Epigral Limited has received an assessment order and demand notice from the Deputy Commissioner of Income Tax, Vadodara, amounting to ₹52.52 crores including applicable interest. The company disclosed this development through a regulatory filing under SEBI Listing Regulations on January 1, 2026.

Assessment Order Details

The income tax assessment pertains to Assessment Year 2022-23 for Financial Year 2021-22. The company received the order on December 31, 2025, which was passed under specific provisions of the Income-tax Act, 1961.

Company's Response and Position

Epigral Limited has stated that the assessment order is part of ordinary course assessment proceedings. The company maintains it has adequate factual and legal grounds to reasonably and technically substantiate its position in the matter.

The key aspects of the company's stance include:

• The consequent demand is not maintainable according to the company
• No financial impact expected on financials, operations, or other activities
• Process initiated to file rectification application and appeal within prescribed timelines

Financial Impact Assessment

According to the company's disclosure, there is no anticipated financial impact on the company's financials, operations, or other activities due to this assessment order. Epigral believes it has strong grounds to challenge the demand and expects to resolve the matter through proper legal channels.

Next Steps

The company is proceeding with filing both a rectification application and an appeal against the assessment order within the prescribed timelines as per income tax regulations. This approach indicates the company's confidence in its position and commitment to pursuing all available legal remedies to contest the demand.

Epigral Limited , a leading chemical manufacturer, reported a 4% decline in revenue to Rs 589.00 crore for the second quarter of fiscal year 2026, despite a 2% growth in sales volume. The company's performance was impacted by reduced price realizations across key product categories, including CPVC, hydrogen peroxide, and caustic soda.

Financial Highlights

Key Factors Affecting Performance

The company's performance in Q2 FY26 was influenced by several factors:

1. Extended Monsoon: An early and prolonged monsoon season affected demand across various sectors.
2. Price Realizations: Reduced realizations in CPVC, hydrogen peroxide, and caustic soda products impacted revenue.
3. Plant Maintenance: Ongoing maintenance work at the plant affected overall production.

Product-wise Performance

• CPVC: Prices dropped by approximately 10% quarter-on-quarter, with current prices around Rs 100.00-105.00 per kg.
• Hydrogen Peroxide: Experienced a decline in price realizations.
• Caustic Soda: Witnessed a price drop of around 10%.

Capacity Utilization and Future Outlook

• CPVC capacity utilization stands at about 50%.
• The company expects volume growth in H2 FY26, positioning the second half for stronger performance compared to H1.
• Early signs of demand recovery are visible with the conclusion of the monsoon and completion of plant maintenance activities.

Ongoing Projects and Expansion Plans

Epigral's management reported that their CAPEX projects are progressing as per schedule:

1. CPVC Capacity: Doubling of capacity
2. Epichlorohydrin Capacity: Expansion underway
3. Renewable Energy: 19.8 Megawatt wind-solar hybrid power plant

These projects are expected to be commissioned within the announced timeline and budget, strengthening the company's diversification strategy.

Chlorotoluene Value Chain

• The Chlorotoluene plant, commissioned in March 2025, is expected to contribute significantly to the P&L from FY 2027 onwards.
• The company is targeting 8-9 products in the first phase, focusing on current customer base and market scenarios.
• Sizable revenue contribution from this segment is expected from Q4 FY26 or Q1 FY27.

Management Commentary

Mr. Maulik Patel, Chairman and Managing Director, stated, "Despite headwinds, Market outlook suggests that the chemical industry is poised to deliver better performance in the second half of the year compared to the first half, supported by improving demand fundamentals and the gradual recovery across key sectors."

Future Outlook

1. The company expects CPVC prices to improve from Q4 FY26 onwards, considering the current situation as a bottom-out scenario.
2. Epigral is working on new chemistry projects, targeting products with double-digit growth potential for the next 10-15 years, particularly in the construction and infrastructure segments.
3. The management anticipates announcing new CAPEX plans within the current fiscal year, focusing on import substitution and high-growth areas.

Epigral Limited remains focused on scalable, profitable growth, strengthening integration, and driving value for all stakeholders through capacity expansion and capability enhancement.