Chemplast Sanmar (CHEMPLASTS) Q4 19/20 earnings summary

Executive summary

• FY20 sales and other income were Rs 1,267.16 crore; profit before tax and exceptional items fell 44% YoY to Rs 138.99 crore, while PAT declined to Rs 98.74 crore from Rs 187.21 crore.

• Higher depreciation following fixed-asset revaluation and increased interest and finance costs weighed on earnings; pandemic disruption affected operations in March 2020.

Financial highlights

• Sales and other income were Rs 1,267.16 crore versus Rs 1,269.83 crore in FY19; profit before interest, depreciation and taxes was Rs 321.83 crore versus Rs 334.33 crore.

• Finance costs rose to Rs 95.42 crore from Rs 46.99 crore, and depreciation increased to Rs 87.42 crore from Rs 54.88 crore.

• Reported PAT was Rs 98.74 crore versus Rs 187.21 crore; FY19 included a Rs 15.10 crore exceptional gain from reversal of early-separation compensation.

• Basic and diluted EPS were Rs 8.75 in FY20 versus Rs 14.31 in FY19.

Outlook and guidance

• PVC Paste Resin volume share was expected to be maintained in FY21, with demand recovery anticipated from Q2 after early-year COVID-19 disruption; auto-sector weakness remained a concern.

• MDC demand was expected to grow on domestic API production and healthcare priorities; CTC demand was expected to remain strong, while HCFC-22 demand was expected to decline.

• Caustic Soda and Hydrogen Peroxide prices were expected to remain under pressure for at least six months amid weak demand, particularly in export-facing textiles.

• Speciality Chemicals was developing custom-manufactured intermediates, with expected contribution to future financial performance.