Key Financial Figures

  • Carbon segment net revenue increased by approximately 22% year-on-year in Q3 2026 to ₹39.8 billion despite lower volumes
  • Carbon Adjusted EBITDA was ₹7.4 billion in Q3 2026 (19% margin), down from ₹8.1 billion (22% margin) in Q2 2026, but 38% higher than Q3 2025
  • Cement sales volumes rose to approximately 670 thousand tonnes in Q3 2026, up 3% sequentially and 11% year-on-year
  • Cement segment reported Adjusted EBITDA loss of ₹113 million for Q3 2026
  • Net working capital stood at approximately $588 million at end-September 2026, reduced from $623 million at end-June 2026
  • Net debt to Adjusted EBITDA ratio improved to 2.6x at end-September 2026 from 3.6x at end-December 2025
  • Interest coverage strengthened to 3.4x from 2.6x over the same period
  • Liquidity position: $345 million at quarter-end
  • 2026 capital expenditure expected to be $60-65 million

Operational Updates

Carbon Segment Performance:

  • Capacity utilization across Carbon segment averaged 69% during first nine months of 2026
  • Calcination margins improved sequentially while distillation margins eased on higher raw material and energy costs
  • CPC realizations have risen meaningfully over the past year
  • CPC-to-GPC spread held broadly steady in Q3 compared to Q2 and remained well above year-ago levels

Facility Operations:

  • HHCR production in Europe temporarily taken offline due to high natural gas costs relative to Asian imports
  • Restart of idled kiln at Lake Charles, US targeted for December 2026
  • Indian DTA calcination plant annual maintenance completed, production restarted in October 2026
  • No material impact on sales volumes from maintenance due to pre-built inventory

Raw Material Allocation:

  • DGFT granted initial GPC import allocation of 598,000 tonnes for FY2026-27
  • Allocation covers about 85% of requirements, balance expected in second tranche around January 2027

Strategic Developments

Advanced Materials R&D:

  • Energy storage programs progressing through joint development agreements with Northern Graphite, Green Graphite Technologies, and major global MCMB producer
  • Development anchored at Technology Innovation Center in Hamilton, Canada using proprietary LIONCOAT® technology
  • Qualification cycles typically take several years; near-term material EBITDA contribution not expected

Market Positioning:

  • Global blending model restored, broadening sourcing flexibility and improving procurement economics
  • Multimodal logistics network enables shifting from barges to rail/road when required (at higher cost)
  • Serving new aluminum smelting capacity in Indonesia, Angola, Kazakhstan, Middle East, and South Asia
  • Resumed deliveries to Middle East smelters in Q3 as Persian Gulf shipping partially recovered

Regulatory Environment:

  • CBAM entered definitive phase on January 1, 2026, with certificate prices around €75 per tonne CO₂
  • Majority of RAIN's products fall outside CBAM scope, no foreseen CBAM-driven capex at European plants
  • Continuing reduction of carbon footprint through lower natural gas consumption and more green electricity

Debt Management and Capital Allocation

Debt Structure:

  • Senior Secured Notes: $450 million (reduced from $550 million since 2018)
  • Euro Term Loan B: €278 million (reduced from €390 million since 2018)
  • Prepaid €32 million of Term Loan B during Q3, prepaying all quarterly instalments due before October 2028 maturity
  • Extended $200 million revolving credit facility to April 2028
  • No major term debt maturities until October 2028

Refinancing Strategy:

  • Prepayment premium on US Dollar notes expected to decline to ~3% by March 2027
  • Refinancing would require clear interest saving and longer maturity considering all-in costs
  • Evaluating broader range of funding sources and markets
  • Considering raising portion of funding as amortising debt for scheduled repayments

Capital Return:

  • Board declared second interim dividend of 50 paise per share for 2026, following interim dividend of ₹1 per share paid in August
  • Share buyback would be evaluated alongside dividends based on leverage, cash generation and regulatory requirements
  • No equity raise planned due to improving credit profile and progress on debt reduction

Risk Factors and Challenges

Operational Constraints:

  • Cyclone Arnab impacted Andhra Pradesh coast on October 28, 2026
  • Low river levels in Europe persisting after exceptionally dry summer and autumn
  • European natural gas prices remain historically high as winter approaches
  • Competition from battery anode material producers for low- and medium-Sulphur GPC grades

Market Conditions:

  • South Indian cement market intensified competition due to consolidation
  • Sharp increase in fuel, coal and freight costs over last two quarters
  • Cement expansion deferred due to market conditions and return considerations

Forward-Looking Statements

Management noted that discussions included forward-looking statements concerning expected outcomes, trends, targets, and strategic priorities based on current expectations, subject to risks and uncertainties that could cause actual results to differ materially.

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