InvestorQ : Why did Chemplast Sanmar report a sharp fall in profits despite much better revenue performance?
Tisha Malhotra made post

Why did Chemplast Sanmar report a sharp fall in profits despite much better revenue performance?

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Aashna Tripathi answered.
2 days ago
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Let us look at the revenue performance of Chemplast Sanmar first. The company reported 34.65% growth in sales at Rs1,807 crore for Q4FY22. FY22 full year revenues increased by 55.1% at Rs5,892 crore. In terms of its two main verticals, Chemplast saw steady sales growth across commodity chemicals and specialty chemicals. However, the net cash flow from operations for FY22 fell by -16.3% at Rs901 on a sharp rise in trade receivables and inventories. Chemplast had completed its IPO successfully during the current year.

Chemplast Sanmar

Rs in Crore

Mar-22

Mar-21

YOY

Dec-21

QOQ

Total Income (Rs cr)

₹ 1,806.94

₹ 1,341.95

34.65%

₹ 1,451.68

24.47%

Net Profit (Rs cr)

₹ 231.64

₹ 364.10

-36.38%

₹ 236.86

-2.20%

Diluted EPS (Rs)

₹ 14.65

₹ 27.16

₹ 14.98

Net Margins

12.82%

27.13%

16.32%

  

Net profit for Q4FY22, however, fell sharply by -36.4% at Rs231.64 crore. The sharp fall in the profits was largely because at an operating level, Chemplast Sanmar had to hold higher inventories on account of the supply chain constraints which forced higher funds locked in the working capital cycle. The EBIT of commodity chemicals fell very sharply, but was partially offset by EBIT on specialty chemicals. Net margins stood at 12.82% in Q4FY22 quarter compared to 27.13% in Q4FY21 and 16.32% in Q3FY22.

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