Black Rose Indus — Q4 FY25 earnings call

Call held 30 May 2025

Management summary

Black Rose Industries reported a strong FY25, with standalone revenue growing 20% and overall turnover increasing 21% to a record high. This performance was largely driven by the distribution business, which saw significant value and volume growth. The company also made progress on strategic initiatives, including the inauguration of a new R&D facility and advancing its polyacrylamide solid project towards commercialization, while exploring a new amine manufacturing facility through collaboration.

Highlights

  • Standalone revenue grew by 20% in FY25, driven by strong domestic sales.

  • Overall turnover for FY25 was the highest ever, increasing by 21% from the previous financial year.

  • EBITDA and PAT margins improved due to cost efficiency and product-mix optimization.

  • EPS grew by approximately 25% in FY25, reflecting strong operational performance.

  • Distribution segment achieved an impressive 29% growth in value and 10% in volume for FY25, contributing 70% to the top line.

  • New R&D facility was inaugurated, and the polyacrylamide solid project is on track for commercial production by end of FY26/start of FY27.

  • Feasibility study for an amine product manufacturing facility in collaboration with Koei Chemicals of Japan is underway.

  • Capex pipeline for polyacrylamide solid is estimated at ₹60-100 crores, with an additional ₹50 crores for the amine project and new land.

Key financials

  1. Standalone Revenue Growth 20%
  2. Overall Turnover Growth 21%
  3. EPS Growth 25%
  4. EBITDA Margin —
  5. PAT Margin —

What they filed

Q1 FY27: revenue up 48.3%, net profit up 150.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue93 88 82 60 84 −10%75 −15%104 +27%89 +48%
EBITDA7 8 9 6 7 +0%7 −12%13 +44%14 +133%
Net profit10 6 6 4 4 −60%4 −33%9 +50%10 +150%
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.

Segment breakdown

  • Distribution Business
    29% Value Growth10% Volume Growth70% Share of Top Line
  • Manufacturing Business
    dipped slightly qualitative Margin Trend

Capital allocation

high confidence
  • Capex Capex disclosed Internal accruals, debt, or fresh equity (options open)
    • Polyacrylamide solid project ₹60 Cr
    • Polyacrylamide solid project ₹100 Cr
    • Amine project and new land acquisition ₹50 Cr
    Like we mentioned, the total outlay going forward will be for the whole project is going to between 60 to 100 crores as a ballpark figure and only when the modalities and the details are finalized, we'll get to that stage of the exact fund requirement, and based on the situation, we will take a call on how to source this fund. Whether it is for internal approvals or from debt or raise of fresh equity. We have all the options open as of now. And at the opportune time we will take a definitive call and then definitely share that information.
  • Debt Debt disclosed
    The company at the same time has very minimal exposure in terms of the debt, showing a very minimal debt equity ratio with a strong financial structure in place in the company.
  • M&A Koei Chemicals of Japan Joint venture · Pending regulatory

    Feasibility study for setting up an amine product manufacturing facility.

    Regarding the EC application, we've also come out with a press briefing earlier this morning where we have mentioned that this is related to our feasibility study currently going on in collaboration with Koei Chemicals of Japan. Again, one of our principals from the distribution business where we are currently doing the feasibility for setting up an amine product manufacturing facility at our current site in Jhagadia.
  • Liquidity Liquidity disclosed Working capital remains stable despite growth, indicating good liquidity depth.
    The working capital remains stable in spite of the growth which shows the good liquidity depth in the company.

Guidance & targets

Capacity

  • Polyacrylamide Solid Commercial Production Capacity · FY26 end / FY27 start · Medium confidence by end of this fiscal and start of next
    The polyacrylamide solid project is running on schedule like we have mentioned in the previous briefings as well. We hope to move forward to the pilot stage very soon and start commercial production by the end of this fiscal and the start of the next.

    — Mr. Ambarish Daga

Capex

  • Polyacrylamide Solid Project Outlay Capex · Medium confidence 60 to 100 crores
    Like we mentioned, the total outlay going forward will be for the whole project is going to between 60 to 100 crores as a ballpark figure

    — Mr. Ambarish Daga

  • Amine Project & New Land Outlay Capex · Low confidence about 50 crores
    the pam solid is 60 to 100 crores and the other two things put together maybe in the range of about 50 crores or thereabouts.

    — Mr. Ambarish Daga

Revenue

  • Distribution Merchant Exports Volume Revenue · from Q2 FY26 onwards · Medium confidence good improvement and uptick
    However, we feel that once the tariff policy is clearer and people adapt to the evolving tariff structure from the second quarter onwards, we can expect good improvement and uptick in this volume moving forward to the next slide

    — Mr. Ambarish Daga

Sales

  • Acrylamide Powder Sales Sales · Medium confidence expected to grow
    The acrylamide powder sales are also expected to grow with the wide acceptance in the Indian domestic market and efforts to increase the export business for this product.

    — Mr. Ambarish Daga

Overall Performance

  • Company Performance Overall Performance · High confidence improve year on year
    we are quite positive that we will be able to, you know, improve our performance year on year.

    — Mr. Ambarish Daga

Market context

  • Distribution Local Sales Revenue · upcoming quarter · Medium confidence steady
    Here, we expect the local sales to remain steady in spite of the upcoming competition from the local manufacturers.

    — Mr. Ambarish Daga

What to watch in Q1 FY26

Polyacrylamide Solid Commercial Production

End of FY26 / Start of FY27
Current Pilot stage soon, plant building done
Target Commercial production started

Why it matters

Key new product commercialization, impacting future revenue and profitability.

The polyacrylamide solid project is running on schedule like we have mentioned in the previous briefings as well. We hope to move forward to the pilot stage very soon and start commercial production by the end of this fiscal and the start of the next.

Risks & concerns

  • Geopolitical uncertainty and US tariff policy

    medium

    Uncertainty around US tariff policy and the US-China trade war has subdued merchant exports, but the company is not negatively impacted and is diversifying.

    Management acknowledged

  • Raw material price volatility

    medium

    Chemical prices are volatile, but finished product realization remained stable despite a dip in acrylonitrile prices in Q4.

    Management acknowledged

  • Slowdown in Morbi tile industry

    medium

    The Morbi tile industry, a key market for polyacrylamide liquids, has been in a tough phase for 2-3 years, prompting R&D for alternative applications.

    Analyst acknowledged

  • Competition from local manufacturers

    low

    Upcoming competition is expected, but the company maintains its position as a supplier of choice due to reliability and fair pricing.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Location and purpose of R&D facility, new land, and EC approval Direct
The EC application is for the mines project like I mentioned. And that is going to be held set up at the Jhagadia site... The new land is in a different place. It's a new parcel of land which... is being registered and acquired with a view to setting up future and upcoming projects... The third regarding the R & D facility that is located separate from the plant. It is located in New Bombay and that is where most of our new technology development happens.

Clarifies the distinct locations and strategic purposes of the company's new infrastructure initiatives.

Asked by Mr. Damodar Baliga

Ownership model for R&D facility and new land Direct
All right, so the R & D facility is taken on lease as of now and the land we are registering for right now. We'll let you know the details.

Provides clarity on whether new assets are owned or leased, impacting capital structure.

Asked by Mr. Damodar Baliga

Feasibility study for amine project with Koei Chemical Company Partial
Currently, as I mentioned, the feasibility study is going on and once the feasibility comes out positive then the mode of collaboration can be discussed and only then finalized. Right now, I'm not in a position to answer the complete part of your question. But going forward, as and when things become more clear, I will be happy to share the information.

Highlights the ongoing nature of a significant potential collaboration and the phased disclosure of details, indicating future growth avenues.

Asked by Mr. Damodar Baliga

Timeline for amine project feasibility report Evasive
So, it's currently at an advanced stage but I cannot give a definitive timeline. Both parties are trying to, you know, work on it in a focused way and we hope to be able to give you more details very soon.

Indicates uncertainty or unwillingness to commit to a specific timeline for a key strategic project, which could impact investor expectations.

Asked by Mr. Damodar Baliga

CAPEX and timeline for polyacrylamide solid project Direct
The soft side is basically the process... that is already finalized and currently the work is going on in terms of the equipment side... As I mentioned we are completing one stage and soon going to progress to the next stage... In terms of CAPEX, we mentioned this also that you know, the plant building has already been done. So that is one part of the CAPEX and time-consuming part which is already in place.

Confirms progress on the polyacrylamide solid project, clarifies CAPEX components, and reiterates the timeline for commercialization.

Asked by Mr. Damodar Baliga

Funding requirements for polyacrylamide solid CAPEX Direct
I have not mentioned, you know, that no money will be required or no investment will be required because the plant building is only one part of the investment. There are of course, you know, other areas of investment like plant and machinery, equipment and so on, so forth... we will take a call on how to source this fund. Whether it is for internal approvals or from debt or raise of fresh equity. We have all the options open as of now.

Clarifies that significant CAPEX is still needed for the project and outlines the flexible funding strategy, indicating potential future capital raising.

Asked by Mr. Damodar Baliga

Diversification of polyacrylamide liquid applications beyond Morbi Direct
Our R & D team is also working on, you know, introducing other products for different applications. Like you mentioned textiles and so on and so forth. The development work is going on and once we are ready then we are going to have a definite go-to-market strategy for these and at the right opportune time we will definitely share that kind of thing. We are working on all possibilities for this.

Demonstrates management's proactive approach to market challenges and R&D efforts to broaden product applications and reduce dependency on specific industries.

Asked by Mr. Damodar Baliga

Impact of US tariffs on exports and potential Chinese dumping Direct
our distribution, merchant export volume has been going to the U.S. Oil and gas market... But we are currently, you know, not impacted negatively or due to any of these tariff initiatives... we are well prepared to deal with that. We are diversifying our market outreach; we are adding new products to our portfolio.

Addresses concerns about geopolitical trade tensions and outlines the company's strategy to mitigate risks through market and product diversification.

Asked by Mr. Damodar Baliga

2 min read 7 chapters

Detailed narrative

FY25 Financial Performance Highlights

Black Rose Industries reported a robust financial year 2025, with standalone revenue growing by 20% due to strong domestic sales. The company achieved its highest-ever turnover, marking a 21% increase from the previous financial year. This strong performance was complemented by improved EBITDA and PAT margins, attributed to effective cost efficiency initiatives and product-mix optimization. Consequently, EPS saw a growth of approximately 25% for the year.

Distribution Segment Drives Growth

The distribution segment was a primary growth driver in FY25, closing the year with an impressive 29% growth in value and 10% in volume. This segment continues to be a significant contributor, accounting for about 70% of the company's total top line. While domestic sales remained strong, merchant exports faced some challenges in Q4 due to uncertainties surrounding US tariff policies, though management expects improvement from Q2 FY26 onwards.

Manufacturing Business and Product Portfolio

In the manufacturing division, the company produces acrylamide liquid (32,000 MTPA capacity), polyacrylamide liquids (40,000 MTPA capacity, with new binder BRILBIND CE03 launched), acrylamide solid (3,600 MTPA capacity), and n-methylol acrylamide (NMA, 2,000 MTPA capacity). Acrylamide solid sales have increased manifold due to rationalized import pricing from China, and NMA serves as an import substitute. Margins in the manufacturing business dipped slightly during the year.

Raw Material Stability and Pricing Strategy

The price of acrylonitrile, a key raw material, remained range-bound between $1100-1350 during FY25, with a sudden dip observed in March. Despite this, the company maintained stable finished product realization and prices. Management emphasized its disciplined pricing strategy and focus on long-term customer relationships, aiming to be a reliable supplier amidst market volatility.

Strategic Initiatives and New Projects

Black Rose Industries inaugurated a new R&D facility, which is expected to drive future innovations and new product development. The polyacrylamide solid project is progressing on schedule, with plant building already complete, and commercial production anticipated by the end of FY26 or early FY27. Additionally, a feasibility study is underway for an amine product manufacturing facility in collaboration with Koei Chemicals of Japan, a long-standing principal.

Capital Expenditure and Funding Outlook

The company has outlined a significant capex pipeline, with the polyacrylamide solid project estimated to cost between ₹60-100 crores. An additional ₹50 crores is earmarked for the amine project (subject to feasibility) and new land acquisition. Management stated that funding options, including internal accruals, debt, or fresh equity, are all open and a definitive call will be made once project modalities are finalized.

Market Diversification and Export Focus

Acknowledging the prolonged slowdown in the Morbi tile industry, a key market for polyacrylamide liquid, the company is proactively exploring alternative applications in sectors like textiles through R&D. Efforts are also being made to increase export business for acrylamide powder. Improved logistics and reduced freight costs are helping the company re-enter previously unviable export markets, contributing to diversified market outreach.

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