Ellenbarrie Industrial Gases Releases Q3FY26 Earnings Call Transcript
Ellenbarrie Industrial Gases published its Q3FY26 earnings call transcript revealing sequential performance challenges despite year-on-year growth, with management discussing margin pressures from argon pricing and steel sector softness while confirming successful commissioning of 220 TPD Uluberia plant and maintaining 20-25% long-term revenue CAGR guidance.
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Ellenbarrie Industrial Gases Limited has released the official transcript of its Q3FY26 earnings conference call held on February 03, 2026, providing detailed insights into the company's quarterly performance, operational challenges, and strategic outlook. The call was hosted by Raadhi Capital and featured key management personnel discussing the mixed financial results and future expansion plans.
Management Commentary on Q3FY26 Performance
Chairman and Managing Director Padam Kumar Agarwala acknowledged that while year-on-year numbers showed healthy growth, Q3FY26 was a challenging quarter sequentially. The company reported revenue from operations of ₹813 million with total income reaching ₹974 million, but faced margin pressures due to specific market conditions.
| Performance Metrics: | Q3FY26 | Sequential Change |
|---|---|---|
| Revenue from Operations: | ₹813 million | -9% QoQ |
| Total Income: | ₹974 million | - |
| EBITDA: | ₹253 million | -25% QoQ |
| EBITDA Margin: | 31% | Down from 38% in Q2 |
| Net Profit: | ₹261 million | - |
The management identified two primary factors impacting quarterly performance: low argon realizations due to steel sector softness and oversupply from captive gas plants operated by steel manufacturers, and elevated other expenses driven by certain one-off costs.
Operational Updates and Capacity Expansion
Joint Managing Director Varun Agarwal provided updates on the company's expansion initiatives, confirming the successful commissioning of the Uluberia-II merchant plant in West Bengal with a capacity of 220 TPD. The management expects an 85% capacity utilization within 18 months from startup, with ramp-up proceeding well.
| Upcoming Projects: | Capacity | Timeline |
|---|---|---|
| East India On-site Plant: | 320 TPD | Q1 FY27 |
| North India Bulk Plant: | 220 TPD | H2 FY27 |
| West India Plant with Specialty Gases: | - | FY28 |
| Total Capex (3 projects): | ₹450 crores | - |
The company maintains its disciplined capital allocation approach with capex guidance of ₹2,500 million in FY26 and ₹2,000 million in FY27, while operating with a strong balance sheet and net cash position of ₹3,550 million.
Market Dynamics and Strategic Focus
During the earnings call, management discussed the evolving gases industry landscape, noting a gradual shift in focus from metals to renewables, recycling, and green energy, though metals continue to have maximum bearing on the business. The company addressed argon pricing challenges, with prices declining by more than 25% during the quarter, though management expects normalization as macro conditions improve.
| Market Positioning: | Details |
|---|---|
| Industry Market Size: | ₹15,000 crores |
| Industry Growth Rate: | ~10% annually |
| Company Market Share: | Mid-single digits |
| Argon Revenue Mix: | ~10% of total revenue |
| Long-term EBITDA Target: | 40% |
Solar and Specialty Gases Expansion
The management provided insights into the company's diversification strategy, particularly in solar and specialty gases. Varun Agarwal confirmed that the company has signed contracts with a couple of solar companies and is actively working with several more, expecting to conclude additional contracts in coming quarters. The western region facility will integrate high purity oxygen and nitrogen production with a warehouse and bottling station for specialty gases.
Forward Guidance and Outlook
Management reaffirmed its long-term revenue growth guidance of 20-25% CAGR, acknowledging that growth tends to be lumpy with step changes occurring as new capacities become operational. The company expects Q4FY26 to perform better than Q3FY26, driven by the impact of newly commissioned capacity.
| Financial Guidance: | Target |
|---|---|
| Long-term Revenue CAGR: | 20-25% |
| Target EBITDA Margin: | 40% |
| 9-month FY26 EBITDA Margin: | 36% |
| Capacity Utilization Target: | 85% within 18 months |
The earnings call transcript has been made available on the company's website and disseminated to stock exchanges in compliance with SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, as confirmed by Company Secretary Aditya Keshri.
Historical Stock Returns for Ellenbarrie Industrial Gases
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.63% | -3.10% | -6.96% | -52.83% | -54.74% | -54.74% |
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