Strong Q1 delivery masks FY27 growth slowdown; Kronox upside deferred

Delivered ₹70.4 Cr, +31.3% YoY

OPM/EBITDA margin delivered at 28.1%

Delivered ₹16.3 Cr PAT, +59.3% YoY

Below prior 20-35% guidance; implies Q2-Q4 slowdown from Q1's 31%

Forward-looking; capex phased over 2-3 years, benefits FY29-31

Prior 20-35% growth → now 16-21% (₹250-260 Cr). Margin stable at 20% but Q1's 28% implies Q2-Q4 compression. Monsoon and integration drag flagged.

64.26% equity for ₹250 Cr (Aug 2026). Adds 185 products, global presence (Europe, N.America). Dahej capex ₹110 Cr over 2-3 yrs, phased.

Forward integration; 1,500 tons target FY27 vs 900 tons FY26. Now 9% of revenue; margin profile better than Boric acid.

Dahej expansion 18-24 months from now. Full capex execution in phases over 2-3 years. Plant design ready, customers reached. No capital constraint. Growth happens through phase execution, not waiting for capex.

Q1 benefited from right decisions post-acquisition (leadership, capacity optimization). Q2 historically soft monsoon. FY27 plan is 250-260 Cr at 20% EBITDA margin. Next year growth will continue, adding new capacities in Boron oxide and Boric acid. Margins up for next year.

Moved from ~₹127 to ₹155-160; cost pass-through active. Market premium product. Raw material (boron ore, sulphuric acid) volatile due to war, but we recover costs. Capacity utilization 96-98%; targeting 18,000 tons (vs nameplate 20,000).

At least 3-3.5x depending on product mix. Currently excipients and pharma/lab chemicals. Kronox has 185 products, strong global distribution in Europe and N.America. Indian market growing 11% CAGR. FY29 we start benefits, FY30-31 full capex impact.

₹134-135 Cr internal accruals, ₹48 Cr asset sale (Mumbai commercial office), ₹151 Cr term loan (pending final approval). ₹25 Cr contingency set aside. ₹80 Cr cash on Kronox balance sheet available for Capex. Total funding ₹432 Cr vs ₹400 Cr required.

Edelweiss is purely equity transaction, independent. NCD amount ~₹255 Cr outstanding (ballpark couple of crore rupees, exact details offline). Adequate funds for coupon/interest payments.

Q1 was 31% YoY, but Q2 expected soft due to monsoon seasonality. Full-year CAGR now 16-21% vs prior 20-35% target. Implies 11-12% EBITDA growth in absolute terms.

Q1 benefited from immediate post-acquisition cost optimization and price realization. Q2 historically soft; war-related raw material cost volatility continues. 20% margin implies 800 bps compression from Q1, but stable vs prior-year ~23%.

Dahej expansion 18-24 months timeline. Phased: first phase ₹55-60 Cr, rest already funded. CCO working with consulting firms on milestones. ₹80 Cr cash available on Kronox balance sheet plus internal accruals.

Capex timeline 18-24 months; if delayed, revenue/EBITDA benefit pushed beyond FY29. New leadership team unproven; 185-product portfolio integration complex. Management commitment strong but unproven.

Q1 EBITDA margin 28.1% but FY27 guidance only 20%. Implies 800 bps compression in Q2-Q4. Q2 monsoon soft historically. War-driven raw material costs volatile; pass-through may not persist 100%.

55-60% of Boric Acid revenue from steel & refractory (cyclical). If India steel demand slows (macro, China competition), volume and pricing both at risk. Estimated market 40,000 tons growing 8% CAGR to 53,000 tons by 2030.

Major raw materials: boron ore, sulphuric acid. War in Turkey/region driving price volatility. Moved pricing from ₹127 to ₹155-160, but war on/off cycles create uncertainty. If war ends, deflation risk; if war continues, cost may outpace pass-through.

₹50 Cr Kronox capex over 2-3 years; Dahej expansion 18-24 months. Environmental clearances, construction delays, equipment sourcing risks. If capex slips, FY29-31 benefit timeline pushed.

Q2 historically weak (monsoon); Q3-Q4 recovery expected. If macro weakens, recovery may not materialize. FY27 guidance of 16-21% assumes Q3-Q4 pickup; if delayed, full-year miss likely.