Fairchem Organics Ltd (FAIRCHEMOR) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Valorem Advisors): Ladies and gentlemen, good day and welcome to Q2 & H1 FY27 earnings conference call of Fairchem Organics Limited, hosted by Valorem Advisors. 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. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you and over to you, ma'am.
Purvangi Jain (Valorem Advisors): Thank you. Good afternoon everyone and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Fairchem Organics Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter of the financial year 2027. Before we begin, a quick cautionary statement. Some of the statements made in today's concall may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audience is cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financials quarter under review. I would now like to introduce the management team joining us on today's call. We have with us Mr. Nahoosh Jariwala - Managing Director and Chairman, and Mr. Bhavesh Shah - Chief Financial Officer. Without any further delay, I would now like to hand the call over to Mr. Bhavesh Shah to begin with the financial highlights. Thank you and over to you, sir.
Bhavesh Shah (Fairchem Organics Ltd): Yeah, thanks, Purvangi, and good afternoon, everyone. Welcome to the earning call of Q2 and H1 FY27. For the quarter under review, the revenue from operations was 167 crores, reflecting 49.7% year-on-year increase from the corresponding quarter. EBITDA for the quarter was [inaudible] with an EBITDA margin of 10.5%.
Bhavesh Shah (Fairchem Organics Ltd): 100 12,200 tons of raw material and have sold 12,300 tons during the quarter. For the half year under review, the revenue from operations was 343 crores, reflecting increase of 41.4% against the corresponding quarter. EBITDA for the half year was at 35.4 crores with EBITDA margin of 10.3% and net profit for the half year was 20.2 crores. We have processed 24,600 tons of raw material and have sold 25,800 tons during H1 FY27. I will now handover the call to our Managing Director, Mr. Nahoosh Jariwala, happy to take questions during question and answer sessions.
Nahoosh Jariwala (Fairchem Organics Ltd): Thank you Bhavesh. As we enter the second half of financial year 2027, I want to share our operational perspective on the second quarter and the first half of the year as well as on the road ahead. Coming to our performance during the second quarter and the first half of financial 27, the business continued to benefit from the improved price realization primarily reflecting lower raw material cost and higher prices of finished products. The domestic market environment remains supportive with lower imports of dimer acid helping improve the realization and supporting the company's operating margin. Looking ahead, while we remain mindful of uncertainties arising from the ongoing Middle East crisis and broader global macroeconomic environment, we are cautiously optimistic about the outlook for the remaining part of the year. The reduction in U.S. tariffs along with the potential benefits from free trade agreements with U.K., European Union could provide a more favorable trade environment for us to export our products. Additionally, the recent reduction in import duty on the crude soyabean oil from 16.5% to 11% is expected to improve the raw material availability. We believe that better availability of key inputs combined with supportive domestic market conditions could help us enhance our capacity utilization over the course of the year. We will continue to closely monitor developments in global trade, raw material markets, and import competition as we navigate the coming two quarters. With that, I open the floor for a question-answer session.
Moderator (Valorem Advisors): 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 Riddhesh Ramgandhi with Discover Capital, please go ahead.
Riddhesh Ramgandhi (Discover Capital): Hi, sir. Just wanted to understand, you know, this reduction in import duty, what kind of impact do we see it happening on margins? Because I think somewhere on some of the earlier calls, we've spoken of a potential 8% margin hit because of this inverted duty. Now that it's been reduced, what are the sort of benefits and will we see this immediately from Q3 or is there inventory that we have where we don't see the implications from Q4?
Nahoosh Jariwala (Fairchem Organics Ltd): Basically, the reduction in duty on soyabean crude soyabean oil will help the refiners to process higher quantities of soyabean oil in comparison with the palm oil based on which the raw material availability for us will improve substantially and that is the main reason. And once the raw material availability improves, obviously there'll be some reduction in the prices also. So, that's the advantage what we'll get.
Riddhesh Ramgandhi (Discover Capital): So, how much how can we actually quantify this, like how much do we expect and look, see we've obviously seen a new run rate starting from Q1 of this year, you know, just wanted to understand
Riddhesh Ramgandhi (Discover Capital): Is this now the new base run rate which we see based on which we expect to grow? Or, and you know, how much would be the implication of this?
Nahoosh Jariwala (Fairchem Organics Ltd): Yes, you can say that it is a new run rate. Basically we suffered and we were saying time and again that we suffered badly because of the 27% duty on the crude oils, which made our raw materials too expensive. That's the reason and once the reasonableness has started coming in, we have started improving. We have not lost any market share. We have not I mean there's nothing negative about the thing. It was only the raw material costs had gone up substantially. Which now
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