Thirumalai Chemicals reported a near 78 percent slump in third-quarter net profit. R Parthasarathy, MD of Thirumalai Chemicals, spoke to CNBC-TV18 about the company's business plans and growth prospects.
“Towards the end of Q2 and early Q3, there was a sharp drop in prices due to crude prices dropping, the raw material and finished product started dropping, people – most of the small users and traders – had gone long in Asia. Therefore, there was a panic in the market all over Asia. People just sat on their hands and stopped buying for about a month and a half. Luckily for us, we didn’t have the pressure to liquidate anything though we had stocks, we decided to wait it out until margins recovered. So we lost a lot of volumes and also it settled down at a lower gross margin, lower EBITDA. Its volume has recovered since then over the last one and a half months and it is continuing to recover. It is quite stable right now at a lower level of margins, it will take a little time to recover,” Parthasarathy said on Thursday.
With regards to volumes growth, Parthasarathy said, “Our volumes dropped by about 30 percent between H1 and Q3 on an average. They had recovered to about 85-90 percent in Q4, margins will take a little time to recover. Volumes have recovered and our focus has been on the expansions and the new projects that we are commissioning one by one. Our balancesheet is strong so we didn’t have the necessity to liquidate anything.”
“We expanded our capacity in South India, doubled it. We are building a new plant for the commodity in Dahej, we are expanding in Malaysia, the study is going on, we have still not taken a final decision,” said Parthasarathy.