Chemplast Sanmar Limited Q3 FY26 Earnings Call Summary

Summary

Chemplast Sanmar Limited - Q3 FY 2026 Earnings Call Summary Monday, February 9, 2026, 4:00 PM IST

Event Participants

Executives 3 Krishna Kumar Rangachari (Head, CMCD), M.R. Ramkumar Shankar (MD), N. Muralidharan (CFO)

Analysts 6 Bharat Sheth (Quest Investment Managers), Diya Jain (Sapphire Capital), Jash (Dalal and Broacha), Kiran Gadge (Knightstone Capital), Nikhil Gandhi (Bajaj Life Insurance), Pujan Shah (Molecule Ventures), Rohit Nagraj (360 One Capital)

Financials & KPIs

Geographic & Segment Commentary

• Specialty Chemicals (CMCD & Paste PVC): Segment contributed 40% of total revenue. Paste PVC demand grew 8% YoY in 9M FY26, driven by footwear and automotive sectors, with 100% utilization at the new line. Custom Manufactured Chemicals (CMCD) saw a slowdown in agrochemicals due to low-cost Chinese generics impacting innovator ramp-ups.
• Suspension PVC: Contributed 47% of revenue. India consumption was 3.2 million tons for 9M FY26 (slightly negative YoY) due to extended monsoons and regulatory flux. High reliance on imports, specifically from China (52% share), which management expects to ease following Chinese export tax rebate withdrawals.
• Value-added Chemicals: Contributed 13% of revenue. Caustic Soda prices remained range-bound (₹30-34/kg) with supply concentration in Western India providing a regional protection advantage for Chemplast in the South. Production was temporarily hampered by technical issues at the Mettur facility, expected to normalize by March 2026.

Company-Specific & Strategic Commentary

• R32 Refrigerant Project: 14 KTPA expansion underway via three units (2 KTPA swing plant, 2 KTPA new plant, 10 KTPA flagship). Full ramp-up expected by end of calendar year with targeted annual revenue of ₹600 crores at current prices ($7.5/kg).
• Regulatory Developments: Anti-dumping duty (ADD) for Suspension PVC was rejected by the Ministry of Finance, and Quality Control Orders (QCO) were rescinded. However, an ongoing ADD investigation for Paste PVC (EU/Japan) is expected to reach final findings by end of Q4 FY26.
• CMCD Expansion: MPB-3 Phase 3 and MPB-4 are on track. MPB-3 Phase 3 pilot commissioning is scheduled for Q4 FY26, while MPB-4 civil works are targeted for completion in Q1 FY27.
• Management Transition: Mr. Ramkumar Shankar will step down as Managing Director on April 1, 2026, after 13 years; Mr. Ganesh Kumar is slated to take over the role.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Pricing and Margins

• Question: What is the price hike required for EBITDA breakeven? (Jash, Dalal and Broacha)
• Answer: The company is currently at PBT breakeven for Suspension PVC in Feb/March 2026. Future gains depend on the lag between rising product prices and feedstock (VCM) costs (Ramkumar Shankar).

Chinese Export Tax Rebate

• Question: Will there be a dumping effect before the April 1st rebate withdrawal? (Pujan Shah)
• Answer: Possible, but prices in Jan/Feb have already moved up. Logistics issues in China are also slowing shipments, making a massive pre-deadline flood manageable (Ramkumar Shankar).

CMCD and Refrigerant Gas

• Question: Is the R32 revenue included in the ₹1,000 crore CMCD target? (Nikhil Gandhi)
• Answer: No, R32 is a separate line. The ₹1,000 crore target for CMCD is now shifted to FY28 due to the agrochem slowdown (N. Muralidharan).

Caustic Soda Market

• Question: How do you see the surplus capacity in Caustic Soda impacting prices? (Pujan Shah)
• Answer: India is now a net exporter. Prices should remain range-bound at ₹30-34/kg. Chemplast’s Southern location saves on high transportation costs associated with Western Indian producers (Ramkumar Shankar).

Key Takeaway

Chemplast Sanmar reported a difficult Q3 FY26 with a net loss of ₹119 crores, driven by a “perfect storm” of adverse pricing, regulatory setbacks in anti-dumping duties, and weather-related disruptions. Despite these headwinds, management believes the PVC cycle bottomed in Q3. Strategic optimism is supported by China’s withdrawal of its 13% export tax rebate on PVC (effective April 2026) and a recent ₹7-8/kg price recovery in the domestic market. The company is diversifying its revenue mix through the R32 refrigerant gas project (targeting ₹600 crores annual revenue) and expanding its Custom Manufacturing (CMCD) pipeline to 17 commercialized products. While the ₹1,000 crore CMCD revenue target has been pushed to FY28 due to global agrochemical price pressures, the company expects to reach PBT breakeven in the S-PVC segment by the end of Q4 FY26. Management remains focused on stabilizing margins as new capacities in specialty chemicals and refrigerant gases ramp up through FY27.