Chemplast Sanmar (CHEMPLASTS) Q4 22/23 earnings summary

Executive summary

• FY23 consolidated revenue from operations was ₹4,941.08 crore, down from ₹5,891.99 crore YoY; PAT fell to ₹152.35 crore from ₹648.65 crore.

• Lower PVC and chloromethanes prices, higher energy costs and an ₹80.50 crore inventory write-down weighed on earnings; EBITDA margin was 9.5%.

• CMCD grew strongly, while planned investments in speciality paste PVC and custom manufacturing underpin the medium-term growth strategy.

Financial highlights

• Consolidated total income was ₹5,020.97 crore vs ₹5,949.47 crore; PBT before exceptional items was ₹252.01 crore vs ₹795.55 crore.

• Consolidated PAT was ₹152.35 crore vs ₹648.65 crore; diluted EPS was ₹9.64 vs ₹43.66.

• Consolidated EBITDA margin was 9.5%; operating revenue declined 16% YoY, while sales volumes increased for almost all products.

• Finance costs fell to ₹154.02 crore from ₹321.61 crore, partly offsetting lower operating profit; debentures had been repaid using IPO proceeds.

• Operating cash flow was ₹355.43 crore vs ₹900.95 crore; cash and cash equivalents rose to ₹1,110.98 crore from ₹999.75 crore.

Outlook and guidance

• PVC prices and margins were expected to remain under pressure in H1 FY24; medium- to long-term Indian PVC demand outlook remained positive.

• More than ₹1,000 crore was committed to expansion projects; estimated project capex for FY24 was ₹744 crore, following ₹296 crore spent in FY23.

• The 41 ktpa paste PVC addition was targeted for H2 FY24; CMCD Phase 1 was expected in H1 FY24 and Phase 2 by FY-end.

• CMCD growth plans include fine chemicals and pharmaceuticals; suspension PVC investment remains dependent on securing stable feedstock supplies.