Revenue and Profitability Trends
Chemplast Sanmar's net sales exhibited significant volatility over the past six years. Starting from ₹1,257.66 crores in March 2020, sales surged to a peak of ₹5,891.99 crores by March 2022, reflecting robust expansion. However, the subsequent years saw a decline, with sales dropping to ₹4,346.07 crores by March 2025. This contraction signals challenges in sustaining top-line growth amid market or operational pressures.
Operating profit margins have mirrored this trajectory. The company recorded an operating profit margin of 24.83% in March 2020, which climbed to an impressive 25.35% in March 2021 and peaked at 20.31% in March 2022. Yet, margins sharply contracted to 5.03% by March 2025, indicating rising costs or pricing pressures. Gross profit margins also followed a similar pattern, declining from 17.87% in 2020 to a mere 0.69% in 2025.
Profit after tax (PAT) margins further underscore this volatility. After achieving a healthy 10.81% in March 2021 and 11.01% in March 2022, the company swung to losses in the last two years, with PAT margins of -4.04% in March 2024 and -2.54% in March 2025. Correspondingly, earnings per share (EPS) dropped from a peak of 41.02 in March 2022 to a negative -6.98 in March 2025, reflecting the company's recent profitability challenges.
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Cost Structure and Expenditure
The company's raw material costs have consistently formed the largest portion of expenditure, rising from ₹436.52 crores in 2020 to ₹2,918.46 crores in 2025. Despite fluctuations in sales, raw material costs have remained substantial, impacting margins. Other expenses also increased notably, reaching ₹1,115.17 crores in 2025 from ₹441.15 crores in 2020, suggesting rising operational costs.
Employee costs have steadily increased, reflecting possible expansion or wage inflation, rising from ₹82.81 crores in 2020 to ₹259.31 crores in 2025. The company reported no power or manufacturing expenses separately in recent years, indicating possible accounting changes or cost absorption elsewhere.
Interest expenses have escalated from ₹95.46 crores in 2020 to ₹235.88 crores in 2025, signalling increased borrowing costs or higher debt levels, which have weighed on profitability. Depreciation charges have also risen moderately, consistent with asset base growth.
Balance Sheet and Financial Position
Chemplast Sanmar's total assets have grown steadily from ₹4,107.54 crores in 2020 to ₹6,503.19 crores in 2025, reflecting ongoing capital investments. Net block of fixed assets increased from ₹2,156.32 crores to ₹4,404.60 crores over the same period, indicating significant asset additions.
Shareholders' funds improved from a negative ₹349.49 crores in 2021 to a positive ₹2,068.43 crores in 2025, signalling a recovery in net worth. Total reserves also turned positive after a dip in 2021, reaching ₹1,955.05 crores in 2025.
However, the company’s debt profile shows mixed trends. Total debt rose from ₹1,288.74 crores in 2020 to ₹1,840.60 crores in 2025, with long-term borrowings increasing notably. Short-term borrowings also surged in recent years, which may raise liquidity concerns given the negative net current assets of ₹-939.67 crores in 2025.
Cash Flow Analysis
Cash flow from operating activities has been inconsistent, peaking at ₹1,076 crores in 2021 but turning negative to ₹-244 crores in 2024. Investing activities have generally been cash outflows, reflecting capital expenditure, with a significant outflow of ₹524 crores in 2024. Financing activities have fluctuated, with a positive inflow of ₹382 crores in 2024 after large outflows in prior years.
Closing cash and cash equivalents have varied, reaching ₹723.99 crores in 2025 after a dip in 2024, providing some liquidity cushion despite operational challenges.
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Summary of Historical Performance
Overall, Chemplast Sanmar has experienced a rollercoaster in its financial performance over the last six years. The company demonstrated strong revenue growth and profitability up to 2022, supported by expanding asset base and improving shareholder funds. However, the last two years have seen a reversal with declining sales, shrinking margins, and net losses. Rising interest costs and negative operating cash flows have added to financial pressures, while increasing debt levels and negative net current assets highlight liquidity risks.
Investors should weigh the company’s historical growth potential against recent operational and financial challenges. The recovery in shareholder equity and cash reserves offers some optimism, but sustained improvement in profitability and working capital management will be critical for future stability.
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