Company Overview

ARCL Organics Limited (Scrip Code: 543993) submitted its Annual Report for FY 2025-2026 to BSE Limited, disclosing mixed financial performance with revenue growth but significant profit decline due to one-time settlements.

Financial Performance

Standalone Results (₹ Crore)

| Particulars | FY 2025-26 | FY 2024-25 | Change |

| Total Income | 276.25 | 252.95 | 9.2% |

| EBITDA | 28.57 | 26.11 | 9.4% |

| Profit Before Tax (PBT) | 16.39 | 16.03 | 2.2% |

| Profit After Tax (PAT) | 4.68 | 11.75 | -60.2% |

Revenue from operations increased to ₹272.31 crore from ₹250.59 crore YoY, with export sales growing significantly to ₹104.33 crore from ₹81.51 crore. However, net profit declined sharply to ₹5.19 crore (consolidated) due to exceptional items.

Exceptional Items and Settlements

The company recorded one-time settlement charges of approximately ₹15.79 crore relating to legacy tax and duty matters:

  • Customs Dues: ₹5.10 crore settled with Principal Commissioner of Customs (₹2.74 crore upfront + balance in 24 installments)
  • Income Tax: ₹5.29 crore legacy arrears settled under Vivad Se Vishwas 2.0 Scheme
  • Municipal Tax: ₹4.40 crore settled after withdrawing Calcutta High Court litigation

Adjusted performance excluding these items showed strong growth: Standalone PAT (adjusted) of ₹16.95 crore vs ₹11.75 crore YoY, and Consolidated PBT (adjusted) of ₹24.57 crore vs ₹16.75 crore YoY.

Operational Highlights

  • Capacity Expansion: Acquired Vishvam Formalin and Angel Resins unit in Gujarat with formaldehyde capacity of 49,500 TPA and resins capacity of 60,000 TPA, including environment clearances for Paraformaldehyde and Hexamine
  • Export Performance: Crossed ₹100 crore mark in exports during FY26 with expectations for higher exports in current year
  • New Business Verticals: Developing feed additives, RTU glue, laminate resins, rubber and tyre chemicals, and resins for paper packaging
  • Manufacturing Assets: Gross block stood at ₹8,688.83 lakhs with major additions in Plant & Machinery (₹719.11 lakhs)

Balance Sheet and Financial Position

  • Inventories: Increased to ₹2,424.29 lakhs from ₹1,419.77 lakhs YoY
  • Trade Receivables: Decreased to ₹4,146.52 lakhs from ₹5,163.80 lakhs YoY
  • Borrowings: Non-current borrowings at ₹2,761.55 lakhs (including new ICICI Bank term loan), current borrowings at ₹4,322.32 lakhs
  • Debt Equity Ratio: 0.47 (Net Debt to Equity)
  • Cash Position: Cash and equivalents at ₹54.38 lakhs, down from ₹575.25 lakhs YoY
  • Share Capital: Unchanged at ₹800.00 lakhs (80,00,000 equity shares of ₹10 each)

Corporate Governance and Upcoming AGM

Shareholders will vote on September 19, 2026, on:

  • Adoption of Audited Standalone and Consolidated Financial Statements
  • Reappointment of Mr. Mukesh Mundhra as director
  • Increased remuneration for three executive directors (Suraj Ratan Mundhra, Rajesh Mundhra, Mukesh Mundhra) effective April 1, 2026, with monthly remuneration of ₹4,80,000 each

Contingencies and Commitments

  • Contingent liabilities of ₹180.28 lakhs from various excise and tax demands under appeal
  • Bank guarantees outstanding: ₹188.00 lakhs
  • Pending litigation: 1 Direct Tax case and 4 Indirect Tax cases
  • RCHEM Industries acquisition for ₹3.01 crore in March 2022, with shares not yet transferred as of March 31, 2026

Corporate Structure

  • Subsidiaries: 7 wholly owned subsidiaries including Yocnex Chemicals, Suksess Chemicals, and ARCL Petrochemicals
  • Shareholding: Promoters 53.30%, Bodies Corporate 15.92%, Other Bodies Corporate 16.50%
  • Employees: 206 permanent employees with median remuneration of ₹30,500 per month
  • CSR: Spent ₹36.59 lakhs (required: ₹33.70 lakhs) on rural development projects
  • R&D: Expenditure of ₹124.13 lakhs with DSIR certified in-house laboratory

Market and Sector Context

The company operates in the chemicals and specialty chemicals sector, showing resilience in revenue growth despite profitability challenges from legacy settlement issues. The expansion in Gujarat and focus on new product development position the company for future growth, though increased borrowings and contingent liabilities require monitoring.