Chemplast Sanmar’s record is under real strain: consolidated borrowings have nearly doubled in three years to ₹1,952 crore while credit ratings fell four notches, a ₹898 crore impairment on its main subsidiary has crystallised after years of auditor warnings, and the managing director, CFO, and company secretary all exited in a single year. The audit opinions remain unqualified, and the group structure is simple, but the financials now depend on lender waivers, extended supplier credit, and a pending regulatory nod for the new MD.
Key findings
- Borrowings nearly doubled to ₹1,952 crore as credit ratings fell four notches
Major- Consolidated borrowings rose from ₹1,008 crore in March 2023 to ₹1,952 crore in March 2026. CRISIL downgraded the company’s long-term rating from AA-/Negative to A/Negative across three steps between May 2025 and March 2026, and the short-term rating from A1+ to A1. The group also uses a supplier finance arrangement that stretches payables up to 120 days beyond normal terms, and subsidiary CCVL’s term loans carry bank put options of ₹453 crore, with ₹95 crore falling due in November 2026. - A ₹898 crore subsidiary impairment followed auditor warnings in FY23 and FY24
Major- The company recognised an exceptional impairment of ₹898 crore on its investment in wholly owned subsidiary CCVL in FY26, cutting the carrying value from ₹1,556 crore to ₹658 crore. The auditor had flagged impairment of this investment as a Key Audit Matter in both FY23 and FY24, noting CCVL’s negative net worth and persistent losses. The trigger was the non-notification of anti-dumping duty on S-PVC, removal of customs duty, and price erosion from low-priced imports. - MD, CFO, and company secretary all exited within a single year
Major- The managing director, CFO, and company secretary each ceased their roles effective 31 March 2026, and a non-independent director resigned on 9 April 2026. The incoming MD, appointed from 1 April 2026, does not meet the statutory residency test and requires Central Government approval. Public institutional shareholders cast 12.5% votes against both the outgoing MD’s two-month reappointment and the new MD’s appointment. - Revaluation reserves and tax-rate changes have materially offset reported losses
Major- The group revalued property, plant, and equipment in November 2024, eliminating ₹404 crore of accumulated depreciation and booking a ₹379 crore revaluation gain. Standalone total comprehensive income for FY25 was ₹356 crore, composed of a ₹66 crore retained-earnings loss and a ₹422 crore gain in the asset revaluation reserve. The company also opted for the lower tax rate under Section 115BAA from FY24, having stated a year earlier that it did not intend to adopt the new regime. - Contingent liabilities include a ₹332 crore guarantee and a remanded ₹147 crore GST demand
Minor- The company has provided a corporate guarantee of ₹332 crore for a soft loan of ₹77 crore taken by CCVL from the State Industries Promotion Council of Tamil Nadu. GST demand orders totalling ₹147 crore for FY18 to FY22 were set aside by the Madras High Court on 2 February 2024 and remanded for re-adjudication. The company states that all disputed tax demands are not sustainable. - Revenue recognition is a recurring Key Audit Matter, yet receivables remain low
Clean- The auditor identified timing of revenue recognition as a Key Audit Matter in the consolidated FY26 financial statements and in the standalone FY22 statements. Despite this, days sales outstanding stayed low at 8 days in FY26 and 13 days in FY25, and one customer contributed over 10% of standalone revenue in both years.
What to watch
- CCVL bank put options. ₹95 crore of CCVL term loans become puttable in November 2026, with annual covenant testing as at 31 March.
- MD residency approval. Central Government approval for the appointment of Mr S Ganeshkumar as Managing Director was pending as of the FY26 annual report.
- Anti-dumping investigation. Final findings of the DGTR investigation on S-PVC imports from the EU and Japan are expected in Q1 FY27.
- GST re-adjudication. The remanded GST demand of ₹147 crore awaits re-adjudication by the Assessment Officer following the Madras High Court order of 2 February 2024.
Bottom line: This is a disclosed but deteriorating record where the balance sheet, management bench, and core subsidiary have all weakened in plain sight. The ₹898 crore impairment is non-cash, but it confirms the stress that auditors had been signalling for three years. The immediate pressure points are the November 2026 bank put options and the pending regulatory nod for the new MD; read the next covenant test and the anti-dumping outcome as the two events that will set the direction from here.