Vidhi Specialty Food Ingredients Reports 16.3% EBITDA Growth Despite Revenue Decline in Q2 FY26

Vidhi Specialty Food Ingredients Limited , a leading manufacturer of synthetic food-grade colorants, reported a mixed financial performance for the second quarter of fiscal year 2026. Despite a 17.8% year-on-year decline in consolidated revenue to INR 75.00 crores, the company achieved significant improvements in profitability metrics.

Financial Highlights

Metric	Value	Change
Revenue	INR 75.00 crores	down 17.8% YoY
EBITDA	INR 17.70 crores	up 16.3% YoY
EBITDA Margin	23.60%	from 16.60% in Q2 FY25
PAT	INR 10.60 crores	up 2.3% YoY
PAT Margin	14.10%	from 11.30% in Q2 FY25

Key Developments

Margin Expansion: Despite revenue decline, Vidhi achieved substantial margin improvement through a shift towards higher-margin value-added products and operational efficiencies.
Dividend Declaration: The company announced a second interim dividend of INR 1.50 per share for FY26.
Capacity Utilization: The Dahej plant is currently operating at 65-70% capacity, with full utilization expected by the end of the fiscal year.
Product Mix Shift: High-value, high-margin products currently constitute around 15% of the product mix, with plans to increase this to 50% in the coming quarters.
Expansion Plans: Vidhi has acquired new land in Dahej GIDC and plans capex expansion across two facilities, with a total investment of approximately INR 100.00 crores.

Market Position and Future Outlook

Vidhi Specialty Food Ingredients holds a strong position in the global synthetic food color market, with an estimated 12% market share. The company is optimistic about future growth, citing several factors:

Increasing demand from non-food applications, including fertilizers, inks, and personal care products
Ongoing R&D efforts to develop high-margin products with gross margins exceeding 50%
Expansion into new geographic markets and deepening relationships with existing clients
Potential benefits from the Indian government's export promotion initiatives

Mr. Mihir Manek, Joint Managing Director, commented on the company's strategy: "We are continuously developing forward-integrated products which find wider application in certain higher categories of industries. These products require more complicated manufacturing and formulation processes, which we expect to commercialize over the next six to eight quarters."

The management remains confident about the company's growth prospects, expecting to see improvements in demand and profitability in the coming quarters. However, they also acknowledge the ongoing challenges in the global economic environment and the need for cautious expansion.

Investors and analysts will be closely watching Vidhi's performance in the coming quarters, particularly the ramp-up of its new facilities and the success of its high-margin product strategy.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.89%	+9.68%	+3.24%	-15.21%	-22.95%	+189.92%

Vidhi Specialty Food Ingredients Limited has announced its financial results for the second quarter ended September 30, 2025, revealing a mixed performance with decreased revenue but improved profitability margins.

Key Financial Highlights

Particulars (₹ in Crores)	Q2 FY26	Q2 FY25	YoY Change
Revenue from Operations	75.00	91.30	-17.85%
EBITDA	17.70	15.20	+16.45%
EBITDA Margin	23.60%	16.60%	+700 bps
Profit After Tax (PAT)	10.60	10.30	+2.91%
PAT Margin	14.10%	11.30%	+280 bps

Revenue Decline

The company reported a consolidated revenue of ₹75.00 crores for Q2 FY26, down 17.85% year-on-year from ₹91.30 crores in the same quarter last year. This decline was primarily attributed to reduced intercompany transfer sales between Vidhi-Roha and Vidhi-Dahej facilities.

Improved Profitability

Despite the revenue drop, Vidhi Specialty Food Ingredients managed to improve its profitability:

EBITDA increased by 16.45% to ₹17.70 crores, with the EBITDA margin expanding significantly from 16.60% to 23.60%.
Profit after tax grew by 2.91% to ₹10.60 crores, with the PAT margin improving from 11.30% to 14.10%.

The company's management attributed the enhanced profitability to an improved portfolio mix.

Dividend Declaration

The Board of Directors has declared a second interim dividend of ₹1.50 per share (150%) for the financial year 2025-26, amounting to a total payout of ₹7.49 crores.

Operational Update

Vidhi Specialty Food Ingredients successfully commenced production at its Dahej SEZ plant in December 2023. This expansion has added 350 TPM capacity, bringing the company's total capacity to 675 TPM.

Market Position

The company maintains its position as Asia's largest food color manufacturer, with a presence in over 80 countries.

Future Outlook

While the company faces challenges in terms of revenue growth, the improved profitability and strategic capacity expansion suggest a focus on enhancing operational efficiency and market reach. The management's ability to improve margins despite lower sales indicates a robust business model capable of adapting to market dynamics.

Investors and stakeholders will likely monitor how Vidhi Specialty Food Ingredients leverages its expanded capacity and global presence to drive future growth, particularly in light of the current revenue headwinds.