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DCW Results: Latest Quarterly Results & Analysis

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DCW Ltd. 11 Nov 2022 16:43 PM
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Q2FY23 Quarterly Result Announced for DCW Ltd.

Petrochemical firm DCW announced Q2FY23 results:

  • Q2FY23 & H1FY23:
    • Revenue from operations for H1FY23 stood at Rs 14,664.3 million, delivering growth of 34.2% on a YoY. Improved operational efficiency of the SIOP plant, coupled with favourable market conditions in Soda ash and Caustic Soda, led to robust performance in H1FY23.
    • EBITDA for H1FY23 stood at Rs 2,346.9 million, compared to Rs 1,403.0 million in H1FY22, delivering growth of 67.3% YoY. PVC prices have fallen significantly over the last two quarters. However, the company’s diversified portfolio, with the critical components of Specialty chemicals, mitigated the volatility and delivered stable margins for Q2FY23.
    • PAT stood at Rs 1,084.1 million in H1FY23, compared to a profit of Rs 330.4 million in H1FY22, delivering growth of 228.1% YoY.

Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd., said, "The Company's performance in H1FY23 is testimony to our long-drawn strategy of diversifying our product portfolio in a manner which provides resilience as well take advantage during favourable market conditions. As we have witnessed over the past several quarters, CPVC and SIOP performance has been relatively resilient and are contributing 25-30% in overall EBITDA on a steady state basis. Once we optimise our SIOP plants, the contribution from SIOP will further improve, bringing more consistency and stability to our earnings. The commodity segment business remains aligned with market conditions. In H1FY23, the Company saw a remarkable performance from Soda Ash and Caustic Soda with PVC remaining soft.

With the strategy of making our operations more efficient and the balance sheet more robust, the Company refinanced its high interest-bearing NCDs with market-aligned finance from leading bankers. This is expected to save our interest costs and cash outflows significantly. We believe our debt remains appropriate, with Net Debt to EBITDA expected to go down to levels of 1 by the end of this fiscal. We continue to look for an opportunity to utilise our in-house chlorine for various purposes. We are at an exciting crossroads for a long, sustained growth journey. We continue to endeavour a roadmap to create new highs going forward.”

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Petrochemicals firm DCW announced Q1FY23 Result :

  • DCW continues its solid growth momentum in Q1FY23 - its diversified portfolio defends against volatility.
  • Reports growth of 47.7% in Revenue YoY and 108.1% EBITDA YoY for Q1FY23.
  • A diversified product portfolio aids in countering volatility, imparting growth and stability.
  • Strength of specialty chemicals portfolio imparts overall stability to total earnings.
  • PVC segment got impacted with high Raw material costs and challenging market dynamics.
  • Revenue from operations for Q1FY23 stood at INR 7,686.5 Mn, delivering growth of 47.7 % on a YoY and 8.7% QoQ. Better operational efficiency, coupled with favourable market conditions across all its products, led to an overall improvement in revenue. SIOP, Soda Ash and Caustic Soda lead the growth with C-PCV affirming the stability in overall revenue.
  • EBITDA for Q1FY23 stood at INR 1,239.8 Mn, compared to INR 595.9 Mn in Q1FY22, delivering growth of 108.1% YoY and 24% QoQ. Higher raw material prices for PVC kept the margin of the Company restricted to 16.1%, which could have been better. Despite such a tailwind on RM front, margins were higher by 190 bps QoQ and 470bps YoY. The Company was able to pass on the higher costs of RM for commodities such as Soda Ash and Caustic soda from Q4FY22 onwards, which will gradually get reflected in coming quarters. However, raw material inflation remains a predominant challenge to the Company and the overall industry. The Company aims to gradually pass on the higher RM costs for C-PVC in the coming quarters.
  • PAT stood at INR 587.7 Mn in Q1FY23, compared to a profit of INR 133.7 Mn in Q1FY22 delivering growth of 340% YoY and 23% QoQ

Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd. said, “DCW has come a long way from being the first soda ash Company in India, to becoming the first CPVC manufacturer in India. The Company's diversified product portfolio has helped in mitigating the volatility within global commodity prices. Besides protecting volatility, the diversified product portfolio has also helped in providing growth and stability to the Company. CPVC and SIOP have reached a stage where, besides imparting growth, they are now providing resilience in the overall margin profile of the Company. Its consistently improving performance is proving to be a secure base for the Company's earnings and is expected to be the premier growth driver over the coming years. On the commodities front, where

PVC took the front seat in FY22, Q1FY23 witnessed softening in PVC performance which was backed by caustic soda and soda ash taking the lead and turn a challenging environment into a strong quarter. The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. The Company’s SIOP segment has witnessed steady growth over the last three years and has reached its highest capacity utilisation of 71% in Q1FY23. The SIOP segment has a strong order book, which gives sustained visibility for FY2023. The Company expects its CPVC business segment to stabilize to its earlier margin over FY2023 once higher raw material priced inventory is consumed. On the commodity chemicals front, Soda Ash has been witnessing a good demand scenario, which has helped us to report better performance. Besides Soda Ash, our Caustic Soda division is also witnessing strong momentum. The strong recovery in these commodities, coupled with strategic initiatives on the operations front, were the key drivers of the Company’s underlying performance. We continue to focus on excellence by leveraging our well-balanced portfolio, focusing on better operating performance and maintaining quality standards.”

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Petrochemicals company DCW declares Q4FY22 result:

  • DCW reports Q4&FY22 results; PAT surpasses INR 1bn
  • Specialty Chemical Revenue for FY22 increases 55% YoY, EBITDA by 36% YoY
  • Specialty chemicals EBITA contribution stands at INR 883mn, 26.7% of overall EBITDA
  • Capacity utilisation improves across all the segment
  • Revenue from operations for FY22 stood at INR 24.5 bn, delivering a growth of 68 % on a YoY basis. Better operational efficiency coupled with favourable market conditions across all its products led to an overall improvement in revenue.
  • EBITDA for FY22 stood at INR 3309 Mn compared to INR 2,207 Mn in FY21, delivering a growth of 50% YoY; higher capacity utilisation favourable demand scenario led to better absorption of higher raw material costs.
  • The Company has been able to pass on these costs to end consumers from Q4 onwards, which shall gradually reflect in coming quarters. However, raw material inflation remains a predominant challenge to the Company and the overall industry.
  • The Company has achieved all time high PAT of INR 1,075 mn in FY22, and it nearly grew 27x over FY21.

Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd. said, “FY22 has been a remarkable year for the Company, not only on profitability front but also on operations, balance sheet and cash flows front. Company surpassing INR 1bn in PAT is a testimony of company continuous and focused approach towards scaling up the processes and its product offerings. Transiting from Commodity chemicals dominated earnings to Speciality chemicals led growth was an encouraging and satisfying journey so far. We have been able to ignite all our growth silos at the right time, continuing to move with an inspiring momentum. We began our Fiscal year with strong CPVC performance, and later on gradually every segment picked up its growth momentum. Casutic soda performed exceptionally well in Q4FY22, which makes this segment a vital contributor to companys overall profitability.

The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential. Revenue and EBITDA from Specialty chemicals have been continuously improving every year and have been moving from strength to strength as we further focus on scaling up the operating efficiency of this business. It remains a growth engine driver from here on for the next 1-3 years.

Besides PVC on commodity chemicals front, our Caustic Soda division is also witnessing strong momentum. From Q4FY22 soda ash too joined the growth band wagon and saw a satisfying recovery. The strong rally in these commodities, coupled with strategic initiatives on the operations front, were the key drivers of the Company’s underlying performance. We continue to focus on excellence by leveraging our well-balanced portfolio, focusing on better operating performance and maintaining quality standards.”

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Petrochemicals company DCW declares Q3FY22 result:

  • Reports 73% higher Revenue YoY and 63% higher EBITDA YoY for 9MFY22
  • Q3 FY22 delivers highest ever Quarterly EBITDA, led by growth across segments
  • Revenue from operations for Q3FY22 stood at INR 6,534.95 Mn, dlivering growth of 69.9 % on a YoY basis. Better operational efficiency coupled with favourable market conditions across all its products led to overall improvement in revenue.
  • EBITDA for Q3FY22 stood at INR 906.60 Mn compared to INR 595.3 Mn in Q3FY21, delivering a growth of 52.29% YoY, despite of witnessing pressure on account of higher raw material prices for its speciality chemicals business. The Company has by in large been able to pass on this costs to end consumers from Q4 onwards, which will ease the pressure on the margin front for its overall speciality chemicals business.
  • PAT stood at INR 409.80 Mn in Q3FY22, compared to a profit of INR 64.4 Mn in Q3FY21.

Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Limited said, “Despite challenging environment in terms of raw material inflation and fear of a third covid wave, the Company’s performance has remained buoyant in Q3FY22. We have been able to ignite all our growth silos at the right time, continuing to move with an inspiring momentum. We began our Fiscal year with strong C-PVC performance, and from thereon we have been able to overcome challenges with strong responses. During 9MFY22, our C-PVC, SIOP , PVC and Caustic soda segment have reported substantial growth. Each segment has been delivering on its strengths, which gives immense confidence going ahead.

The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. C-PVC & SIOP maintained its strong foothold by contributing 25% to the total EBITDA during 9MFY22. The Company experienced raw material cost pressures during 9MFY22 for its specilaity chemical business. As the order book for speciality chemicals is medium to long term in nature, raw material inflation is passed on with a lag. Thus for SIOP where margins declined on QoQ due to higher raw material costs, it is expected to get neutralize going ahead.

On commodity chemicals front, PVC has been witnessing a good demand scenario, which has helped us to report better performance. Besides PVC, our Caustic Soda division is also witnessing strong momentum. The strong recovery in these commodities, coupled with strategic initatives on the operations front, were the key drivers of the Company’s underlying performance. We continue to focus on excellence by leveraging our well balanced portfiolio, focusing on better operating performance and maintaining quality standards.”

Result PDF

Highlights:

  • DCW reports an all round improvement in Q2FY22 performance; sales up 69% YoY and EBITDA up 58 % YoY.
  • Revenue from operations for Q2FY22 stood at INR 5719 Mn, a growth of 69 % on a YoY basis. Better operational effcieincy couple with favourable market conditions across all its products led to overall improvement in revenue.
  • EBITDA for Q2FY22 stood at INR 807 Mn compared to INR 511 Mn in Q2FY21 a growth of 58% YoY. EBITDA margins in Q2FY22 witnessed marginal pressure on account of higher raw material prices. The Company was not able to fully pass on the higher raw material prices which spiralled up in quarter. Raw materials like VCM, coal etc has been on increasing treand in H1FY22.
  • PAT stood at INR 197 Mn in Q2FY22, compared to a profit of INR 10 Mn in Q2FY21.
  • The company reported an all-around improvement in operations, leading to higher Revenue. Company’s performance was predominantly led by SIOP, PVC and CPVC. Speciality chemicals remains consistent contributer in the copmany’s earnings.
  • C-PVC: This segment remains a consistent growth driver for the company. The revenue from this segment increased by 59 % YoY to INR 531 Mn in Q2FY22 as against INR 334 Mn in Q2FY21. The growth was primarily driven by higher volumes and better realisations. Net Sales Realisation for CPVC witnessed an increase of 16% YoY.
  • SIOP: Consistent efforts have led to a positive turnaround of this division. Capacity utilization increased 853 bps YoY to 51% in Q2FY22, resulting in revenue growth of 124 % YoY . Realisation for SIOP (red) remains firm YoY.
  • PVC: This segment volume increased by 15% YoY. It reported a revenue of INR 3149 Mn in Q2FY22; 101 % growth YoY. Higher realisations coupled with higher volumes has led to robust performance for this division .

Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd. said, “With the gradual easing of lockdown post second wave of covid, the overall demand environment has remained positive in Q2FY22. While this positive momentum led to overall increase in offtake as well as realisations, however the supply side environment especially on energy costs and supply chain on various raw material front poses a challenge. The team has responded well to ensure customers are served with agility.

The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. C-PVC & SIOP maintained its strong foothold by contributing 20% to the total EBITDA. The SIOP division has been showing a promising turnaround and is likely to contribute meaningfully backed by higher capacity utilization and favourable market conditions in coming quarters. Order pipeline for our sepciality chemicals remains buoyant. On commodity chemicals front as well, PVC has been witnessing a good demand scenario which has helped company to report better performance. We continue our long term focus on excellence by leveraging our speciality chemical portfiolio, better operating performance and quality standards.”

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