Key Financial Figures

Q2 FY27 Performance:

  • Total Income: ₹347.92 crores (89.5% YoY growth from ₹183.6 crores in Q2 FY26)
  • EBITDA: ₹72.92 crores (118.2% YoY growth from ₹33.42 crores)
  • Profit After Tax: ₹33.68 crores (vs ₹4.86 crores in Q2 FY26)
  • Volume Growth: 62% YoY and 7% QoQ

H1 FY27 Performance:

  • Total Income: ₹656.98 crores (71.7% YoY growth)
  • EBITDA: ₹147.33 crores (122.8% YoY growth)
  • Net Working Capital Cycle: 149 days
  • ROE: 27.3%
  • ROCE: 19.1% (corrected from initially stated 18.4%)
  • Debt-to-EBITDA: 2.09x (improved from 3.74x in FY26)

Cost Increases in Q2:

  • Freight cost increased from ₹10 crores in Q1 to ₹20 crores in Q2
  • Energy costs increased by ₹1.8 crores due to higher gas prices
  • Total additional costs: ₹21.8 crores

Capital Structure and Debt

  • Total Debt: ₹615 crores as of Q2 FY27
  • Short-term debt: ₹329 crores
  • Long-term debt: ₹286 crores
  • Planned FY27 Capex: ₹250 crores
  • Funding: ₹100 crores from internal accruals, ₹150 crores from sanctioned term loans

Operational Highlights

  • Capacity Utilization: 66% in Q2 FY27
  • Export Contribution: 70% of revenue (increased from 65% in Q1 FY27 and 63% in FY26)
  • Industrial Chemicals Business: Contributes approximately 90% of revenue
  • Product Portfolio: Expanded from 140+ to 152+ products

Strategic Updates and Future Outlook

Manufacturing Expansion:

  • Committed ₹250 crores capex for two new manufacturing buildings at Pakhajan site
  • Expected commercialization: Q4 FY28 or Q1 FY29
  • Soft customer commitments cover approximately 50% of new capacity

Supply Agreement:

  • Received ₹120 crores advance to date under contract
  • Trial production expected by Q4 FY27
  • Commercialization expected in Q1 FY28

Margin Guidance:

  • Management maintains EBITDA margin guidance of 20%+
  • Expect to pass on cost increases to customers from current quarter onwards
  • Target utilization: 75% in FY28, 80-85% in FY29 for existing facilities
  • New facilities target 50-60% utilization in first year

Growth Targets:

  • Revenue target: ₹1,600+ crores by FY28 (based on pre-war prices)
  • Long-term aspiration to double sales again after FY28

Risk Factors Discussed

  • Logistics challenges: vessel delays of 30-60 days vs standard 25-30 days
  • Rising freight and fuel prices
  • Raw material procurement challenges
  • Customer resistance to high prices and potential switching to cheaper alternatives
  • Volatility in global markets due to ongoing crises

Management Participants

  • Mr. Parag Jhaveri - Managing Director and Chief Executive Officer
  • Mr. Chirag Shah - Chief Financial Officer
  • Ms. Sejal Bhattar - Moderator from MUFG Intime