Chemfab Alkalis Q2FY27 Investor Presentation Submission

Company Overview

Chemfab Alkalis Limited operates two distinct business segments: a chlor-alkali division producing caustic soda and related chemicals, and an OPVC pipes division serving India's water infrastructure projects. The company has 2 manufacturing units, over 250 team members, 65,700 TPA chlor-alkali capacity, and 20,000 TPA OPVC pipes capacity. In FY26, revenue contribution was 68% from chlor-alkali and 32% from OPVC pipes.

Q2FY27 Financial Performance (Consolidated)

Profit & Loss Statement (₹ in Crores):

Revenue from Operations: ₹75.61 (Q1FY27: ₹73.16, +3.35% QoQ; Q2FY26: ₹76.56, -1.24% YoY)
Operational EBITDA: ₹7.04 (Q1FY27: ₹10.13, -30.50% QoQ; Q2FY26: ₹5.46, +28.94% YoY)
Operational EBITDA Margin: 9.31% (Q1FY27: 13.85%, -454 bps; Q2FY26: 7.13%, +218 bps)
Other Income: ₹0.37 (Q1FY27: ₹2.08, -82.21%; Q2FY26: ₹1.76, -78.98%)
Finance Cost: ₹2.46 (Q1FY27: ₹2.21, +11.31%; Q2FY26: ₹1.94, +26.80%)
Depreciation: ₹7.90 (Q1FY27: ₹7.78, +1.54%; Q2FY26: ₹6.61, +19.52%)
Profit Before Tax: -₹2.95 (Q1FY27: ₹2.22, -232.88%; Q2FY26: -₹1.33, +121.80%)

Chemical Segment Performance (Q2FY27)

Revenue from Operations: ₹69.22 (Q1FY27: ₹67.41, +2.69%; Q2FY26: ₹49.82, +38.94%)
Operational EBITDA: ₹7.30 (Q1FY27: ₹7.74, -5.68%; Q2FY26: -₹4.25, -271.76%)
Operational EBITDA Margin: 10.55% (Q1FY27: 11.48%, -94 bps; Q2FY26: -8.53%, +1908 bps)
Other Income: ₹0.37 (Q1FY27: ₹1.75, -78.86%; Q2FY26: ₹0.84, -55.95%)
Finance Cost: ₹0.62 (Q1FY27: ₹0.85, -27.06%; Q2FY26: ₹0.64, -3.13%)
Depreciation: ₹4.99 (Q1FY27: ₹4.81, +3.74%; Q2FY26: ₹4.37, +14.19%)
Profit Before Tax: ₹2.11 (Q1FY27: ₹3.82, -44.76%; Q2FY26: -₹8.42, -125.06%)

OPVC Segment Performance (Q2FY27)

Revenue from Operations: ₹6.39 (Q1FY27: ₹5.75, +11.13%; Q2FY26: ₹26.74, -76.10%)
Operational EBITDA: -₹0.26 (Q1FY27: ₹2.39, -110.88%; Q2FY26: ₹9.71, -102.68%)
Operational EBITDA Margin: -4.07% (Q1FY27: 41.57%, -4563 bps; Q2FY26: 36.31%, -4038 bps)
Other Income: ₹0.00 (Q1FY27: ₹0.33, -100.00%; Q2FY26: ₹0.92, -100.00%)
Finance Cost: ₹1.84 (Q1FY27: ₹1.36, +35.29%; Q2FY26: ₹1.30, +41.54%)
Depreciation: ₹2.91 (Q1FY27: ₹2.97, -2.02%; Q2FY26: ₹2.24, +29.91%)
Profit Before Tax: -₹5.06 (Q1FY27: -₹1.60, +216.25%; Q2FY26: ₹7.09, -171.37%)

Management Commentary

Chemicals Segment: Global caustic soda prices softened during the quarter, with ECU realization falling from ₹39,600/MT in Q1FY27 to ₹38,000/MT in Q2FY27. Global prices appear to have bottomed out in October 2026. With realizations stabilizing, better operating efficiency, and structural cost improvements, the company expects the Chemical business's financial performance to improve from here.

OPVC Segment: Demand for OPVC pipes is improving significantly with rising enquiries and clearer visibility of orders. Only about 20% of enquiries come from Jal Jeevan Mission-linked work, with a large share for large-diameter pipes where the company's product range and manufacturing capability are strongest. A few more states have approved OPVC pipes for use, although the benefit will show only from FY28. The company expects revenue to pick up visibly from Q3FY27, with the main risk being the timing of fund releases for government projects.

Strategic Updates and Outlook

The outlook has improved for both segments, and the company expects stronger consolidated performance in H2FY27. Key strategic initiatives include:

OPVC Pipes capacity expansion from 14,000 TPA (FY25) to 20,000 TPA (FY26) with new lines in Sri City
₹56 crore investment in technology modernization completed in Q3FY26
₹15 crore hybrid power project with supply started in Q1FY27
Targeting government initiatives like Jal Jeevan Mission (extended to 2028) and AMRUT 2.0
Maintaining low OPEX in OPVC division through high automation and lean operations
Targeting rapid payback of 2-2.5 years per production line

Historical Financial Performance (Standalone)

Profit & Loss Statement (₹ in Crores):

| FY | Revenue | Operational EBITDA | EBITDA Margin | PAT | EPS (₹) |

| FY22 | 271.59 | 56.73 | 20.89% | 28.84 | 20.42 |

| FY23 | 331.36 | 112.20 | 33.86% | 91.02 | 46.76 |

| FY24 | 327.29 | 57.62 | 17.61% | 29.99 | 21.10 |

| FY25 | 322.09 | 53.29 | 16.54% | 15.22 | 10.65 |

| FY26 | 288.56 | 36.70 | 12.72% | 7.51 | 5.22 |

Balance Sheet (₹ in Crores):

| FY22 | 187.32 | 7.32 | 351.78 | 298.33 | 0.00 |

| FY23 | 184.17 | 13.69 | 413.26 | 363.32 | 0.00 |

| FY24 | 174.63 | 57.20 | 498.21 | 392.89 | 16.39 |

| FY25 | 242.25 | 11.70 | 545.98 | 407.78 | 63.80 |

| FY26 | 316.59 | 28.39 | 614.24 | 414.13 | 81.43 |

Cash Flow (₹ in Crores):

| FY22 | 55.18 | (21.29) | (24.57) | 9.31 |

| FY23 | 96.85 | (51.87) | (8.85) | 36.14 |

| FY24 | 52.09 | (130.48) | 16.14 | (62.25) |

| FY25 | 60.92 | (107.16) | 58.80 | 12.56 |

| FY26 | 40.04 | (83.30) | 30.71 | (11.65) |

Market Context and Growth Drivers

The OPVC pipes market was valued at ₹225 crore in FY26 and is projected to expand fourfold to ₹1,000 crore by FY29 (management estimates). Key growth drivers include:

Jal Jeevan Mission extended until 2028 with budgetary allocation of ₹67,000 crore for 2026-27
AMRUT 2.0 with FY27 budget allocation of ₹8,000 crore
13 states have approved OPVC pipes for water infrastructure projects
Increasing acceptance of OPVC pipes for projects up to 400mm diameter across India

Innovation and Sustainability Milestones

The company has several industry-first innovations including:

1985: First in India to introduce Membrane Technology in chlor-alkali sector
2003: Global first to introduce Ultrafiltration membrane system for brine clarification
2005: India's first to develop eco-friendly process to separate sodium sulphate from brine
2011: Patented Fully Enclosed Negative Pressure System (FENPS) for chlorine gas containment
2017: Patented process to convert brine sludge into bricks/blocks, eliminating solid waste
2023: Patented technology to remove trace iodide from brine—an industry-first