Fairchem Organics Q4 & FY26 Earnings: Revenue Falls 14.5%, Q4 EBITDA Jumps 81.7%
Fairchem Organics reported FY26 revenue of INR 4,596 Mn, down 14.5% YoY, with EBITDA declining 49.5% to INR 216 Mn and PAT (ex-exceptional) falling 71.8% to INR 62 Mn. Q4 FY26 showed recovery with EBITDA jumping 81.7% to INR 80 Mn and PAT rising 521.8% to INR 37 Mn. The company filed the audio recording of its earnings call held on May 7, 2026, under Regulation 30 of SEBI (LODR) Regulations, 2015, and recommended a dividend of Rs. 1.00 per share for FY26.
*this image is generated using AI for illustrative purposes only.
Fairchem Organics Limited has released its audited financial results and earnings presentation for the quarter and year ended March 31, 2026. The Board of Directors, which met on May 6, 2026, approved the financial statements prepared in accordance with Indian Accounting Standards (Ind-AS). M/s. B S R and Co, Chartered Accountants, issued an Independent Auditors' Report with an unmodified opinion on the results. The company also published an extract of these results in the Financial Express on May 7, 2026, pursuant to SEBI (LODR) Regulations. Pursuant to Regulation 30 read with Schedule III, Part A, Para A, Clause 15(b) of SEBI (LODR) Regulations, 2015, the company submitted a link for the audio recording of the earnings call held on May 7, 2026, from 3:30 p.m. onwards, covering the audited financial results for the quarter and year ended March 31, 2026. The recording is available at: https://fairchem.in/investor-relations/Investor-Presentation/Concall-Fairchem-Organics-Ltd-07-05-2026.mp3
Financial Performance Overview
For the financial year ended March 31, 2026, Fairchem Organics reported revenue from operations of INR 4,596 Mn, a decline of 14.5% year-on-year from INR 5,379 Mn in FY25. EBITDA for the full year stood at INR 216 Mn, down 49.5% from INR 428 Mn, with EBITDA margins contracting by 326 basis points to 4.70% from 7.96%. PAT excluding the exceptional item was INR 62 Mn, compared to INR 220 Mn in FY25, reflecting a 71.8% decline. Total income for the year was Rs. 46,095.38 lakh, down from Rs. 53,923.71 lakh in the prior year. An exceptional item of Rs. 88.27 lakh (net of tax: INR 7 Mn) was recognised during the year, arising from additional employee benefit obligations triggered by the Government of India's implementation of four new Labour Codes, including the Code on Wages, 2019, effective November 21, 2025. Management has classified this as a regulatory-driven, non-recurring charge. Basic and diluted EPS for the year stood at Rs. 4.28, compared to Rs. 16.88 in the previous year.
The annual financial performance is summarised below:
| Particulars (INR Mn): | FY26 | FY25 | YoY Change |
|---|---|---|---|
| Revenue from Operations | 4,596 | 5,379 | (14.5)% |
| Total Expenses | 4,380 | 4,951 | (11.5)% |
| EBITDA | 216 | 428 | (49.5)% |
| EBITDA Margins (%) | 4.70% | 7.96% | (326) Bps |
| Other Income | 13 | 13 | (2.5)% |
| Depreciation | 110 | 105 | 4.6% |
| Finance Cost | 37 | 37 | 0.8% |
| PBT | 82 | 299 | (72.6)% |
| Tax | 20 | 79 | (74.8)% |
| PAT w/o. Exceptional Item | 62 | 220 | (71.8)% |
| PAT Margins (%) | 1.35% | 4.09% | (274) Bps |
| Exceptional Item (Net of Tax) | 7 | — | NA |
| Other Comprehensive Income | 4 | (1) | NA |
| Total Comprehensive Income | 59 | 219 | (73.0)% |
| Basic/Diluted EPS (INR per share) | 4.28 | 16.88 | — |
Quarterly Results
In Q4 FY26, Fairchem Organics reported revenue from operations of INR 1,169 Mn, a decline of 3.2% year-on-year, reflecting weaker offtake from the paints industry. However, EBITDA improved sharply by 81.7% to INR 80 Mn from INR 44 Mn in Q4 FY25, with EBITDA margins expanding by 321 basis points to 6.87% from 3.66%, reflecting improved price realization in the domestic market due to lower imports. PAT excluding the exceptional item for the quarter stood at INR 37 Mn, a 521.8% increase from INR 6 Mn in the year-ago period. Total income for the quarter was Rs. 11,746.87 lakh, compared to Rs. 12,102.46 lakh in the corresponding quarter of the previous year.
The quarterly financial performance is detailed below:
| Particulars (INR Mn): | Q4 FY26 | Q4 FY25 | YoY Change |
|---|---|---|---|
| Revenue from Operations | 1,169 | 1,208 | (3.2)% |
| Total Expenses | 1,089 | 1,164 | (6.4)% |
| EBITDA | 80 | 44 | 81.7% |
| EBITDA Margins (%) | 6.87% | 3.66% | 321 Bps |
| Other Income | 5 | 5 | 121.5% |
| Depreciation | 27 | 26 | 2.9% |
| Finance Cost | 11 | 9 | 23.1% |
| PBT | 47 | 11 | 325.4% |
| Tax | 10 | 5 | 100.5% |
| PAT w/o. Exceptional Item | 37 | 6 | 521.8% |
| PAT Margins (%) | 3.16% | 0.49% | 267 Bps |
| Exceptional Item (Net of Tax) | 0 | — | NA |
| Other Comprehensive Income | 1 | (1) | — |
| Total Comprehensive Income | 38 | 5 | 635.3% |
Historical Financial Trends
Over a three-year period, Fairchem Organics has seen a consistent decline in revenue and profitability, with revenue falling from INR 6,215 Mn in FY24 to INR 4,596 Mn in FY26. EBITDA declined from INR 670 Mn in FY24 to INR 216 Mn in FY26, while PAT (excluding exceptional items) fell from INR 405 Mn to INR 62 Mn over the same period. Return ratios have also compressed significantly, with ROCE declining from 19.08% in FY24 to 3.88% in FY26 and ROE from 13.97% to 2.09%. The cash conversion cycle extended from 76 days in FY24 to 128 days in FY26, and net debt to equity rose from 0.02 to 0.32 over the same period.
| Particulars (INR Mn): | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue from Operations | 6,215 | 5,379 | 4,596 |
| EBITDA | 670 | 428 | 216 |
| EBITDA Margins (%) | 10.78% | 7.96% | 4.70% |
| PBT | 546 | 299 | 82 |
| PAT w/o. Exceptional Item | 405 | 220 | 62 |
| PAT Margins (%) | 6.52% | 4.09% | 1.35% |
| Total Comprehensive Income | 404 | 219 | 59 |
| Basic/Diluted EPS (INR per share) | 31.10 | 16.88 | 4.28 |
| ROCE (%) | 19.08% | 10.40% | 3.88% |
| ROE (%) | 13.97% | 7.28% | 2.09% |
| Net Debt to Equity | 0.02 | 0.20 | 0.32 |
| Cash Conversion Cycle (Days) | 76 | 99 | 128 |
Balance Sheet and Cash Flow Highlights
As at March 31, 2026, total assets stood at INR 3,910 Mn (Rs. 39,097.93 lakh), compared to INR 4,018 Mn in the prior year. Total equity was INR 2,631 Mn, comprising equity share capital of INR 126 Mn and other equity of INR 2,505 Mn. Current borrowings increased to INR 837 Mn from INR 630 Mn in FY25. Trade receivables declined to INR 681 Mn from INR 861 Mn, while inventories rose to INR 922 Mn from INR 883 Mn. For the year, net cash from operating activities was INR 416 Mn, a significant recovery from a net cash outflow of INR 168 Mn in FY25. Cash used in investing activities was INR 137 Mn, while cash used in financing activities was INR 279 Mn, which included a share buyback outflow and dividend payments. Cash and cash equivalents at the end of the period stood at INR 0.1 Mn.
| Particulars (INR Mn): | FY26 | FY25 | FY24 |
|---|---|---|---|
| Total Assets | 3,910 | 4,018 | 3,343 |
| Equity Share Capital | 126 | 130 | 130 |
| Other Equity | 2,505 | 2,890 | 2,769 |
| Total Equity | 2,631 | 3,020 | 2,899 |
| Current Borrowings | 837 | 630 | 73 |
| Trade Receivables | 681 | 861 | 568 |
| Inventories | 922 | 883 | 697 |
| Cash Flow from Operations | 416 | (168) | 745 |
| Cash Flow from Investing | (137) | (255) | (176) |
| Cash Flow from Financing | (279) | 423 | (569) |
Segment Performance
Fairchem Organics operates in a single reportable business segment — Speciality Chemicals, encompassing Oleo Chemicals and Intermediate Nutraceuticals. Almost all revenue is derived from domestic sales. Segment revenue for the year stood at Rs. 45,964.82 lakh, compared to Rs. 53,789.84 lakh in the prior year. Segment results (before finance costs and interest income) were Rs. 1,153.96 lakh for the year, against Rs. 3,352.99 lakh previously. Total segment assets were Rs. 39,097.93 lakh and segment liabilities were Rs. 12,793.90 lakh as at March 31, 2026.
Share Buyback
The Board of Directors, at its meeting held on November 20, 2025, approved a buyback of up to 4,25,000 equity shares of Rs. 10/- each at a price of Rs. 800/- per share, for an aggregate amount not exceeding Rs. 34 crores, through the Tender Offer route. Members approved the special resolution via Postal Ballot on December 26, 2025. The buyback offer opened on January 8, 2026 and closed on January 14, 2026. Settlement of all valid bids was completed on January 21, 2026, and 4,25,000 equity shares were extinguished on January 27, 2026.
Dividend and Capital Market Data
The Board of Directors has recommended a dividend of 10% (Rs. 1.00 per equity share on a par value of Rs. 10/-), subject to shareholder approval at the upcoming Annual General Meeting. The record date for dividend eligibility has been fixed as Monday, July 20, 2026. This compares to a dividend of 75.00% in each of FY24 and FY25, reflecting the significant compression in profitability during FY26. As of March 31, 2026, the company's market price on BSE stood at INR 433.5, with a 52-week high/low of INR 1,100.0/427.9. Market capitalisation was INR 5,460.9 Mn with 12.6 Mn equity shares outstanding. The shareholding pattern as on March 31, 2026 showed promoters holding 63.26%, public at 28.33%, FPI at 6.35%, and AIF at 2.06%.
| Capital Market Metric: | Details |
|---|---|
| Face Value (INR) | 10.0 |
| Market Price — BSE (INR) | 433.5 |
| 52-Week High/Low (INR) | 1,100.0 / 427.9 |
| Market Cap (INR Mn) | 5,460.9 |
| Equity Shares Outstanding (Mn) | 12.6 |
| 1-Year Avg. Trading Volume ('000) | 23.1 |
| Promoter Holding (%) | 63.26% |
| Public Holding (%) | 28.33% |
| FPI Holding (%) | 6.35% |
| AIF Holding (%) | 2.06% |
Business Strategy and Way Forward
Management has outlined four key strategic pillars to drive recovery and growth: cost optimisation, product upgradation, new product development, and geographical diversification. On cost optimisation, the company has undertaken detailed energy audits and is substituting imported catalysts with domestically sourced alternatives. Product upgradation initiatives include low titre Linoleic Acid for the oil field drilling industry, distilled dimer, and fatty oil upgradation for heating applications. New product development includes bypass fat from PFAD, Isostearic Acid adoption in the cosmetics industry, and the addition of one more raw material to produce a niche chemical. On geographical diversification, the company aims to increase exports to initially 25% and eventually 50% of sales, supported by the current level-playing tariff with the US and the proposed FTA with the EU and UK. Management noted that while macroeconomic conditions remain uncertain due to the Middle East crisis, the company is "consciously optimistic" given lower US tariffs, likely FTAs with the UK and EU, and recent rupee depreciation, which are expected to improve export competitiveness.
Corporate Governance Updates
The Board has considered the re-appointment of Shri Sudhin Choksey as an Independent Director for his second term. Shri Choksey brings 44 years of professional experience, including over 20 years as Managing Director of GRUH Finance Ltd. and a subsequent role as Executive Director (Designated) at Bandhan Bank. If approved by members, his tenure will extend from February 11, 2027, to February 10, 2032. The 7th Annual General Meeting is scheduled for Monday, July 27, 2026, via Video Conferencing and other Audio Visual Means. The Register of Members and Share Transfer Book will remain closed from Tuesday, July 21, 2026, to Monday, July 27, 2026 (both days inclusive), for the purpose of the AGM and dividend determination. The company's statutory auditors are KPMG, and it has been audited by one of the Big 4 for the last 9 years.
Historical Stock Returns for Fairchem Organics
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.41% | +9.60% | +25.70% | -15.28% | -22.05% | -25.78% |
Given the management's target of increasing exports to 25-50% of sales, what is the realistic timeline for Fairchem Organics to achieve meaningful export revenue, and which geographies or product lines are most likely to gain traction first under the proposed EU and UK FTAs?
With current borrowings rising sharply to INR 837 Mn and the cash conversion cycle extending to 128 days, how sustainable is Fairchem Organics' balance sheet if the paints industry demand weakness and import pressure persist through FY27?
The Q4 FY26 EBITDA margin recovery to 6.87% was attributed to lower imports improving domestic price realization — how durable is this tailwind, and what structural changes in import dynamics or trade policy would be needed to sustain margin improvement toward historical levels above 10%?
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