Galaxy Surfactants , a leading manufacturer of surfactants and specialty chemicals, faced a challenging second quarter in fiscal year 2026, grappling with multiple headwinds that impacted its performance. The company reported flat consolidated volumes year-on-year, as it navigated through the effects of US tariffs on Indian exports and GST-driven inventory adjustments in the domestic market.

Key Highlights

• Consolidated volumes remained flat year-on-year and quarter-on-quarter
• Performance Surfactants segment experienced a high-single-digit decline
• Specialty Care products showed resilience with double-digit volume growth in non-US geographies
• H1 FY26 EBITDA declined by 5% to INR 251.00 crores
• EBITDA per metric ton for Q2 FY26 stood at INR 17,300.00

Impact of US Tariffs and Domestic Challenges

The imposition of a 50% tariff by the US government on exports from India significantly impacted Galaxy Surfactants' business. This not only affected existing operations but also led to delays in pipeline projects. The company is actively working on mitigating these effects by exploring options to shift some production to its Egypt facility and seeking customer approvals for the same.

In the domestic market, the recent rationalization of GST rates, while structurally positive, led to temporary headwinds. Many FMCG players adjusted their inventories, resulting in softer uptake and subdued volumes for Galaxy Surfactants during the quarter. The effects of these adjustments continued even during the festive season.

Segment Performance

The Performance Surfactants segment faced challenges, registering a high-single-digit decline. However, the Specialty Care products demonstrated resilience, achieving double-digit volume growth driven by non-US geographies. This growth in Specialty Care products helped partially offset the decline in Performance Surfactants.

Regional Performance

• India: Experienced flat volume performance year-on-year and quarter-on-quarter, with non-Tier 1 customer volumes growing robustly to compensate for Tier 1 volume decline.
• AMET (Africa, Middle East, Turkey): Recorded a modest single-digit volume decline quarter-on-quarter and a high-single-digit decline year-on-year, primarily due to market share erosion in Egypt.
• Rest of the World: Delivered mixed results, with Latin America and Asia Pacific maintaining strong growth trajectories, while North America saw a decline due to tariff impacts.

Raw Material and Supply Chain

The company continues to face challenges with elevated fatty alcohol prices, which have prompted some customers to consider reformulation options. However, there are early signs of potential easing in raw material prices, particularly in palm kernel oil.

Outlook and Strategy

Galaxy Surfactants remains cautious about the near-term outlook, acknowledging the muted environment reflecting global business challenges and margin pressures. The company expects the current headwinds to persist into Q3 FY26, with potential improvements anticipated from Q4 FY26 onwards.

To address these challenges, Galaxy Surfactants is:

1. Developing commercial capabilities for petrochemical-based surfactants to counter reformulation trends
2. Exploring opportunities to shift production to its Egypt facility to mitigate US tariff impacts
3. Focusing on expanding its presence in Latin America and Asia Pacific markets
4. Launching new products in the Sun Care range and Beauty segment to diversify its portfolio

While the company faces short-term turbulence, management remains confident in the long-term consumption story and is implementing strategic measures to ensure resilience and sustain market relevance.

Financial Performance

Galaxy Surfactants continues to navigate through a challenging business environment, focusing on strategic initiatives to mitigate short-term headwinds while positioning itself for long-term growth opportunities in the surfactants and specialty chemicals market.

Galaxy Surfactants , a prominent player in the surfactants industry, has recently executed a corporate guarantee to support its wholly owned subsidiary's performance obligations to a global customer. This strategic move, disclosed on October 14, 2025, underscores the company's commitment to fostering strong business relationships and ensuring smooth operations across its corporate structure.

Key Details of the Corporate Guarantee

The corporate guarantee, executed on October 13, 2025, is directly linked to a transaction previously disclosed by Galaxy Surfactants on March 5, 2025. While the specific financial terms of the guarantee remain undisclosed, the company has provided some crucial information:

Regulatory Compliance and Transparency

Galaxy Surfactants' disclosure aligns with the regulatory requirements set forth by the Securities and Exchange Board of India (SEBI). The company has adhered to Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, as well as the SEBI circular dated July 13, 2023.

Implications for Stakeholders

While the corporate guarantee demonstrates Galaxy Surfactants' confidence in its subsidiary's capabilities, it also introduces a potential financial risk. Shareholders and investors should note that the company may face financial outflows if the subsidiary fails to meet its performance obligations to the global customer.

Company Background

Galaxy Surfactants Limited, headquartered in Navi Mumbai, India, is a well-established entity in the surfactants industry. The company, with its registered office at C-49/2, TTC Industrial Area, Pawne, Navi Mumbai-400 703, operates under the CIN: L39877MH1986PLC039877.

This corporate action reflects Galaxy Surfactants' proactive approach to supporting its subsidiaries and maintaining strong relationships with global customers. As the situation develops, stakeholders will likely keep a close eye on the performance of the subsidiary and any potential financial implications for the parent company.