DCW - DCW Ltd. Share Price

Management Outlook:
DCW Limited anticipates continued challenges in commodity chemicals due to global dumping and sluggish export demand, with pricing pressures expected to persist in Q2. However, H2 FY25 is projected to show improvement as green shoots emerge. Specialty chemicals (CPVC, SIOP) are expected to drive stability with volume growth from expanded capacities. Commodity prices (caustic, soda ash, synthetic rutile) may remain subdued, while PVC prices are correcting post-Q1 highs. Anti-dumping duties on CPVC imports are likely to be finalized, curbing price erosion. The company aims for chlorine neutrality by FY26, supported by internal consumption and strategic CAPEX. Renewable energy projects are on track for H2 completion.

Key Highlights:

1. Financials: Q1 revenue rose 14% YoY to Rs.500 crore despite price declines. Specialty segment EBITDA doubled YoY to Rs.47.8 crore, contributing 36% margins.
2. Commodity Segment: EBITDA dropped sharply due to price erosion (-12"“30% YoY). Caustic soda prices have likely bottomed out.
3. Specialty Chemicals:
   • CPVC: Capacity doubled, with 80% volume growth. Anti-dumping duty notifications expected soon.
   • SIOP: Volumes up 15% QoQ post-CAPEX; seasonal recovery expected in H2.
4. Synthetic Rutile: Export demand weak, but global supply remains stable.
5. CAPEX: Focus on specialty chemicals and renewables. SIOP capacity ramped up, targeting higher utilization.
6. Debt & Margins: Finance costs stable; incremental EBITDA from specialty segments to support deleveraging.

Segment-Specific:

• PVC: Prices corrected post-Q1 but remain volatile.
• Soda Ash: Margins to improve with normalized production (80"“85% utilization).
• Chlorine Utilization: Increased to 70%, targeting FY26 neutrality.

Overall, H2-weighted performance is expected, driven by specialty chemicals and operational efficiencies.

Question 1:
Question Text: "First question would be on the caustic soda division. So just wanted to understand the caustic soda division. So if we look, there is a clear dumping going from the industry, so how we have been witnessing in coming quarters, are we feel that prices in being bottoming out or still there will be a continuous dumping pressure, keeping the price intact or there will be erosion, still erosion would be there in terms of demand or outlook on the demand, as well as the price?"
Answer Summary: Management stated caustic soda prices have likely bottomed out due to global and domestic market pressures, with no further price drops expected. However, prices are unlikely to rise soon due to excess global capacity.

Question 2:
Question Text: "And I am just continuing with the same question. So, if we look at the chlorine, we are consuming internally in terms of chlorine so we don't have to pay for the disposing of the chlorine. So are we seeing any improvement in terms of capacity utilization in caustic soda because now we will be internally using and eventually it would help us to increase our caustic soda capabilities?"
Answer Summary: The company plans to increase caustic soda production capacity by ~15% shortly, aiming to utilize internal chlorine consumption better, with full capacity (250"“260 tonnes/day) expected soon.

Question 3:
Question Text: "And sir any comment on the CPVC, as we have been hearing of that there is a anti-dumping duty decision being made, like this is for currently it's under review. But are we looking any positive outlook due to such a dumping from East Asian countries. So are we positive on that part?"
Answer Summary: Anti-dumping duties on CPVC imports from China/Korea are expected to be finalized soon (before August expiry), curbing price undercutting. This will stabilize domestic pricing by preventing importers' misuse of invoicing practices.

Question 4:
Question Text: "Sir, I wanted to understand regarding our synthetic rutile segment, because, as we understand that another player Cochin Minerals, as well as some Kerala rare earth and all so there is an issue with ilmenite. So, sir I wanted to understand, how is our sourcing arrangement in this segment as well as do we make the same product as other players?"
Answer Summary: DCW sources ilmenite via imports and Indian Rare Earth Ltd., with no shortages anticipated. Its synthetic rutile is differentiated as higher grade (94"“95% TiO2) compared to competitors' lower-grade variants (88"“90%).

Question 5:
Question Text: "In the CPVC antidumping circular we have guided that we will make an additional investment of 150 crores for additional 20,000 metric tonnes of CPVC, so do we have some kind of timeline for this or?"
Answer Summary: No specific timeline was shared. CAPEX plans for CPVC expansion depend on chlorine neutrality goals, financial position, and project viability. Updates will follow once decisions are finalized.

Question 6:
Question Text: "What is the outlook if you can give me for this whole year, for revenue as well as margin terms, a general broad range would work?"
Answer Summary: Management refrained from formal guidance due to geopolitical and market uncertainties but emphasized stability via cost control, capacity utilization, and specialty chemicals growth. Performance is expected to improve in H2.

Question 7:
Question Text: "Can you give me sales volume for the quarter across the product segments?"
Answer Summary: Sales volume details were deferred to the investor deck, with a request to contact IR for specific numbers.

Question 8:
Question Text: "And secondly sir, can you update me with the current prices for PVC and CPVC?"
Answer Summary: CPVC prices are ~Rs.77,000"“78,000/tonne ex-works (down ~Rs.8,000 MoM), while PVC is ~Rs.70,000/tonne. SR averages $1,000"“1,250/tonne, and SIOP is $900"“1,000/tonne.

Question 9:
Question Text: "And sir, what was the reason for EBIT level loss for soda ash, sorry you have marginally made profit. So why was the profit down this quarter. Has the prices fallen much below the Quarter 4 levels?"
Answer Summary: Soda ash profitability dipped due to minor production stoppages, kiln maintenance, and price pressures. Operations are normalized, with 80"“85% capacity utilization expected ahead.

Question 10:
Question Text: "In current quarter also are we losing money in caustic soda like this, we incurred a loss of 20 crore in that segment. So, I am just worried, and want to understand that are we still losing money in caustic, soda, or there is somewhat improvement or we are at par now?"
Answer Summary: Caustic division faced price erosion and lower synthetic rutile exports in Q1, but H2 is expected to improve with stabilized pricing and demand recovery.

Question 11:
Question Text: "So, sir this synthetic rutile figures are not given in our presentation. So any reason for it?"
Answer Summary: Synthetic rutile sales and profitability are included under the caustic division in financial reporting, not broken out separately.

Question 12:
Question Text: "So, are we likely to come back to 60, 70 crores in this quarter, in synthetic iron oxide?"
Answer Summary: SIOP sales are seasonal, with higher volumes typically in H2. Q1's dip was due to seasonality and prior-year disruptions (floods). Gradual volume recovery is anticipated.