Epigral Limited , a leading chemical manufacturer, reported a 4% decline in revenue to Rs 589.00 crore for the second quarter of fiscal year 2026, despite a 2% growth in sales volume. The company's performance was impacted by reduced price realizations across key product categories, including CPVC, hydrogen peroxide, and caustic soda.

Financial Highlights

Key Factors Affecting Performance

The company's performance in Q2 FY26 was influenced by several factors:

1. Extended Monsoon: An early and prolonged monsoon season affected demand across various sectors.
2. Price Realizations: Reduced realizations in CPVC, hydrogen peroxide, and caustic soda products impacted revenue.
3. Plant Maintenance: Ongoing maintenance work at the plant affected overall production.

Product-wise Performance

• CPVC: Prices dropped by approximately 10% quarter-on-quarter, with current prices around Rs 100.00-105.00 per kg.
• Hydrogen Peroxide: Experienced a decline in price realizations.
• Caustic Soda: Witnessed a price drop of around 10%.

Capacity Utilization and Future Outlook

• CPVC capacity utilization stands at about 50%.
• The company expects volume growth in H2 FY26, positioning the second half for stronger performance compared to H1.
• Early signs of demand recovery are visible with the conclusion of the monsoon and completion of plant maintenance activities.

Ongoing Projects and Expansion Plans

Epigral's management reported that their CAPEX projects are progressing as per schedule:

1. CPVC Capacity: Doubling of capacity
2. Epichlorohydrin Capacity: Expansion underway
3. Renewable Energy: 19.8 Megawatt wind-solar hybrid power plant

These projects are expected to be commissioned within the announced timeline and budget, strengthening the company's diversification strategy.

Chlorotoluene Value Chain

• The Chlorotoluene plant, commissioned in March 2025, is expected to contribute significantly to the P&L from FY 2027 onwards.
• The company is targeting 8-9 products in the first phase, focusing on current customer base and market scenarios.
• Sizable revenue contribution from this segment is expected from Q4 FY26 or Q1 FY27.

Management Commentary

Mr. Maulik Patel, Chairman and Managing Director, stated, "Despite headwinds, Market outlook suggests that the chemical industry is poised to deliver better performance in the second half of the year compared to the first half, supported by improving demand fundamentals and the gradual recovery across key sectors."

Future Outlook

1. The company expects CPVC prices to improve from Q4 FY26 onwards, considering the current situation as a bottom-out scenario.
2. Epigral is working on new chemistry projects, targeting products with double-digit growth potential for the next 10-15 years, particularly in the construction and infrastructure segments.
3. The management anticipates announcing new CAPEX plans within the current fiscal year, focusing on import substitution and high-growth areas.

Epigral Limited remains focused on scalable, profitable growth, strengthening integration, and driving value for all stakeholders through capacity expansion and capability enhancement.

Epigral Limited (ISIN: INE071N01016), a leading integrated chemical manufacturer in India, has reported its financial results for the second quarter of fiscal year 2026, ending September 30, 2025. The company faced challenges due to extended monsoons but remains optimistic about its future performance and ongoing expansion projects.

Q2 FY26 Financial Highlights

• Revenue: ₹589.10 crore, down 7% year-on-year from ₹632.00 crore in Q2 FY25
• EBITDA: ₹132.00 crore, with a margin of 23%, compared to ₹178.00 crore and 29% margin in Q2 FY25
• Net Profit: ₹51.52 crore, a 36% decrease from ₹80.53 crore in the same quarter last year

H1 FY26 Performance

For the first half of FY26, Epigral reported:

• Revenue: ₹1,203.89 crore, a 6% decrease from ₹1,285.21 crore in H1 FY25
• EBITDA: ₹296.00 crore, with a margin of 25%, down from ₹355.00 crore and 28% margin in H1 FY25
• Net Profit: ₹211.93 crore, including a one-time deferred tax credit of ₹80.87 crore

Operational Insights

The company's performance in Q2 FY26 was impacted by several factors:

• Plant utilization stood at 78%, an improvement from 73% in the previous quarter
• Sales volume grew by 2% compared to the previous quarter
• Extended monsoon season affected demand for certain products
• Drop in realizations for some products contributed to lower revenue and margins

Management Commentary

Maulik Patel, Chairman and Managing Director of Epigral, commented on the results: "This quarter ended with lower revenue on account of low sales volume and drop in realization of few products. Volume drop was majorly on account of extended monsoon which is off season for few products. Overall plant utilization stood at 75% for H1FY26 and we expect utilization to improve in H2FY26, as extended monsoon is over and maintenance work at plant is also completed, resulting in better H2 compared to H1."

Expansion and Future Outlook

Epigral continues to focus on its growth strategy:

• Ongoing projects to expand CPVC and Epichlorohydrin capacities are progressing as scheduled
• CPVC Resin capacity will reach 150,000 TPA with an additional 75,000 TPA
• Epichlorohydrin capacity will increase to 100,000 TPA with an additional 50,000 TPA
• A new Wind Solar Hybrid Power Plant with 19.80 MW capacity is under development

These expansion projects are expected to be commissioned in H1 FY27, potentially driving growth from FY2027 onwards.

Financial Position

As of September 30, 2025:

Conclusion

While Epigral faced challenges in Q2 FY26 due to seasonal factors and market conditions, the company maintains a positive outlook for the second half of the fiscal year. With ongoing expansion projects and expected improvements in plant utilization, Epigral aims to strengthen its position in the specialty chemical business and create long-term value for stakeholders.

Investors and market observers will be watching closely to see if the anticipated volume growth and improved performance materialize in H2 FY26, as the company works towards completing its capacity expansion projects.