News Earnings Laxmi Organic Industries Q3FY26 Results: Revenue Declines 7.9% Amid Market ChallengesLaxmi Organic Industries Q3FY26 Results: Revenue Declines 7.9% Amid Market Challenges
Laxmi Organic Industries faced significant headwinds in Q3FY26 with standalone revenue declining 7.9% to ₹7,068.72 million and net profit falling 28.7% to ₹198.31 million. The company's Essentials business was impacted by acetic acid price pressures while Specialties segment saw 30% revenue decline due to price moderation and product phaseouts. Despite challenges, management highlighted progress on Dahej expansion projects and early signs of feedstock price recovery, with Phase 2 completion expected by Q4FY26.
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Laxmi Organic Industries Limited has released its unaudited financial results for the third quarter and nine months ended December 31, 2025, revealing a challenging operational environment with declining revenues and profitability metrics. The company also conducted an investor conference call on January 30, 2026, providing detailed insights into market conditions and strategic initiatives.
Financial Performance Overview
The company's standalone financial performance for Q3FY26 showed notable declines across key metrics compared to the previous year:
| Metric: | Q3FY26 | Q3FY25 | Change (%) |
|---|---|---|---|
| Revenue from Operations: | ₹7,068.72 million | ₹7,678.72 million | -7.9% |
| Total Income: | ₹7,100.46 million | ₹7,734.80 million | -8.2% |
| Net Profit After Tax: | ₹198.31 million | ₹278.15 million | -28.7% |
| Basic EPS: | ₹0.71 | ₹1.01 | -29.7% |
The consolidated results showed a similar trend, with revenue from operations declining to ₹7,186.82 million from ₹7,863.35 million in Q3FY25, representing an 8.6% decrease. EBITDA for the quarter stood at nearly ₹50 crores, down 33% compared to the previous year.
Nine-Month Performance Analysis
For the nine-month period ended December 31, 2025, the company's performance reflected sustained pressure:
| Parameter: | 9M FY26 | 9M FY25 | Variance |
|---|---|---|---|
| Standalone Revenue: | ₹20,852.01 million | ₹22,303.34 million | -6.5% |
| Standalone Net Profit: | ₹567.38 million | ₹895.46 million | -36.6% |
| Consolidated Revenue: | ₹21,113.57 million | ₹22,757.55 million | -7.2% |
| Consolidated Net Profit: | ₹578.11 million | ₹917.45 million | -37.0% |
Market Challenges and Business Segment Performance
During the earnings call, Managing Director and CEO Dr. Rajan Venkatesh highlighted that the global chemical industry continues to face challenges with ongoing cost optimization efforts, shutdowns, and supply chain restructuring. The company's Essentials business saw revenue decline by 6% while maintaining volumes, primarily due to acetic acid feedstock price impacts. The Specialties segment experienced a more significant 30% revenue decline attributed to price moderation (12%), absence of one-time campaign products from the previous year (5-6%), and the phaseout of agrochemical intermediates (10%).
Significant Operational Developments
The company implemented several important changes during the reporting period. A key development was the change in depreciation method from written down value to straight line method, resulting in lower depreciation expenses. Under the previous method, depreciation for Q3FY26 would have been higher by ₹288.97 million.
Additionally, Laxmi Organic reversed accrued liabilities of ₹407.27 million related to wheeling losses, wheeling charges, transmission losses and transmission charges levied by Maharashtra State Electricity Distribution Company Limited, based on a favorable order from MERC.
Project Updates and Strategic Initiatives
| Development: | Status/Details |
|---|---|
| Dahej Phase 1: | Already operational and supplying customers |
| Dahej Phase 2: | On track for completion by end of Q4FY26 |
| Lote Facility: | Fluorochemicals operations on track, targeting ₹70-80 crores revenue |
| Total Dahej Capex: | ₹710 crores with 65% dedicated to Specialties |
The Dahej facility represents the company's largest capex investment, with Phase 1 already online and Phase 2 focusing on diketene, ketene, and downstream derivatives expected to complete mechanical work by quarter-end. The company anticipates FY27 as the first year of qualification and ramp-up, with accelerated growth in FY28.
Corporate Governance and Regulatory Updates
The Board approved the re-appointment of Dr. Rajiv Banavali as an Independent Director for a second term from May 18, 2026, to May 17, 2028. The company exercised the option under Section 115BBA of the Income Tax Act to compute income tax at 25.17%, resulting in a deferred tax liability reversal of ₹97.18 million. Following new Labour Codes notification, the company recognized ₹38.02 million toward increased gratuity liability and compensated absences.
Market Outlook and Recovery Signals
Management noted early signs of improvement in key feedstock pricing, particularly acetic acid, which had declined over 20% in the past two years but recently rebounded from $320-330 levels to $360-380 range. The company expects ethyl acetate spreads to improve from the previous pain point of $90-100 to approximately $130 range. Demand signals from packaging, inks and adhesives remained stable, while agrochemicals showed moderate demand and pharmaceuticals remained stable.
Source: Earnings call transcript and financial results
Historical Stock Returns for Laxmi Organic Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.50% | -6.00% | -4.53% | -37.87% | -29.41% | -19.53% |
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