22

31 Jan 2022 , 09:40 AM

Chemplast Sanmar Limited stock traded in the fast lane on Monday after it announced its un-audited financial results for the quarter and nine months ended on December 31, 2021.

At around 9:39 AM, Chemplast Sanmar was trading at Rs573.55 per share up by Rs69.4 or 13.77% on Sensex.

Key highlights for the quarter

• Revenues registered a strong growth on account of higher realizations per tonne for the key products – Specialty Paste PVC resin, Suspension PVC, Chloromethanes and Caustic Soda.
• On the volume front, while the Caustic Soda volume for the quarter was higher, Specialty Paste PVC and Suspension PVC volumes were lower on a YoY basis, primarily due to restrictions around operation of downstream units in the NCR Region due to poor air quality and the extended monsoons during Q3’FY22, respectively. The demand for both Specialty Paste PVC and Suspension PVC has picked up strongly and the built-up inventory is expected to get diluted in near term.
• Started dispatches of the two newly commercialized products of Custom Manufactured Chemicals business. The product pipeline is strong with a number of projects at various stages of commercialization.
• Received the environmental clearance for our proposed Specialty Paste PVC expansion. We have received clearance for 70ktpa, but as of now, we are going ahead with 35 ktpa expansion as Phase 1, said Company.
• Debottlenecking of Suspension PVC capacity by 10% is expected to come fully online by Q1’FY23. This is a phased debottlenecking, part of which is already completed.
• The Company continues to be debt free on a standalone basis and on a consolidated basis the net debt is negligible.

Commenting on the results, Ramkumar Shankar, Managing Director said, “The demand outlook, for both Paste PVC and Suspension PVC, is quite strong due to significant deficit and high import dependence in the domestic market. Increasing tight supply at the global level for both these products, augurs well for domestic manufacturers like us.

With our dominant position in the Indian market and expansion plans to cater to the growing demand, we believe that we are well-placed to benefit from uptick in PVC market. Custom manufacturing business is expected to benefit significantly due to China plus one strategy of global innovators.

Q3 has been a very strong quarter financially with revenues registering a 33% growth year on year, and net profit growing 48% year on year.”