Shares of Chemfab Alkalies rose 5% on the BSE to a four-year high of Rs 297.20 on Thursday. Commodity chemical inventories locked upstream for the fourth day in a row. In the past five weeks, it has risen 77% from Rs 167.80 on July 21 to support a strong business outlook.

Chemfab Alkalies is engaged in manufacturing basic inorganic chemicals and PVCO pipes. The stock traded at its highest level since April 2018. It hit an all-time high of Rs 314.95 on April 25, 2018.

In the April-June quarter (Q1FY23), Chemfab Alkalies reported a 67% sequential increase in consolidated net profit to Rs 21.34 crore. Compared with the same period last year (year-on-year), profit in Q1FY22 surged nearly sevenfold from Rs 3.06 crore. Operating income for Q1FY23 more than doubled to Rs 98.11 crore from Rs 47.04 crore a year ago. The company posted third-quarter revenue of Rs 88.09 crore.

Chemfab Alkalies has completed three years of operation in the PVCO pipe business. The industry has been significantly impacted by the pandemic over the past two years, a pivotal year for the industry’s stability.

Next year, the company expects order inflow to improve significantly, especially in the second half of the year. The company has created a higher capacity to meet rising demand and expects the PVCO pipe segment to witness substantial growth in the coming years.

“Demand for this product is expected to be very strong as central, and state governments focus on water connectivity and distribution. PVCO pipes have been embraced by government and non-government projects to date and have a solid track record; good growth in market demand is expected,” Chemfab Alkalies said in its FY22 annual report.

Meanwhile, the company’s wholly-owned subsidiary, Chemfab Alkalis Karaikal, will start construction activities next year at its Greenfield project in Karaikal, Pondicherry, which is working on a 250 t/d caustic soda plant and a 10,000 t/y aluminium chloride plant.

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“Increased capacity in the domestic industry could impact prices in the domestic market. While demand for the product will only grow, the industry must work hard to increase exports to keep demand balanced. Alumina remains a key driver of caustic soda demand in India, and global demand continues to grow. However, geopolitical issues remain the main threat,” the company added.