Chemplast Sanmar Returns to Profit in Q1, Announces ₹160 Crore Capacity Expansion.

Chemplast Sanmar Ltd has reported a return to profitability in the June quarter, posting a net profit of ₹24 crore compared to a net loss of ₹64 crore in the same period last year. The turnaround is attributed to a rebound in PVC prices, which has positively impacted the company's financial performance.

The company's revenue from operations increased by 15% to ₹1,145 crore, up from ₹996 crore in the previous year. Chemplast Sanmar also recorded an EBITDA of ₹124 crore with an 11% margin in Q1FY25.

The rise in PVC prices was driven by a severe container shortage affecting cargo from China. However, these elevated freight rates have started to decline post-quarter, coupled with ongoing economic weakness in China and a surge in low-priced imports, leading to a drop in PVC prices in July.

Specialty chemicals revenue grew by 61% year-over-year, buoyed by higher volumes of specialty paste PVC from a newly commissioned facility in Cuddalore and increased revenue from the Custom Manufactured Chemicals Division. Value-added chemicals revenue also rose by 20% due to higher volumes of caustic soda. Suspension PVC revenue remained stable year-over-year but improved by 8% sequentially.

Looking ahead, Chemplast Sanmar's Board has approved a ₹160 crore investment for capacity expansion at Berigai to support growth in the custom manufactured chemicals division. This expansion, alongside recent investments in state-of-the-art R&D and production facilities, reflects the company's robust product pipeline and its commitment to accelerating the commercialization of new products, according to Managing Director Ramkumar Shankar.

HBL