Epigral Ltd (EPIGRAL) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to Epigral Limited Q2 and FY '27 earnings conference call hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Mr. Gagan Dixit from Emkay Global Financial Service Limited. Thank you, and over to you.
Gagan Dixit (Emkay Global Financial Services Limited): Yeah. Good evening, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Maulik Patel, Chairman and Managing Director; Mr. Kaushal Soparkar, Executive Director; Mr. Rakesh Agarwal, Chief Financial Officer; and Mr. Milind Kotecha, Investor Relations and Strategy. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen.
Maulik Patel (Epigral Ltd): Good evening, everyone, and welcome to the call to discuss Epigral's Quarter 2 FY '27 performance. I believe you had an opportunity to view the earning presentation that was released earlier today. As we go through Quarter 2 FY '27, the chemical industry continued to face a complex, volatile, and highly challenging operating environment with headwinds expected to persist into the upcoming quarters. While we are seeing a positive recovery in volume demand and forming product realization, overall margin remains under pressure. This shrink is a direct result of the leg on time to pass through volatile feedstock prices and the normalization of previous inventory-led gains. Furthermore, external vulnerabilities, including the ongoing West Asia crisis, extended lead times, increasing global freight rates, and rising domestic transportation costs, continue to squeeze the industry's bottom line. Even in this challenging operating environment, we delivered revenue growth of 28%, driving by volume growth and improved realization. Our Derivatives & Specialty business contributed 57% of our total revenue in Quarter 2 FY '27. However, the EBITDA margin were impacted by high raw material prices from the volatile situations in West Asia. However, looking at the first half of FY '27, our performance remains resilient with revenue growth of 21% and EBITDA margin of 22%. Historically, the second half of the fiscal year outperforms the first, as H1 is typically on off-season for a of few of our products. Consequently, we maintain positive outlook for H2 FY '27. While the current environment is challenging, India's growing demand for chemicals keeps us positive about the in- industry's long-term outlook. In line with this, we have sustained our capex plan to ensure we are ready to meet this expanding market. Our capacity expansions for CPVC and EC, epichlorohydrin, are now in the final stages, with trial runs currently underway. We expect to commission both plants
Maulik Patel (Epigral Ltd): within a quarter time. Additionally, following the board approval for the epoxy resin and formulations and multipurpose plant projects last quarter, we are moving ahead with both initiatives as planned. The pilot plant for epoxy resin and MPP multipurpose plant are now ready and we will soon begin the customer approval process. This proactive step will help minimize qualification timelines once commercial production begins. As conveyed earlier, the revenue contribution from derivatives and specialty business stood at 57% in quarter two FY '27. This transition will accelerate going forward, driven by capital expenditure that we just discussed, ultimately the broadening our customer base to diversify and strengthen our business model. Epigral remains committed to strengthening our integrated manufacturing platform and expanding into high value chemical products, firmly believing that this ongoing portfolio diversification will enable us to deliver consistent growth over a longer period of time and secure long term value for our stakeholders. I now hand over the call to Mr. Rakesh Agrawal, who will take us through the financial.
Rakesh Agarwal (Epigral Ltd): Thank you. Let me take you through the quarterly numbers. Year on year, revenue increased by 28% to ₹752 crores compared to ₹589 crores in quarter two FY '26. This increase is on account of increase in sales revenue value of 6% and because of improved realization for majority of the products. EBITDA increased by 3% to ₹136 crores compared to ₹132 crores in Q2 FY '26. EBITDA margin stood at 18%. It was impacted on account of high cost of raw material for Q2 FY '27 on account of global uncertainty, impacting raw material and finished goods prices. PAT grew by 26% to ₹64 crores, comparable PAT of ₹51 crores in Q2 FY '26. Now let me take you through half yearly numbers. In first half year of FY '27, our revenue grew by 21% to ₹1,461 crores compared to ₹1,204 crores in FY '26. Growth is on account of volume growth and improved realizations. EBITDA stood at ₹315 crores compared to ₹296 crores. Even in this challenging and volatile raw material and finished goods prices, we are able to maintain margin of 22%. PAT stood at ₹164 crores compared to ₹131 crores. PAT margin stood at 11%, similar to H1 FY '26. ROCE stood at 15% on 30th September '26 on account of lower EBIT for trailing 12 months, also because of sizeable capital work-in-progress, which is yet to be contribute to profit and loss. If we remove capital work-in-progress, then our ROCE stand at 18% as on 30th September '26. Net debt to EBITDA stood at 0.9 as on 30th September '26 versus 0.8 on 30th September '25. Our net debt stood at ₹514 crores versus ₹496 crores as on 30th September '26. We are at comfortable level in terms of our debts. We have spent ₹88 crores on the CapEx in the first half of '27. With this, we can now open the floor for questions.
Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Nirav Jimudia (Anvil Wealth): Yeah, sir, good evening. Sir, a few questions from my side. So, first is on the coal side like what we have seen over last three, four months is that there has been a close to around 60%-70% increase in the coal prices. So, possibly it could have an affected a lot many coal-based caustic soda plants. So, if you can share your thoughts here like have we seen the commensurate increase in the caustic soda prices in the recent months to cover this cost increase? And also on the chlorine side like, very recently we have seen prices improving a lot, like they have been close to around positive. So, is it more towards covering the cost because of higher energy prices, or do you believe that the downstream demand has also improved which has led to this price improvement?
Maulik Patel (Epigral Ltd): Yeah. So, I think the Nearav, you know the coal prices increased and coal, most of the chlor-alkali plant in India is based on coal. Even gas has a more increase than the coal, in terms of fuel prices in the current environment. So, the caustic soda prices is a globally and has globally it has not moved as much as the required according to energy prices. So, the entire load of transfer of increased energy prices has come to on chlorine side, which is easy to increase in term in India, because the chlorine derivative side, the demand and the new plants and demand has increased in last 6 months and next 6 months also further is going to increase. So, I would say it is a new normal in the chlor-alkali industry, new environment will begin where the chlorine is almost like we used to give a chlorine, and the chlorine price was negative in the past. Now, I think going forward, we will not see the chlorine prices in the negative zone going forward from here onwards. And that is much easier to increase the price pass on because you know, caustic is globally decided in terms of the pricing, but the chlorine is domestic based only. So, I think it is easy to transfer the energy cost which has increased into the chlor-alkali, in the chlorine side compared to caustic side. And I think demand has also increased as many of the people has a value-addition and the downstream product is commissioned. That has resulted, and it is easy to increase on the chlorine side.
Nirav Jimudia (Anvil Wealth): Perfect. Sir, if you can share what was the ECU realization for second quarter and what is it currently and if you can give the range for chlorine prices that would be very helpful.
Milind Kotecha (Epigral Ltd): So, the ECU for caustic soda for quarter 2 is around 31-32,000, and the chlorine is somewhere around 0.
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