Rain Industries Limited , a global leader in carbon and advanced materials production, recently held a management Q&A session to discuss its performance for the second quarter and first half. The company highlighted its strategic initiatives and operational challenges across its diverse business segments.

Alternative Raw Materials Strategy

Rain Industries is actively implementing alternative raw materials across its Carbon and Advanced Materials segments. In the Carbon segment, the company is focusing on diversifying its Green Petroleum Coke (GPC) sourcing and developing innovative logistics solutions to improve efficiency and cost-effectiveness in raw material transportation.

Gerard Sweeney, President of Rain Carbon Inc., emphasized, "By optimizing logistics and expanding our sourcing network, RAIN will be able to reduce the cost of raw material blends while enhancing supply chain flexibility."

The company's Advanced Materials segment has made significant progress in using bio-based raw materials, particularly in its NOVARES resins portfolio. The Duisburg, Germany resins plant has achieved ISCC-plus certification, reflecting the company's commitment to sustainability.

Operational Performance

Rain Industries reported the following capacity utilization levels:

The company is actively working on increasing utilization in the Carbon segment and exploring new market opportunities in the Advanced Materials segment.

Market Challenges and Opportunities

The distillation business faces challenges stemming from the Russia-Ukraine conflict, including energy price increases and reduced coal tar availability in Europe. However, Rain Industries is countering these challenges by increasing the use of alternative raw materials and focusing on cost control to re-establish margins.

In the calcination business, Chinese CPC prices surged early in the year due to reduced refinery output but retreated by quarter-end, remaining 100-150 USD per ton above earlier levels. The company expects to begin generating revenue from Indian Carbon distillation activities in late 2026.

Financial Overview

Rain Industries' gross debt stands at approximately one billion USD with a 9% average interest rate. The company anticipates a working capital release over the next two quarters, which should result in a reduction in gross debt by around 10%.

Srinivasa Rao, Chief Financial Officer, noted, "We expect that CAPEX will be below the typical spending levels as part of our cost-saving initiatives and in response to increased cash requirements to support working capital needs."

Regulatory Compliance and Future Outlook

New emission standards for petroleum coke calciners in India have taken effect, with a compliance deadline of December 2025. Rain Industries is well-positioned to meet these standards and continues to evaluate opportunities for expansion in the cement sector.

Jagan Reddy Nellore, Managing Director of Rain Industries Limited, stated, "We are actively evaluating opportunities to expand our presence in the cement sector. These expansion plans are currently under strategic review and will be formally announced in the upcoming quarters."

As Rain Industries navigates through market challenges and regulatory changes, its focus on alternative raw materials, operational efficiency, and strategic expansion positions the company for potential growth in the coming years.

Rain Industries , a leading global producer of carbon-based and advanced materials, has reported a significant turnaround in its financial performance for the first quarter. The company posted a consolidated net profit of ₹607.00 million, marking a substantial improvement from a loss of ₹779.00 million in the same period last year.

Revenue Growth and Improved Profitability

The company's revenue grew to ₹44.00 billion in Q1, compared to ₹40.90 billion in the corresponding quarter of the previous year, representing a 7.6% increase. This growth was primarily driven by stronger performance in the Carbon segment, which saw an 11% increase in sales volumes.

EBITDA Expansion

Rain Industries' EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) showed remarkable improvement, increasing to ₹6.30 billion from ₹3.70 billion year-over-year. The EBITDA margin expanded significantly to 14.30% from 9.02% in the previous year, indicating enhanced operational efficiency.

Segment Performance

Carbon Segment

The Carbon segment, which is the company's largest business unit, reported revenue of ₹31.91 billion, a 14.2% increase compared to the same quarter last year. The segment's adjusted EBITDA rose by 35.2% to ₹5.20 billion, driven by increased volumes and improved margins.

Advanced Materials Segment

The Advanced Materials segment faced some headwinds, with revenue decreasing to ₹8.18 billion from ₹9.40 billion in the same quarter last year. However, the segment's adjusted EBITDA showed a significant improvement, increasing by 317% compared to the previous quarter.

Cement Segment

The Cement segment reported a modest 1.6% increase in revenue, reaching ₹3.26 billion. The segment's adjusted EBITDA improved substantially to ₹249.00 million, up from ₹37.00 million in the same quarter last year, due to improved realizations and lower operational costs.

Strategic Initiatives and Outlook

Jagan Mohan Reddy Nellore, Managing Director of Rain Industries Limited, commented on the results: "After a prolonged period of underperformance driven by global market headwinds, we are beginning to see signs of recovery. We have made meaningful progress in improving our performance, and the first quarter marks a step forward in terms of earnings."

The company is focusing on several strategic initiatives, including:

1. Developing next-generation energy storage technologies at its North American demonstration facility.
2. Expanding the use of alternative raw materials to mitigate supply chain disruptions.
3. Investigating the application of biocarbon materials in its carbon-based product portfolio.
4. Setting up a new Coal Tar Pitch (CTP) remelting unit in India to target graphite, battery, and aluminum markets in the region.

Financial Position

As of June 30, Rain Industries reported a gross debt of $1,044.00 million, including working capital debt of $225.00 million. The company's net debt stood at $853.00 million, with a net debt to EBITDA ratio of 4.2x.

While the company acknowledges that market conditions remain volatile, management is cautiously optimistic about the future. Rain Industries continues to focus on driving sustained earnings improvement, supported by disciplined execution and strategic investments.

In conclusion, Rain Industries' Q1 results demonstrate a strong turnaround in profitability and operational performance, positioning the company for potential growth in the coming quarters.