Volume growth masks margin compression; guidance cut on both revenue & EBITDA

Delivered ₹697.6 Cr, YoY +19% vs ₹586.1 Cr Q2 FY26

12.5% EBITDA margin on ₹697.6 Cr = ~₹87 Cr; YoY growth 21% vs ₹72 Cr Q2 FY26 ✓

Delivered ₹38.9 Cr, YoY +5.5% vs ₹36.9 Cr Q2 FY26

Current guidance 12–14% (mid-teens). This quarter 19% masks slower H2 assumed.

FY27 target now ₹12%+/–; core B2B margin 14.1% vs 14.8% YoY = 70 bps compression despite 21% EBITDA growth

Reliance expansion now expected Q2/Q3 FY28 (pushed); new facility at 30% utilization, no confirmation on incremental quantities

Prior ~15% FY27 unchanged → Current 12–14% mid-teens. EO supply constraint and logistics headwinds cited. Current Q2 19% does not extrapolate to H2.

Prior 15% post-B2C exit target → Current ₹12%+/– FY27 full-year. Core B2B margin 14.1% compressed 70 bps YoY; freight/logistics headwind ongoing.

Prior 'Dec 2026 expected' → Current Q2/Q3 FY28 (Reliance expansion). New ethoxylation facility at 30% utilization; no confirmation on Reliance allocation yet.

In-principle Board approval granted this quarter for land lease. Step-by-step approach; detailed capex/timeline in next 8–12 months. Equity + debt funding model.

Pharma last year ₹50 Cr exports; confident of 'very good growth' this year. H2 FY27 target ₹30–50 Cr (from prior call) not reaffirmed; approvals taking 6 months–2 years.

HPPC & Textile driving exports (34% YoY, 35% QoQ). Personal care, oil & gas, Southeast Asia, Africa, Latin America. First half 27% on H1 basis; targeting 30%+ by year-end. Thailand facility helping. New geographies (Bangladesh, Turkey) contributing.

Peak utilization ~2 years post-commissioning (end FY28). Target 3x of capex value for peak sales revenue. Reliance expansion expected Q2/Q3 next year. Currently 30% utilization on new facility; ramping up. No confirmation yet on Reliance allocation.

B2C turned EBITDA breakeven this quarter (from -₹3.7 Cr loss Q2 FY26). Plan to exit at appropriate time/value. Pharma, aroma ramping post-approvals. EXCIPACT cleared; regulatory approvals 6 months–2 years. Core B2B margin 14.1%.

In-principle Board approval given this quarter for land lease. Step-by-step approach; detailed capex/timeline after blueprint finalized (next 8–12 months). Exploring feedstock suppliers, market size, product mix. Equity + debt funding. Details to follow once finalized.

Freight costs significantly impacted margins YoY; raw material prices (phenol, etc.) up. Expenses on people, new geographies, Thailand facility, R&D investment. Going forward, margin improvement from product mix (pharma, aroma, higher-margin), cost optimization, tail rationalization. Margin trajectory TBD; working on it.

Priority on debt reduction. Most capex spend done in H1; H2 spend ₹50–75 Cr. Saudi project mostly capex in KSA (not India). Debt reduced ₹60 Cr H1 (₹280→₹220 Cr); target debt-free likely by mid-next year. Free cash will go to debt reduction first, then Saudi (mix of equity + debt funding for KSA).

ROCE will improve as capex spends complete and capacity utilization ramps (Unitop, ethoxylation facility, pharma/aroma). New products starting; margins improving. ROCE improvements coming in next year as plants deliver products. Gross margin profile stagnant currently; ROCE improvements via operating leverage as sales ramp.

FY27 target EBITDA ₹12%+/– full-year. Initial guidance ~similar to prior year; beat that. Revenue 12–14% growth for full year (mid-teens). Margin initiatives ongoing; new products, pharma, aroma. H2 margin likely similar/slightly better. Not hazarding specific H2 numbers due to geopolitical uncertainty.

Down from prior ~15% unchanged. Q2 19% growth not sustainable H2 due to EO supply delays, logistics headwinds, macro uncertainty. Current run-rate ₹1,400 Cr implies ₹1,410–₹1,450 Cr exit rate.

Down from prior 15% post-B2C exit target. Freight/logistics headwinds continuing; raw material costs up. Margin initiatives (product mix, pharma ramp, cost optimization) ahead of realization. Core B2B 14.1% currently.

Most capex (₹150+ Cr) completed H1. Spend on ethoxylation facility, pharma/aroma, hydrogenation (Unitop), R&D center. Saudi Arabia capex timing TBD (likely FY28+).

Reliance supply constrained Q2, hoping for relief Q3 or next year. New ethoxylation facility at 30% utilization. Reliance expansion expected Q2/Q3 FY28 (4 quarters away). No confirmation on incremental allocation.

Freight costs doubled, tripled in some cases. EBITDA margin compressed 70 bps despite 19% revenue growth. Customers not fully absorbing increases. Middle East turmoil, Bab el-Mandeb, ISO tank availability affecting shipments.

Core B2B EBITDA margin 14.1% vs 14.8% YoY (70 bps compression) despite 19% revenue growth & 21% EBITDA growth. ROCE declined to low-teens from prior 20–25%. New capex not yet accretive (30–60% utilization, pharma approvals pending).

FY27 revenue guidance cut from ~15% to 12–14%; EBITDA margin target from 15% post-B2C exit to 12%+/–. Signals management caution on H2 execution amid EO/logistics headwinds.

Saudi greenfield still in exploratory phase (land lease approved this quarter). Detailed capex/timeline expected in 8–12 months. Funding model (equity + debt) TBD. Potential for delays, cost escalation, or market reception risk.