"Chemplast Sanmar Posts Profit in Q1 and Announces ₹160 Crore Capacity Expansion"

Chemplast Sanmar Ltd has announced a return to profitability for the June quarter, recording a net profit of ₹24 crore. This turnaround follows a net loss of ₹64 crore in the same period last year, attributed to a revival in PVC prices and lower feedstock costs. The Chennai-based company will invest approximately ₹160 crore in expanding its capacity to support its custom-manufactured chemicals business.

The company’s revenue from operations increased by 15% year-over-year, reaching ₹1,145 crore, up from ₹996 crore. EBITDA for Q1FY25 was reported at ₹124 crore with an 11% margin. The rise in PVC prices was driven by a container shortage for cargo from China, though elevated freight rates have begun to decline post-quarter, contributing to a decrease in PVC prices in July.

Specialty chemicals revenue surged by 61% compared to the previous year, bolstered by higher volumes from a new facility in Cuddalore and increased revenue from the Custom Manufactured Chemicals Division. Revenue from value-added chemicals grew by 20%, largely due to increased volumes of caustic soda. Suspension PVC revenue remained stable compared to the previous year but showed an 8% improvement sequentially.

Ramkumar Shankar, Managing Director, highlighted that the Board’s approval of the ₹160 crore investment for capacity expansion at Berigai reflects the company’s robust product pipeline and the efficient commercialization of new products. The expansion will enhance the company’s capabilities in the custom-manufactured chemicals sector, complementing recent investments in state-of-the-art R&D, pilot, and production facilities.

HBL