Kiri Industries Limited (KIL), a leading manufacturer of dyes and intermediates, has released its financial results for the second quarter of fiscal year 2026, showcasing resilience in a challenging market environment while advancing its strategic diversification into copper smelting and fertilizer production.

Q2 FY26 Financial Highlights

KIL reported consolidated revenue of Rs. 213.44 crore for Q2 FY26, marking a 6% sequential growth and a 23% year-over-year increase. The company's standalone revenue stood at Rs. 194.62 crore, up 8% quarter-on-quarter and 34% year-over-year.

The company's EBITDA for the quarter was impacted by significant non-recurring legal and professional costs associated with the ongoing DyStar matter, resulting in a negative EBITDA of Rs. 13.05 crore.

Operational Performance

Despite global macroeconomic uncertainties and input-cost fluctuations, Kiri Industries maintained operational discipline and strategic focus. The company optimized its product mix in the specialty chemicals segment and implemented cost-rationalization measures.

The segment contribution mix for Q2 FY26 reflects an increasing share from Dyes Intermediates and Basic Chemicals:

DyStar Case Update

The company provided an update on the DyStar case, noting that the purchaser failed to fulfill conditions precedent for the transaction by the extended long-stop date of November 3, 2025. The receiver has further extended the long-stop date to December 1, 2025, subject to an additional deposit payment.

Strategic Expansion: Copper and Fertilizer Integration

Kiri Industries is advancing its diversification strategy through its subsidiary, Indo Asia Copper Limited (IACL). The company is developing an integrated copper smelter and fertilizer complex in Jafrabad, Gujarat, with the following key features:

1. Copper Project:

   • 5 Lakh TPA copper smelter
   • Products: Copper cathodes, wire rods, tubes, and precious metals

2. Fertilizer Project:

   • Utilizes sulphuric acid by-product from copper smelting
   • Products: Phosphoric acid, DAP, and various NPK fertilizers

The project, with an estimated cost of Rs. 10,661 crore, is progressing steadily:

• Land acquisition partially completed
• Environmental clearances obtained
• Basic engineering completed; detailed engineering in progress
• Key machinery orders placed
• Construction phase initiated

This strategic expansion aligns with India's self-reliance agenda and positions Kiri Industries to capture growth opportunities in both the copper and fertilizer sectors.

Outlook

Manish Kiri, Managing Director of Kiri Industries, commented on the results: "Despite temporary headwinds, our core business remains resilient. We are excited about the progress in our copper and fertilizer project, which represents a significant step in our diversification strategy. This expansion will not only create new revenue streams but also contribute to India's self-reliance in critical sectors."

Kiri Industries remains focused on disciplined execution, strategic diversification, and long-term value creation, guided by principles of resilience, responsibility, and sustainable growth.

Note: This article contains forward-looking statements based on current expectations and projections. Actual results may differ materially from those anticipated.

Kiri Industries Limited (KIL), a leading player in the dyes and dye-intermediates industry, has reported a mixed set of financial results for the second quarter of fiscal year 2026 (Q2 FY26). The company demonstrated strong revenue growth but faced challenges in profitability, largely due to ongoing legal expenses and input cost pressures.

Revenue Growth Amid Industry Recovery

KIL reported consolidated revenue of Rs. 213.44 crore for Q2 FY26, marking a 6.00% sequential increase and a robust 23.00% year-on-year growth. This performance underscores the company's strong market positioning and the gradual recovery in the dyes and dye-intermediates sector. The standalone revenue stood at Rs. 194.62 crore, up 8.00% quarter-on-quarter and 34.00% year-on-year, driven by volume growth in dyes intermediates and basic chemicals segments.

Profitability Challenges

Despite the revenue growth, KIL faced significant profitability headwinds:

• Consolidated EBITDA for Q2 FY26 was negative at Rs. 13.05 crore, compared to a positive EBITDA of Rs. 18.56 crore in the previous quarter.
• On a standalone basis, the company reported an EBITDA loss of Rs. 9.92 crore, down from a profit of Rs. 17.35 crore in Q1 FY26.
• The EBITDA margin declined to -6.10% on a consolidated basis and -5.10% on a standalone basis.

Factors Impacting Profitability

1. Legal Expenses: The company's profitability was significantly impacted by non-recurring legal and professional costs associated with the ongoing DyStar matter.
2. Input Cost Pressures: Rising raw material costs continued to squeeze margins, with the material margin percentage declining year-on-year from 34.80% to 26.40%.
3. Currency Fluctuations: The company reported other comprehensive expenses of Rs. 47.19 crore, primarily due to currency translation adjustments from foreign subsidiaries.

Joint Venture and Associate Performance

• Lonsen Kiri Chemical Industries Limited, KIL's joint venture, maintained healthy operational performance, contributing Rs. 16.98 crore to the consolidated results.
• The share of profit from associates included a significant Rs. 82.13 crore contribution from DyStar, although this does not impact overall profitability due to the ongoing en bloc sale process.

DyStar Case Update

The company provided an update on the DyStar case:

• The purchaser failed to fulfill conditions precedent for the transaction by the extended deadline of November 3, 2025.
• The receiver has further extended the deadline to December 1, 2025, subject to an additional deposit of USD 5,112,156 into the escrow account.

Copper & Fertilizer Project Progress

KIL's diversification into the copper and fertilizer sector through its subsidiary, Indo Asia Copper Limited (IACL), is progressing:

• The project aims to establish a 5 Lakh TPA copper smelter and an integrated fertilizer plant in Gujarat.
• Key milestones achieved include partial land acquisition, environmental clearances, and initiation of the physical execution phase.
• The project is designed to meet India's growing demand for refined copper and fertilizers, with a focus on environmental sustainability.

Management Commentary

Manish Kiri, Managing Director of Kiri Industries Limited, stated, "Despite the challenging macroeconomic environment and temporary cost pressures, we are encouraged by our strong revenue growth and market positioning. Our focus remains on operational excellence, strategic diversification, and long-term value creation for all stakeholders."

Outlook

While Kiri Industries faces near-term profitability challenges, the company's revenue growth and strategic initiatives in the copper and fertilizer sectors position it for potential long-term growth. The resolution of the DyStar case and the successful execution of the IACL project will be key factors to watch in the coming quarters.

Investors and stakeholders will be closely monitoring the company's ability to improve margins, manage legal expenses, and capitalize on the recovering demand in the dyes and dye-intermediates industry.