Chemfab Alkalis reported a consolidated net profit of ₹573.04 million for Q1FY27, a 124% increase from ₹254.76 million in the corresponding period last year, driven primarily by a significant deferred tax credit. The Chennai-based chemical manufacturer also appointed M/s. M S K A & Associates LLP as its new statutory auditor, subject to shareholder approval at the upcoming Annual General Meeting (AGM).

The Board of Directors approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026, on July 29, 2026. The results were reviewed by the Audit Committee and supported by a limited review report from current statutory auditors Deloitte Haskins & Sells LLP. The company’s revenue from operations declined to ₹7,315.98 million (₹731.6 million) from ₹9,154.09 million (₹915.4 million) year-on-year, reflecting a challenging top-line environment.

Financial Performance Overview

Despite the revenue contraction, Chemfab Alkalis delivered strong bottom-line growth due to non-operating factors. The consolidated profit before tax stood at ₹222.37 million, compared to ₹469.98 million in Q1FY26. However, the total tax expense for the quarter was a credit of ₹350.67 million, contrasting with an expense of ₹215.22 million in the prior year period.

This reversal was largely due to a re-measurement of Deferred Tax Liabilities. The company exercised the option for a lower tax rate under Section 200 of the Income Tax Act 2025 (erstwhile Section 115BAA), resulting in a tax credit of ₹380.27 million accounted for in the current quarter. This accounting adjustment significantly boosted the net profit figure, masking the operational pressure seen in the pre-tax numbers.

Segmental Analysis

The company operates through two reportable segments: Chemicals and Related Products, and PVC-O Pipes. The Chemicals segment contributed ₹6,741.01 million to revenue, up from ₹5,283.89 million in Q1FY26, showing resilience in this core business area. In contrast, the PVC-O Pipes segment saw a sharp decline in revenue to ₹574.97 million from ₹3,870.20 million year-on-year.

Segment profitability mirrored this trend. The Chemicals segment reported a result before tax of ₹292.03 million, improving from a loss of ₹372.49 million in the previous year. Conversely, the PVC-O Pipes segment incurred a loss before tax of ₹57.23 million, compared to a profit of ₹863.16 million in Q1FY26. This divergence highlights the shifting dynamics within the group’s portfolio, with the chemicals business offsetting weaknesses in the piping division.

Auditor Appointment

In a separate resolution, the Board appointed M/s. M S K A & Associates LLP (FRN. 001595S/S000168) as the Statutory Auditor for the first term of five consecutive years. This appointment is consequent upon the expiry of the tenure of the existing auditor, Deloitte Haskins & Sells LLP. The new appointment is effective from the conclusion of the ensuing AGM, subject to shareholder approval. M S K A & Associates LLP is registered with the Institute of Chartered Accountants of India (ICAI) and the PCAOB.

What the Numbers Show

The stark contrast between the decline in Profit Before Tax (-52.7%) and the surge in Net Profit (+124.9%) underscores the dominance of tax adjustments in driving the headline earnings for Q1FY27. While the operational performance improved in the Chemicals segment, the overall pre-tax profit fell significantly due to the collapse in the PVC-O Pipes segment’s contribution. Investors should note that the reported net profit growth is largely attributable to the one-time tax credit rather than sustained operational leverage or revenue expansion.

Promoters of Chemfab Alkalies have confirmed that no shares held by them or persons acting in concert were encumbered during the financial year 2025-26. The declarations were submitted to comply with Regulation 31(4) of the SEBI (Substantial Acquisition of Shares & Takeover) (Second Amendment) Regulation, 2019. The disclosures provide transparency regarding the holding status of key stakeholders.

Suresh Krishnamurthi Rao declared that he has not encumbered any shares of the company directly or indirectly during the financial year under review. Similarly, Dr. Rao Holdings Pte Limited confirmed that it has not encumbered any shares belonging to the company or persons acting in concert.

K. M. Padma also submitted a declaration stating that no shares held by her were encumbered during FY26. Team Hiitec Eqpt Private Limited provided an identical confirmation regarding its shareholding in the company.

Ramachandran N stated that he does not hold any shares in Chemfab Alkalies. Consequently, he declared that the provisions regarding encumbrance under Regulation 31(4) are not applicable to him, and there is no encumbrance on shares along with persons acting in concert.

The declarations were signed and dated April 01, 2026, in Chennai. The filings ensure regulatory compliance regarding the disclosure of share encumbrances by promoters.

Promoter Declarations