Epigral Limited reported a 25% year-on-year increase in net profit after tax (PAT) to ₹99 crore for the quarter ended June 30, 2026, driven by a 15% rise in revenue from operations to ₹709 crore. The growth was supported by a 5% increase in sales volume and improved realizations, allowing the company to maintain an EBITDA margin of 25%. This performance underscores the resilience of India’s specialty chemicals sector amid macroeconomic volatility, including geopolitical tensions affecting raw material prices.

The financial filing was submitted pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Gaurang Trivedi, Company Secretary & Compliance Officer of Epigral Limited, signed the press release on July 27, 2026. The un-audited results are available on the company’s website under the Investor Relations section.

Financial Performance Metrics

Maulik Patel, Chairman and Managing Director, attributed the growth to Epigral’s diversified product mix, which helped mitigate headwinds such as fluctuating raw material costs and shipment delays. Despite these challenges, operating conditions have stabilized, with overall plant utilization standing above 80%. The return on capital employed (ROCE) declined to 16% from 24% in the prior year quarter, primarily due to lower earnings before interest and tax (EBIT) in the trailing twelve months and significant capital work in progress. Net Debt/EBITDA stood at 0.8x as on June 30, 2026.

Strategic Expansion and Capex

The Board approved a strategic expansion involving an estimated capex of ₹600 crore. This investment will fund two key projects:

• Epoxy Resin & Formulations Plant: A new facility with a production capacity of 1,25,000 TPA. This move represents forward integration into advanced materials, catering to sectors such as renewable energy, automotive, electronics, and infrastructure.
• Multi-Purpose Plant (MPP): Designed to manufacture downstream products of the Epichlorohydrin (ECH) and Chlorotoluenes value chains, addressing domestic demand for pharmaceutical and agrochemical intermediates.

Both projects are expected to be commissioned in H2FY28. To validate product quality and optimize processes, Epigral is establishing pilot plant facilities for both units, targeted for operation by Q2FY27. Notably, more than 50% of the raw material value for the Epoxy Resin project will be sourced internally from Epigral’s existing Dahej complex, leveraging its backward integration advantages.

Additionally, capex for enhancing CPVC Resin, ECH, and Wind Solar Hybrid Power Plant capacities is moving as per schedule and is expected to be commissioned within the timeline and budget. The CPVC Resin expansion will add 75,000 TPA, bringing total capacity to 1,50,000 TPA, while the ECH expansion will add 50,000 TPA, reaching 1,00,000 TPA. Both are expected to commission in Q2FY27.

What the Numbers Show

The divergence between revenue growth and ROCE highlights the impact of ongoing capital intensity on short-term returns. While top-line growth accelerated to 15%, the ROCE compression to 16% reflects the drag from substantial capital work in progress. However, the maintenance of a 25% EBITDA margin amidst geopolitical volatility underscores pricing power and operational leverage. The planned ₹600 crore capex aims to enhance this margin profile further through internal sourcing, where over half of the raw materials for the new Epoxy Resin unit will be produced in-house, reducing external dependency and cost variability. With derivatives and specialty chemicals expected to constitute ~70% of revenue by FY28E, Epigral is strategically transitioning away from traditional chlor-alkali products.

Epigral Limited reported a standalone net profit of ₹99.18 crore for the quarter ended June 30, 2026, marking a 38% decline from ₹160.41 crore in the corresponding period of FY25. The drop in profitability stems from increased cost of materials consumed and the absence of a significant one-time tax benefit recorded in the prior year, even as revenue from operations grew 16% to ₹705.36 crore. Consolidated net profit stood at ₹99.74 crore, compared to ₹160.69 crore in Q1FY25. EBITDA for the quarter came in at ₹1.8B versus ₹1.6B in the year-ago period, while EBITDA margin contracted to 25.39% from 27% YoY.

The Board of Directors approved the unaudited financial results on July 27, 2026, pursuant to Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. M/s. S R B C & CO LLP, the statutory auditors, issued a limited review report on the figures. The results were prepared in accordance with Ind AS 34 "Interim Financial Reporting" under Section 133 of the Companies Act, 2013.

Financial Performance

Revenue from operations rose to ₹705.36 crore in Q1FY26 from ₹606.54 crore in Q1FY25. However, total expenses increased to ₹576.28 crore from ₹508.06 crore during the same period. The cost of materials consumed surged to ₹430.18 crore from ₹318.19 crore, reflecting higher input costs in the Chloro Alkali & Derivatives segment. Finance costs decreased significantly to ₹7.22 crore from ₹23.37 crore, providing some relief to the bottom line.

The profit before tax rose 25% to ₹133.18 crore from ₹106.73 crore. However, the tax expense for Q1FY26 was ₹34.00 crore, compared to a net tax credit of ₹53.68 crore in Q1FY25. The prior year's credit included a one-time deferred tax credit of ₹80.87 crores arising from the remeasurement of deferred tax liabilities after the company opted for the reduced tax rate under Section 115BAA of the Income-tax Act, 1961.

What the Numbers Show

The divergence between the 25% rise in pre-tax profits and the 38% fall in net profit highlights the impact of non-recurring items on Epigral's bottom line. Excluding the one-time deferred tax credit of ₹80.87 crores recognized in Q1FY25, the underlying tax burden has normalized. The current quarter's effective tax rate is approximately 25.5%, aligning with the standard corporate tax regime, whereas the prior year benefited from a massive accounting adjustment. The contraction in EBITDA margin to 25.39% from 27% further reflects the pressure from higher input costs, even as EBITDA in absolute terms improved. This suggests that while operational profitability is expanding due to revenue growth outpacing expense increases, headline net profit comparisons are distorted by the prior year's exceptional tax credit.

Strategic Developments

Epigral incorporated a wholly owned subsidiary, Epigral Advanced Material Limited, on July 07, 2026, aimed at manufacturing chemicals. Additionally, the company continues its investment in renewable energy through Pro-Zeal Green Power Ten Private Limited, where it holds a 26% equity stake and has invested ₹2.13 crores in optionally convertible debentures. The associated wind-solar hybrid power plant in Gujarat is expected to commence operations in the near future.