20 Microns — Q4 FY26 earnings call

Call held 26 May 2026

Management summary

20 Microns reported a resilient FY26, with full-year revenue crossing ₹953 crores and PAT nearly tripling over five years. Q4 FY26 saw strong revenue recovery (14.8% YoY) and PAT growth (16.6% YoY), supported by operational efficiencies and lower finance costs. The company is strategically transitioning towards specialty materials, backed by a ₹100 crore CapEx plan, while navigating demand softness and cost pressures.

Highlights

  • Full year FY26 revenue crossed ₹953 crores despite slow quarters.

  • Q4 FY26 revenue grew 14.8% YoY, driven by recovery in paint and polymer rubber demands.

  • Full year FY26 EBITDA reached ₹123 crores, demonstrating a 12-13% CAGR over five years.

  • Full year FY26 PAT was ₹67 crores, nearly tripling over five years with a 14% CAGR.

  • Operating cash flows increased sharply to ₹103.6 crores, improving funding capability.

  • Net equity ratio improved significantly to 0.1x from 0.4x in FY26, indicating lower leverage.

  • Current ratio strengthened to 1.9, reflecting healthy liquidity.

Concerns

  • Restrained demand conditions in key user industries like paints and coatings.

  • Impact of prolonged monsoon and geopolitical uncertainties on performance.

  • Stock corrected 26% in the last one year.

  • Facing issues with gas and fuel costs, and supply chain disturbances leading to increased freight and raw material costs.

Key financials

2 periods

Q4 FY26

  • Revenue Growth
    14.8%

FY26

  • Revenue
    ₹953 Cr
  • EBITDA
    ₹123 Cr
  • EBITDA Margin
    12.9%
  • PAT
    ₹67 Cr
  • RoCE
    16.4%
  • Operating Cash Flow
    ₹103.6 Cr

What they filed

Q1 FY27: revenue down 0.8%, net profit up 5.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue240 215 227 247 231 −4%215 +0%261 +15%245 −1%
EBITDA31 26 29 32 32 +3%28 +8%32 +10%32 +0%
Net profit16 13 15 17 17 +6%15 +15%18 +20%18 +6%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹100 Cr Domestic CapEx from internal approvals; Malaysian entity CapEx with 30% debt (70% equity, 30% debt)
    • Capacity expansion, mining and infrastructure sustainability, R&D in Al processes
    • Malaysian operations ₹40 Cr
    About the 100 crore CapEx plan announced by the company should be viewed as a strategic growth accelerator rather than capacity expansion. ... The distribution of the CapEx would have 40% of allocation towards Malaysian operations. ... for our domestic plans, the CapEx would be in form of the internal approvals, whereas for Malaysian entity, we are planning to have a ratio around 70 to 30, that is 30% debt.
  • Debt Debt disclosed
    leverage has reduced significantly operating cash flows have strengthened materially and the company is creating a strong platform for the next growth cycle. ... The net equity ratio remained to 0.1 X from 0.4 X in FY26. Strong cash generation improves funding capability for the future CapEx as well as the lower leverage reduction reduce financial risk and finance cost burden. The company also enters the next growth phase with a cleaner balance sheet.
  • M&A Doffner Joint venture · Integrated

    Already contributing to the overall picture.

    So Doffner is already you know it is a different kind of a JV setup which we have already initiated and that is already contributing to the overall picture.
  • M&A Sievert Building Materials Private Limited Joint venture · Pending regulatory

    First phase established, second phase expected in next few months. Meaningful outcome by end of FY27.

    The Sievert operations which is a new operation which has already been established in its first phase in the past few months. The second phase will go live probably in the next few months. ... And overall, if you look at this JV, the real outcome would be you can see it possibly by the end of the financial year because that's when both the phases would be stabilized enough and the recognition in the market would continue to come in.
  • M&A Malaysian Limestone Acquisition Acquisition · Pending regulatory

    Mines started operating, plant construction will take minimum 12 months. Operations expected to show light in early next financial year.

    For the Malaysian operation, the mines have already been, you know started operating and currently we are in that scenario of you know, organizing the mine in a proper way and followed with the construction of the plant, which will be a minimum of, you know, 12 months. So within the next 12 months we will be you know, commissioning the plant and post that we are expecting that the operations would start. So anywhere in the early next financial year is when we are expecting the operation operations to show some light.
  • Liquidity Liquidity disclosed Operating cash flows increased sharply to ₹103.6 crores, and the current ratio improved to 1.9, indicating healthy liquidity.
    Operating cash flows increased sharply to 103.6 CR. ... The current ratio has strengthened the indicating healthy liquidity. The current ratio improved to 1.9.

Guidance & targets

Revenue

  • Revenue CAGR Growth Revenue · next 3 years · Medium confidence 18%
    considering the next three-year plan with the CapEx, around 18% of revenue CAGR growth

    — Mr. Nihad Baluch

  • New Products Contribution to Revenue Revenue · annually · Medium confidence 4 to 5%
    So about 4 to 5% is what the contribution usually comes in from the new products

    — Mr. Atil Parikh

  • Crossing ₹1000 Crore Revenue Revenue · FY27 (second-half) · Medium confidence ₹1000 crore
    if things improve in the next, in the next month or two months, then definitely in the second-half, we'll see the growth that we anticipate to you know, cross the thousand crore benchmark and milestone hopefully in this financial year.

    — Mr. Atil Parikh

Profitability

  • EBITDA Margin Expansion Profitability · next 3 years · Medium confidence 200 approx. BPS
    200 approx. BPS margin expansion

    — Mr. Nihad Baluch

  • RoCE Improvement Profitability · next 3 years · Medium confidence 18 to 20%
    ROCE improvement between 18 to 20%

    — Mr. Nihad Baluch

  • RoCE Profitability · by FY30 · Medium confidence around 20%
    whereas we are expecting Roce around 20% in case by FY30 if the things in the projects are timely being delivered.

    — Mr. Nihad Baluch

Working Capital

  • Net Working Capital Utilization Working Capital · FY27 · High confidence same as FY26
    So to the extent of FY26 will remain the same in terms of net working capital utilization.

    — Mr. Nihad Baluch

What to watch in Q1 FY27

Malaysian Operations Commercialization

Early next financial year (FY27)
Current Plant under construction, mines operating
Target Commercial operations begin

Why it matters

This is a key international expansion project with significant CapEx allocation (40% of ₹100 crore), crucial for future growth and diversification.

anywhere in the early next financial year is when we are expecting the operation operations to show some light.

Risks & concerns

  • Cost Pressures and Supply Chain Disturbances

    high

    Facing issues with gas/fuel hikes, foreign exchange fluctuations, freight cost increases, and raw material cost increases, leading to a 'bundled effect' of cost pressures and supply chain disturbances.

    Management acknowledged

  • Uncertainty in Future Guidance

    high

    Management finds it very difficult to predict future performance (e.g., FY27 PAT) due to current market situations and their unknown duration.

    Management acknowledged

  • Restrained Demand Conditions

    medium

    Demand conditions in key user industries like paints and coatings remain restrained.

    Management acknowledged

  • Geopolitical Uncertainties and Monsoon Impact

    medium

    Prolonged monsoon impact and geopolitical uncertainties continue to affect the business environment.

    Management acknowledged

  • Market Volatility and Stock Correction

    low

    The stock has corrected 26% in the last one year, and demand is currently weaker.

    Management acknowledged

Q&A highlights

7 direct
Funding for 100 crore CapEx Direct
for our domestic plans, the CapEx would be in form of the internal approvals, whereas for Malaysian entity, we are planning to have a ratio around 70 to 30, that is 30% debt.

Clarifies the funding strategy for the announced CapEx, differentiating between domestic and international projects.

Asked by Amit Mehandale

Drivers for Q4 FY26 Revenue Recovery Direct
Basically since January of 2026, we saw an upward trend in terms of the demand coming back in variety of industries that we are catering to and post that In February also we saw a stable uptrend in terms of the demand. And with the war situation, many people try to you know build up on the capacity so that based upon the raw materials that they were already holding and that kind of led to an upscale demand for the entire quarter.

Explains the reasons behind the strong Q4 revenue growth, attributing it to market recovery and strategic inventory management.

Raw Material Sourcing from Own Mines Direct
approximately about 30% of our total raw material requirement comes from the mines and 70% comes from external sources.

Provides insight into the company's backward integration and reliance on external sourcing for raw materials.

Asked by Manish Gupta

New Product Introduction and Future Contribution Direct
If you see we launch about 35 to 40 different products yearly basis by our R&D which works well on you know the latest trends which are running in the markets and for the industries that we cater. ... So in the next three to four years, we expect that within these industries a lot of new customers will be approached will be, you know converted for using these kind of products.

Highlights the company's R&D focus and pipeline of new, high-value products expected to drive future growth and customer acquisition.

Asked by Janish Shah

Impact of Fuel Gas Shortage on Production Partial
Well, it's not affecting production as of now. We definitely are facing a lot of issues in terms of the gas or the fuels that we use currently. But our teams are efficient enough managing those tough situations with balanced approach in terms of the hikes and the fuels cost which are happening currently and the availability which is there by having multiple sources of available resources that are there with the team of ours.

Addresses a potential operational risk, indicating current mitigation strategies but acknowledging ongoing cost pressures.

Asked by Prashant Kale

Contribution of Strategic Initiatives (JV, Malaysian Acquisition) Direct
Doffner is already you know it is a different kind of a JV setup which we have already initiated and that is already contributing to the overall picture. The Sievert operations which is a new operation which has already been established in its first phase in the past few months. The second phase will go live probably in the next few months. ... For the Malaysian operation, the mines have already been, you know started operating and currently we are in that scenario of you know, organizing the mine in a proper way and followed with the construction of the plant, which will be a minimum of, you know, 12 months. ... So anywhere in the early next financial year is when we are expecting the operation operations to show some light.

Provides timelines for when recent strategic investments and acquisitions are expected to contribute meaningfully to earnings.

Asked by Kunal Bhatia

Demand Environment and Future Growth Drivers Direct
I think in the near term we are expecting the demands to be you know very volatile and but our all our plans and in terms of our inventories that we are managing are based on that are to take care of the spikes as well as the downside of any demands which come in. But when we look at an industry specific case scenario, then I think apart from paints, if you're looking at then plastics and rubber and you know inks and construction chemicals is something that we are quite robust on for this financial year and the coming years as well because we're developing a lot of new products for these applications and we look forward to it, you know, growing our market share in these applications as well.

Outlines management's view on demand volatility and identifies key non-paint segments (plastics, rubber, inks, construction chemicals) as future growth drivers.

Asked by Kunal Bhatia

Automation Plans for Margin Improvement Direct
There are a lot of automation plans which are already you know in place. Many of our older processes which we were following traditionally in you know, our production facilities. With the CapEx that we are you know have incurred in the last two years and with the future CapEx that we are expecting in terms of the new age milling processes that we will be following which goes which takes care of a reduction in the power costs. ... Also, there are many functions where we have identified automation in the next 3 years where we will be taking them up as a part of the CapEx plan upgradations for our existing plants.

Details the company's strategy to improve operational efficiencies and reduce costs through automation and renewable energy initiatives over the next few years.

Asked by Janisha

2 min read 7 chapters

Detailed narrative

FY26 Performance and Strategic Transition

20 Microns reported a resilient Financial Year 2026, with full-year revenue crossing ₹953 crores and PAT almost tripling over the last five years to ₹67 crores. The company is undergoing a strategic transition from an industrial mineral player to a diversified specialty material and functional additive platform. This shift is supported by deep expertise in mechanization, technology, and mineral processing, aiming for higher value-added products and improved operating efficiencies.

Q4 FY26 Financial Highlights

The fourth quarter of FY26 demonstrated strong recovery, with revenue growth of 14.8% year-over-year and a sequential growth of 21.5%. EBITDA for the quarter grew 9.6% YoY to ₹31.8 crores, maintaining a stable margin of approximately 12%. PAT increased by 16.6% YoY and 17.6%, primarily driven by lower finance costs and operational efficiencies, leading to an EPS of 4.98.

Capital Expenditure Plans and Funding Strategy

The company has announced a ₹100 crore CapEx plan, which is viewed as a strategic growth accelerator rather than mere capacity expansion. Approximately 40% of this allocation is earmarked for Malaysian operations. For domestic CapEx, funding will primarily come from internal approvals, while the Malaysian entity's CapEx will be financed with a 70:30 equity-to-debt ratio, meaning 30% debt.

New Product Development and Market Diversification

20 Microns' dedicated R&D center launches 35-40 new products annually, catering to market trends. Recent introductions include delaminated kaolins for the rubber industry, anti-blocking agents for petrochemicals, specialized calcium carbonates for oral care, and products for the cosmetic industry. These new products are expected to attract new customers and contribute 4-5% to revenue annually, driving market share growth in segments like plastics, rubber, inks, and construction chemicals.

Strategic Initiatives and International Expansion Timelines

The Doffner joint venture is already contributing to the company's performance. The Sievert operations, a new JV, have established their first phase, with the second phase expected in the next few months, aiming for meaningful contribution by the end of FY27. For Malaysian operations, mines have started, and plant construction will take a minimum of 12 months, with operations expected to commence in early next financial year.

Operational Efficiency and Cost Management

The company is actively implementing automation plans, including new age milling processes and renewable energy initiatives (solar, hybrid, wind), to reduce power costs and improve operational efficiencies. While facing challenges from rising fuel, freight, and raw material costs, management is employing a balanced approach with multiple sourcing options and passing on cost increases to customers over time.

Financial Health and Future Outlook

20 Microns maintains a healthy balance sheet, with operating cash flows sharply increasing to ₹103.6 crores and the net equity ratio improving to 0.1x from 0.4x in FY26. The current ratio stands at 1.9. Management anticipates an 18% revenue CAGR and 200 bps margin expansion over the next three years, with RoCE improving to 18-20%. They aspire to be debt-free in the long term and expect to cross ₹1000 crore revenue in H2 FY27, provided economic conditions remain stable.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Metals & Mining earnings calls