Quarterly Financial Performance (Q2 FY27)

India Business (Standalone + Clean Coats):

  • Revenue: ₹588 crore, up 17.3% YoY
  • EBITDA: ₹40 crore, up from ₹12 crore in corresponding quarter last year
  • EBITDA Margin: 6.8%, expanded by over 400 basis points
  • Fifth consecutive quarter of EBITDA margin expansion

Consolidated Performance:

  • Revenue: ₹885 crore, up 9.2% YoY
  • Profitability impacted by Parador's weak performance

Half-Yearly Financial Performance (H1 FY27)

India Business:

  • Revenue: ₹1,422 crore, up 13.8% YoY
  • EBITDA: ₹138 crore, doubled from ₹69 crore in corresponding period last year
  • EBITDA Margin: Approximately 10%, expanded by over 400 basis points

Consolidated Performance:

  • Revenue: ₹2,059 crore, up 11% YoY
  • EBITDA: ₹82 crore, up approximately 30% from ₹63 crore in corresponding period last year

Segment-wise Performance Details

Roofs Segment:

  • Revenue: ₹244 crore, up 28% YoY
  • Volume growth: 21%
  • EBITDA Margin: 11.5%, improved by 320 basis points from 8.3% last year
  • Value-added products share: 35% higher than last year
  • Market share gains during the quarter
  • Comprehensive value enhancement program initiated with full benefits expected from next year

Walls Segment:

  • Revenue: ₹164 crore, up 5.4% YoY
  • EBITDA Margin: 12.3%, expanded by 120 basis points YoY and over 200 basis points QoQ
  • Volume growth: 1-2%
  • Realization growth: 5-9% depending on product
  • Capacity utilization: Approximately 85%
  • Expanded retail presence broadening demand base

Pipes Segment:

  • Revenue: ₹132 crore, up 20% YoY and sequentially
  • EBITDA Margin: Improved by 630 basis points YoY
  • Volume growth: 4%
  • Pricing and mix growth: 15%
  • Value-added products including fittings: 47% of portfolio
  • New business segments: Manufacturing as a service introduced

Construction Chemicals:

  • Revenue: Growth of 35% YoY
  • Clean Coats acquisition: Revenue up 50% compared to same period last year
  • Facing raw material cost pressures from geopolitical situation

Parador (International Business):

  • Revenue: Declined 4.4% in INR terms (11% decline in local currency)
  • Facing demand headwinds in key European markets and elevated raw material prices
  • Profitability impacted by cost pressures and lower volumes
  • Investment Impairment: Additional provision of ₹90 crore towards diminution in value of investment in BirlaNu International GmbH
  • Cumulative Provisions: ₹164 crore as of September 30, 2026
  • Carrying value to be reassessed regularly considering financial performance

Strategic Initiatives and Updates

Capacity Expansion:

  • Greenfield boards plant at Nellore: On track for commercial production in Q4 FY27
  • Second new project in Hyderabad: Expected to break ground by December 2026
  • These will strengthen position in premium Boards category

Product Innovation:

  • New products launched: Eco Roofs, QuikSeal, Poly Tech Waterproofing 2K in Roofs and Construction Chemicals
  • Several other launches planned for second half of the year

Sustainability Initiatives:

  • Rooftop solar commissioned at Golan and Chennai units
  • Solar capacity approved at 2 more manufacturing units
  • Green power expected to reach 20-25% of energy mix within next 2 years
  • Estimated annual cost savings: ₹4-5 crore from existing footprint
  • New plants targeting 40-50% renewable energy consumption with 30-35% savings

New Growth Initiatives:

  • AI-enabled materials discovery platform for architects and designers
  • Board approval for subsidiary creation with initial investment of ₹5 crore over 12-18 months
  • Asset-light model with short gestation to breakeven

Parador Turnaround Strategy:

  • BCG-led cost optimization program in Germany
  • Target savings: €9-14 million at EBITDA level
  • Implementation phase ongoing, results expected within 3-4 months
  • Geographical diversification: Focus on US, India, and Middle East markets
  • US performance: Already twice full FY26 performance in 6 months, expected 4-5x for full FY27
  • Commercial segment expansion alongside traditional DIY/retail business
  • Target: Non-European sales to cross 20% mark in 3 years (currently <10%)

Clean Coats Integration:

  • Expected completion by end of FY27, subject to statutory approvals
  • Expected synergies across operations, procurement, and business functions

Balance Sheet and Capital Structure

Debt Position:

  • Total debt: ₹896 crore as of September 30, 2026 (vs. ₹852 crore as of March 31, 2026)
  • Increase driven by investment in greenfield projects and capacity expansion

Working Capital:

  • Strengthened significantly compared to previous year and corresponding period
  • Focus on strategic sourcing and forex risk management

Financial Support to Parador:

  • Total exposure: €40 million
  • €20 million SBLC (Standby Letter of Credit)
  • €20 million corporate guarantee

Management Commentary and Outlook

External Risks:

  • Geopolitical uncertainties and global supply disruptions driving inflation in raw materials, energy, freight, and currency
  • High inflation and tight liquidity weighing on near-term demand
  • El Nino effect posing risk to farm output and rural demand

Response Strategy:

  • Discipline and agility with tight cost control through cost-out programs
  • Proactive risk management
  • Continued pursuit of pricing and efficiency actions
  • Protection of long-term growth investments

Confidence: Strong first-half performance provides confidence for second half with stronger portfolio, richer product mix, new capacity coming on stream, and focus on execution.

Q&A Session Highlights

Parador Concerns: Multiple analysts expressed concerns about prolonged underperformance, missed guidance, and value destruction. Management reiterated confidence in turnaround strategy through BCG cost optimization and geographical diversification.

Segment Clarifications:

  • Polymer division (Pipes, Construction Chemicals, Putty) explained: Putty declined 17% due to Diwali timing effect, but like-to-like basis same as last year
  • Pipes growth composition: 4% volume, 15% pricing and mix
  • Putty profitability: Just above breakeven, not making losses

Future Growth Drivers: Walls segment targeted to double from ₹500 crore to ₹1,000 crore level. Pipes and Construction Chemicals targeted for 3-4x growth from starting point a year ago.

European Market Outlook: New house permits and constructions showing positive trend in Germany after 12-15 months of increase, with expected lag effect on flooring demand.

Retail Technology: WhatsApp-based AI-driven tool deployed for retailer demand capture and engagement, providing direct access to retailer community with customized promotions.