Chembond Chemicals Limited , a leading player in the specialty chemicals sector, has reported a mixed set of results for the second quarter of fiscal year 2026. The company, which operates across water technologies, construction chemicals, cleaning & hygiene, and distribution segments, saw a slight dip in revenue but managed to improve its margins.

Key Financial Highlights

Revenue Breakdown

Chembond Chemicals' consolidated revenue for Q2 FY26 stood at ₹73.04 crores, marking a 3% decrease from the same quarter last year. This decline was primarily attributed to lower sales in the construction chemicals and distribution segments. However, the company's core water technologies business, which accounts for 85-87% of total revenue, showed resilience with a 4% growth.

Margin Improvement

Despite the revenue dip, Chembond Chemicals managed to improve its profitability:

• EBITDA grew by 14% year-on-year to ₹11.08 crores.
• EBITDA margin expanded to 15.17% in Q2 FY26, up from 12.91% in Q2 FY25.
• Net profit increased by 4.35% to ₹7.20 crores.

The company attributed this margin improvement to lower raw material costs and the introduction of new product technologies.

Segment Performance

Water Technologies

This segment, which forms the backbone of Chembond's business, grew by 4% year-on-year. The company reported a strong order book in this segment, with over ₹100 crores worth of new orders.

Construction Chemicals

This segment faced challenges due to prolonged monsoons, which affected sales. However, the company expects a recovery in the second half of the fiscal year.

Cleaning & Hygiene and Distribution

These smaller segments also experienced a decline in sales but are expected to improve in the coming quarters.

Future Outlook

Chembond Chemicals maintains a positive outlook for the second half of FY26:

1. The company has a robust order book of over ₹100 crores in the water technologies business, with about 40-50% expected to be invoiced in the current fiscal year.
2. Activities in the construction chemicals segment are picking up, with growth observed from September onwards.
3. Management expects improved performance across all business units in H2 FY26.

Conclusion

While Chembond Chemicals faced some headwinds in Q2 FY26, particularly in revenue growth, the company's ability to improve margins and maintain a strong order book in its core water technologies business indicates resilience. Investors will be watching closely to see if the company can capitalize on its positive outlook for the second half of the fiscal year.

Chembond Chemicals has reported a mixed financial performance for the first half of the fiscal year 2025-26 (H1 FY26), with a slight dip in revenue but significant improvements in profitability.

Revenue Performance

The company's consolidated revenue for H1 FY26 stood at ₹138.40 crores, marking a marginal decline of 1% compared to the same period last year. This performance was characterized by varying results across different business units:

Profitability Improvements

Despite the slight revenue decline, Chembond Chemicals demonstrated significant improvements in profitability:

The company attributed the enhanced profitability to lower raw material costs and the introduction of newer product technologies.

Segment-wise Performance

Water Technologies

Showed robust growth with a 5% increase, supported by a strong order book.

Construction Chemicals

Experienced a 6% decline due to prolonged monsoons, but activity has picked up post-monsoon.

Distribution

Faced a significant 30% drop due to structural changes, with effects expected to stabilize by Q4.

Cleaning & Hygiene

Maintained steady growth at 3%, with an expanding prospect base.

Financial Highlights

• Operating EBITDA margin improved from 10.90% in H1 FY25 to 13.80% in H1 FY26, a substantial increase of 286 basis points.
• PAT margin also saw an improvement, rising from 8.80% to 9.70%.
• The company maintained a positive outlook, expecting further EBITDA improvements with anticipated revenue increases.

Management Commentary

The management noted that material costs have generally remained stable, with some volatility observed in metal compounds. They also mentioned that post-demerger compliances are on track, with records being updated.

Outlook

Chembond Chemicals maintains a positive revenue outlook across all business units. The company expects the Construction Chemicals segment to recover as monsoon effects subside, and anticipates the Distribution segment to show improvements by Q4 FY26.

As Chembond Chemicals navigates through these mixed results, investors will be keen to observe how the company's strategies in product innovation and cost management continue to impact its financial performance in the coming quarters.