Chemplast Sanmar Ltd reported a net loss of ₹31 crore for the September quarter, following a profitable first quarter this fiscal, primarily due to a volatile pricing environment caused by significant dumping.

The Chennai-based company reported a consolidated net loss for the quarter ending September 30, 2024, as against a net profit of ₹26 crore in the year-ago period. In the previous quarter (June), the company had a consolidated net profit of ₹24 crore.

On a standalone basis, Chemplast Sanmar incurred a loss of ₹8 crore in Q2, compared to profit after tax (PAT) of ₹14 crore in Q2FY24.

Consolidated revenue from operations saw a slight increase, at ₹993 crore from ₹988 crore a year ago. The company reported an Ebitda of ₹26 crore, down ₹46 crore, resulting in an Ebitda margin of 3 per cent, down from 5 per cent.

PVC prices

“After a healthy performance in Q1, PVC prices resumed their volatile trajectory due to excessive dumping and witnessed a significant downturn during the September quarter. Amidst this tough environment, we were able to deliver a reasonable performance during this quarter, with a revenue of ₹993 crore. Dumping of Paste PVC from the EU and Japan has circumvented the impact of anti-dumping duty on other countries. This is being taken up with the authorities concerned, ” said Ramkumar Shankar, Managing Director of Chemplast Sanmar.

He noted that domestic demand for suspension PVC softened due to the monsoon and the influx of low-priced supplies from China, driven by its weak local demand.

Import duties

In a positive turn, provisional anti-dumping duties have been announced on imports of Suspension PVC from China, the US, Indonesia, Thailand, Taiwan, Korea, and Japan. The company is optimistic that these measures will soon take effect and help mitigate the ongoing issue of PVC dumping into India.

The Custom Manufactured Chemicals Division (CMCD), which performed steadily in Q2, has signed a new letter of intent with a global agrochemical innovator for the supply of an advanced intermediate for a new active ingredient. This marks the sixth such agreement the division has secured in the past two years.

Additionally, the value-added chemicals business, which includes caustic soda, chloromethanes, refrigerant gases, and hydrogen peroxide, experienced a 6 per cent revenue increase in Q2 FY25 on a sequential basis, supported by a recovery in chloromethanes prices, while caustic soda and hydrogen peroxide prices remained stable.

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