This speciality chemical company achieved its highest-ever profit in FY23 and turns debt-free on a standalone basis! Watch out!

In FY22, its revenue grew by a whopping 55 per cent YoY to Rs 5,892 crore, owing to strong volume off-take and higher realisation across all key products i.e. speciality paste PVC resin, suspension PVC, chloromethanes, and caustic soda.

Chemplast Sanmar Limited, a speciality chemicals company, which is India’s dominant producer of specialty paste PVC, announced its audited financial results for the quarter and year ended on March 31, 2022.  

In FY22, its revenue grew by a whopping 55 per cent YoY to Rs 5,892 crore, owing to strong volume off-take and higher realisation across all key products i.e. speciality paste PVC resin, suspension PVC, chloromethanes, and caustic soda. Its EBITDA margin stood at 20.3 per cent while the company achieved the highest-ever net profit of Rs 649 crore i.e. over a two-fold jump on a YoY basis.  

In Q4FY22, its revenue jumped 35 per cent on a YoY basis due to a pick-up in demand coupled with a better realisation for most of the products. The company also liquidated excess inventory of specialty paste PVC resin and suspension PVC built-up in Q3FY22.  

The suspension PVC prices rebounded in Q4FY22 with a pick-up in demand and supply tightness around the world. Caustic prices continue to remain strong on structural tightness globally.  

Due to strong demand and commercialisation of new products, custom manufactured chemicals saw a significant increase in sales in FY22. Chemplast has recently been upgraded as a ‘development supplier’ by one of the innovator companies and they now consider Chemplast as a key supplier for their requirements. With the entry into this elite group, the company has started receiving additional inquiries for new products.  

Debt reduction since the IPO continues to drive a pronounced improvement in the credit profile. The company is debt-free on a standalone basis.  

Around 10 per cent increase in suspension PVC capacity through debottlenecking is expected to come fully online by Q1FY23. This is a phased debottlenecking, a part of which is already completed.