DCW reported a stellar fourth-quarter FY21, in May, with 56 percent revenue gain year on year and EBITDA (earnings before interest, taxes, depreciation, and amortization) gain of 600 percent at Rs 70 crore versus Rs 10 crore. The company’s operating profit margins were up at 15.3 percent versus 3.4 percent Y-o-Y and profit after tax came in at Rs 6.46 crore versus a loss of Rs 25 crore.

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Discussing the business outlook going forward and the pricing pressure for the polyvinyl chloride (PVC) business considering raw material prices going higher, Saatvik Jain, Promoter and President, DCW, said rising coal prices are a concern, which would impact the power and energy costs, but the issue is a problem for the whole industry and not just their company. DCW is, however, hopeful that the costs would be passed down the value chain, Jain said.

Talking about the extent of a price increase the company would look at, the DCW president said it would not be too significant as they have a basket of chemicals that cater to various industries plus they have export products.

“We overall have a hedge internally to absorb the price hikes but we do see improvement in caustic soda and soda ash prices. But no specific number as such,” he added.

Meanwhile, chlorinated polyvinyl chloride (C-PVC) is a relatively stable speciality chemical so there is no pressure on that business, Jain asserted.

Jain said that PVC witnessed price corrections from Q4 and Q3 of FY21, but along with prices normalising, the raw material prices are also normalising and so overall the margins of PVC business would also normalise going forward.

“Going forward, the company does not see a significant impact on volumes for the PVC business because the demand in India is strong”, Jain said.

For the full interview, watch video

(Edited by : Kanishka Sarkar)

First Published:Jun 28, 2021 5:22 PM IST