DCW Limited, a specialty chemicals company headquartered in Mumbai, declared Q3 FY23 revenue of Rs. 579.23 crore, down 11.6% and net profit after tax (PAT) of Rs. 48.2 crore, up 80.7%.  The company reported strong growth in profitability for Q3 & 9M FY23. EBITDA margins for Q3 FY23 grew by 440 bps YoY to 18.2%. Specialty chemicals continue to deliver stability in earnings, with EBITDA growing by 35% YoY for 9M FY23. Commodity chemicals also aided the Company’s growth momentum in 9M FY23, with EBITDA growing by 57.5% YoY.  Both the Caustic Soda & Soda Ash segments reported impressive revenue growth of 59% and 95% YoY for 9M FY23. The company’s strategy of substituting high-cost debt with low-cost has started yielding desired benefits; as a result, interest costs have seen a significant reduction of 29% YoY in Q3 FY23. This has given an additional fillip to the company’s growth momentum. The company envisages a further significant reduction in interest costs going ahead from its FY22 level. Such savings will lead to additional cash flows, which can be utilised as its growth capital. SIOP: Consistent efforts have led to a positive turnaround of this division. The SIOP’s plant capacity utilisation has been improving consistently. Plant capacity utilisation improved to 74% in Q3 FY23 (FY20-24%, FY21-38%, FY22-54%). For 9M FY23’ it reported revenue growth of 62.4% YoY and EBITDA growth of 300% YoY. C-PVC: This segment has been consistently performing over the last three years. The revenue from this segment increased by 12.5% YoY to Rs. 171.68 crore in 9M FY23. With an apparent shortfall in the domestic supply of C-PVC, the plans to double its CPVC capacity by adding another 10KT capacity. As per the company’s estimates, the CPVC project is expected to be commissioned in the 2nd half of FY24. Soda Ash: A favourable market scenario helped the company report better realisation for this segment. As a result, EBITDA for this segment in Q3 FY23 stood at Rs. 17.68 crore, compared to an EBITDA loss of Rs. 5.65 crore in Q3 FY22. With the global supply chain facing various issues, prices of soda ash remain favourable Caustic Soda: A favourable demand scenario, coupled with the Company’s strategic decisions of tying up with clients at appropriate times, has improved performance in Q3 FY23. Revenue from this division in Q3 FY23 stood at Rs. 227.45 crore, compared to Rs. 189.28 crore in Q3 FY22, delivering a growth of 20.2% YoY. Commenting on the results, Vivek Jain, Managing Director, DCW Ltd. said, “DCW results for 9M FY23 has shown a significant strength on the back of a well-diversified and balanced product portfolio. Over the past couple of years, the specialty chemicals business has given the company a solid foundation and base to grow significantly. As our specialty segment gives us stability and consistency, the commodity segment gives the additional bandwidth to play on favourable market dynamics. Over the past couple of years, the company has garnered the benefits of this strategic combination. FY22 was a promising year for PVC, 9M FY23 was favourable for Caustic soda and Soda Ash.” “The specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. Thus the company plans to double its CPVC capacity by adding another 10KT capacity. The company also plans to augment the capacity utilisation of its SIOP plant to 100% with some line balancing Capex to generate an additional 10KT of production per annum. This Capex aligns with our overall strategy of making further inroads into and expanding our speciality chemicals business. These Capexs – in expanding our CPVC capacity and taking our existing SIOP capacity to near 100%, will further strengthen our position in the marketplace, considering the demand curve for both these products. We are also committed to growing our specialty portfolio going forward, and our strategy and R&D teams are already focused on the next growth drivers and on identifying products relating to chlorine & other related chemistry to add/expand to our portfolio,” commented Jain.  “We continue to focus on excellence by leveraging our well-balanced portfolio, improving operating performance, and maintaining quality standards,” added Jain. 

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