Key Financial Performance

  • Q4 FY26 revenue: ₹177 crore, representing 18% growth from previous quarter's ₹150 crore
  • Full year FY26 revenue: ₹582 crore, described as "one of the highest top lines in the company"
  • Margin compression in percentage terms due to raw material price increases, but absolute margins maintained
  • Significant increase in working capital requirements due to higher inventory values and changed payment terms
  • Short-term borrowings expanded substantially at interest rates of 8.75-9%
  • Working capital to sales ratio maintained at "less than two months overall" which is within industry norms

Operational Highlights

Supply Chain Disruptions

  • Middle East crisis affecting Gulf of Hormuz transit, which handles 50% of global sulfur trade
  • Roha plant (Maharashtra) operated at 60% capacity for approximately 15 days in March due to sulfur availability issues
  • Dahej plant (Gujarat) continued normal operations using domestic sulfur sources
  • Boron business experienced H1 FY26 disruption due to boron ore supply issues from Turkey
  • Boron operations resumed full capacity in H2 FY26 with adequate stocks now available

Market Developments

  • European specialty chemicals market continues to struggle
  • Successful development of Latin American markets to replace lost European business
  • Market expansion into Japan, Korea, and China underway
  • Specialty chemicals pricing follows quarterly contracts with lag in raw material cost pass-through

Product Segments

  • Sulfur price increases dramatically due to supply constraints and demand from Indonesian nickel smelter (3 million ton demand impact)
  • Non-boric acid products (ceramics, glass) affected by natural gas crisis in consuming centers like Morbi
  • Boron-based products experiencing market disruption due to customer stock liquidation

Capacity and Production

  • Two manufacturing locations: Dahej (Gujarat) and Roha (Maharashtra)
  • Both plants have similar capacity of approximately 350 tons per day of sulfuric acid
  • Current operations at full capacity at both locations as of call date
  • Specialty chemicals production limited by market demand rather than production capacity

Working Capital and Financing

  • Working capital increase due to:
  • Higher sulfur prices increasing debtor requirements and stock values
  • Boron business requiring advance payments with 90-120 day delivery terms (previously credit terms)
  • Increased inventory values across operations
  • Borrowing costs: 8.75-9% for incremental working capital lines

Asset Monetization Update

  • Land parcel at Nalimbi (near Ambernath) previously declared forest land
  • Supreme Court verdict in company's favor along with other litigants
  • Maharashtra government has not yet transferred land back to company name despite court order
  • Potential use of proceeds: CAPEX or debt reduction
  • No timeline available for resolution

Research and Development

  • R&D focused on process development and improvements
  • Current annual R&D spend approximately ₹2 crore (described as "people cost")
  • Plans to increase R&D efforts in coming quarters
  • New specialty products in development:
  • Boron-based specialty chemicals
  • Polymer for enhanced oil recovery applications (some commercial sales started)

Market Outlook and Guidance

  • Management declined to provide specific FY27 projections due to market volatility
  • Expect specialty chemicals performance to be better than FY26
  • Sulfur supply situation remains dynamic with continued price increases
  • Potential market restrictions if customers cannot absorb higher prices
  • Supply chain normalization expected to take months even if Strait of Hormuz reopens