Chemplast Sanmar Ltd

- No immediate or additional capital raising is planned as the major Capex is mostly complete. - The company believes it can manage its current debt and cash flow situation without new fundraising. - Upcoming Capex includes the refrigerant gas R32 project, which is not expected to require significant expenditure. - Management expects operating cash flows from the CMCD business to become self-sustaining around FY '27-'28, funding future Capex internally. - Debt levels are believed to have peaked, with gearing expected to reduce in coming quarters due to improved profitability and green power initiatives. - There is confidence in managing existing leverage without external capital infusion at present.

- Ongoing Capex includes refrigerant gas R32 capacity expansion: - Swing plant conversion of existing R22 plant (~2 kt) to be ready by January 2026. - Another 2 kt plant expected by April 2026. - Plans for a new 10 kt plant under engineering and awaiting regulatory clarity; decision expected by December 2025. - Estimated Capex for the 10 kt plant around INR 250 crores. - CMCD (Custom Manufacturing) business expansion: - Targeting to be self-sustaining in operating cash flow by FY '27-'28 with revenues crossing INR 1,000-1,200 crores. - Majority of expansion expected on the existing site at Berigai, with a backup alternate site identified. - Major Paste PVC and Suspension PVC plants commissioned recently; capacity ramp-up ongoing. - Green power initiatives underway to improve profitability and support future growth. - Debt levels have peaked; deleveraging expected as benefits of new capacities and green power materialize.

- Specialty Chemicals segment is driving growth, with a 10% YoY increase in H1 FY '26, aided by volumes from the new Paste PVC plant at Cuddalore. - Custom manufacturing (CMCD) pipeline remains strong with ongoing commercialization of new molecules and active customer engagement. - Long-term outlook for CMCD is positive despite near-term price pressure and slower ramp-up of new agrochemical molecules. - Value-added Chemicals segment revenue declined 9-12% due to lower caustic production and market softness. - Suspension PVC volumes improved 11% YoY despite volatile pricing and competition from Chinese and US suppliers. - Planned capacity expansions in refrigerant gas R32 (starting Q1 2026), and CMCD expect to support future revenue growth. - Expect CSM segment to achieve INR1,000 crores in revenue by FY 2027-28, maintaining EBITDA margins between 20-25%. - Indian PVC demand remains strong and growing; capacity expansions are unlikely to make India a net exporter in near term.

- Chemplast Sanmar anticipates revenue growth in its Custom Manufactured Chemicals (CMC) business, targeting INR1,000-1,200 crores by FY '27-'28. - EBITDA margins in CMC are expected to improve to 20%-25% with scale-up. - The Paste PVC business is currently facing margin pressures due to low-priced imports, but volumes are increasing; margins are expected to recover as rationalization occurs. - New capacities in Paste PVC, CMCD, and refrigerant gas, alongside green energy initiatives, are expected to boost future profitability. - Refrigerant gas R-32 capacity expansion is underway, with new plants expected to be operational by early-mid 2026, supporting growth. - Debt levels have peaked; improved cash flows from higher capacities and green power are expected to reduce leverage going forward. - Overall, a sequential recovery in operating performance was noted, with optimism for stronger future earnings as capacity ramp-up and market conditions improve.

- The pipeline for the Custom Manufactured Chemicals (CMC) business is mostly agrochemicals, with some projects in non-agrochemicals such as pharma and fine chemicals. - The company has commercialized 3 molecules so far this year, with one more expected in Q4 FY '26. - Customer engagement remains very strong, and product pipeline traction continues positively. - Long-term demand and market projections for the business remain strong despite near-term price pressures. - The company's CMC division aims to reach revenues of INR 1,000 crores by FY '27. - Overall, the orderbook and project pipeline are robust, supporting the company's growth and capacity ramp-up plans.