Accent Microcell — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

Accent Microcell's Q1 FY26 earnings call focused heavily on future growth and capacity expansion rather than current quarter financials. The company projects a 15-20% CAGR over the next 3-5 years and an improved weighted average EBITDA margin of 20-22% with the commissioning of Unit 3 Phase 1 (Oct/Nov 2025) and Phase 2 (July 2026). A new multinational customer for microsterized cellulose was announced, signaling strong future demand. Concerns include low profitability in the domestic market and increased debtor days.

Highlights

  • Company-level CAGR target of 15-20% for the next 3-5 years, driven by new capacities and product mix.

  • Weighted average EBITDA margin projected to improve to 20-22% with the introduction of premium products from Unit 3.

  • Unit 3 Phase 1, focusing on premium excipient products (2,400 MTPA), is on track for commissioning by October/November 2025.

  • A significant new multinational customer has been secured for microsterized cellulose, expected to contribute substantial volumes in the coming years.

  • The recent incident at a competitor's plant (Sigachi) has led to increased inquiries and business for Accent Microcell, particularly in oral pharma.

Concerns

  • Domestic market segment for FY25 showed low profitability, with approximately ₹2 crores profit on ₹120 crores revenue (2% margin).

  • Debtor days have increased over the last two years, attributed to targeting Indian MNCs with more liberal payment terms.

  • Management was evasive regarding the timeline for related party transactions (RPT) to reach zero, stating it would be 'very, very optimistic'.

Key financials

  1. Revenue ₹265 Cr
  2. EBITDA Margin 16%
  3. Domestic Revenue ₹120 Cr
  4. Domestic Profit ₹2 Cr
  5. Export Turnover 61%

What they filed

Q1 FY27: revenue down 4.6%, net profit down 60.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue126 5,972 139 6,087 139 +10%6,483 +9%210 +51%5,808 −5%
EBITDA19 1,116 23 778 24 +26%700 −37%33 +43%457 −41%
Net profit16 1,092 17 375 18 +13%404 −63%26 +53%147 −61%
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 ₹105 Cr
    • Total Capex for Unit 3 (Phase 1 & 2), excluding land ₹105 Cr
    • Capex for Unit 3 Phase 2, excluding land ₹55 Cr
    so, I can share you the say, rough idea about the total capex for entire unit 3 as of now, that is phase 1 phase 2, except the land portion, I think. It will be around say, it will be anywhere between 105 to 110 cr. ... Sir, I hope you are referring to Capex, or phase 2. Yes. Phase 2. Correct. Yes, sir, it is around 55 to 60 crore, except the value of land.
  • Debt Debt disclosed
    Okay? And my next question is that I can see that your debt is almost negligible... ...nominal amount of debt can be thought of.

Guidance & targets

Growth

  • Company Level CAGR Growth · next 3 to 5 years · High confidence 15-20%
    Just a moment, sir, at least say 15 to 20% CAGR for next 3 to 5 years. We are expecting.

    — Ghanshyam Patel

Margin

  • Weighted Average EBITDA Margin Margin · going ahead · High confidence 20-22%
    So if we talk about the weighted average margin, I think it at Emitter level, it should be around 20 to 22 percentage.

    — Ghanshyam Patel

  • Unit 3 Phase 1 (CCS) PAT Margin Margin · standalone basis · High confidence 25%
    So pay much is for the unit. 3 on a standalone basis can be assumed at 25%. That that what you are stating.

    — Ghanshyam Patel

Capacity

  • Current Capacity Capacity · current · High confidence 9,600 MTPA
    I mean, our current capacity is 9,200 metric tons per hour. Right? So it's around 9,600.

    — Ghanshyam Patel

  • Unit 3 Phase 1 Capacity Capacity · post commissioning · High confidence 2,400 MTPA
    phase one at 100% capacity utilization. It will be around 2,400 metric ton per annum

    — Ghanshyam Patel

  • Unit 3 Phase 2 Capacity Capacity · post commissioning · High confidence 12,000 MTPA
    phase 2 will be 12,000 metric ton

    — Ghanshyam Patel

  • Total Future Capacity Capacity · post Unit 3 Phase 2 · High confidence 24,000 MTPA
    Total will be 24,000 metric ton per annum.

    — Ghanshyam Patel

Commissioning

  • Unit 3 Phase 1 Commissioning Commissioning · Q3 FY26 · High confidence October/November 2025
    phase, one will be coming by what October 25. ... By say, quarter 3 of the current financial year. So anywhere between, say by the end of October or in the 1st couple of weeks of November.

    — Ghanshyam Patel

  • Unit 3 Phase 2 Commissioning Commissioning · Q2 FY27 · High confidence July 2026
    phase 2. To come on, come on, stream. ... Sir, we're expecting it to be in the month of say, July 2,026.

    — Ghanshyam Patel

Utilization

  • Unit 3 Phase 1 Utilization Utilization · 1st year · High confidence 60%
    from current fiscal given a full year capacity, we are expecting it to be utility level, to be around 60% for the 1st year.

    — Ghanshyam Patel

Product Mix

  • Unit 3 Phase 1 Product Mix (CCS) Product Mix · Phase 1 · High confidence 70%
    Say, around 70 percentage, we are going to concentrate on CCS and remaining 15% each for CMC and SSG.

    — Ghanshyam Patel

  • Unit 3 Phase 1 Product Mix (CMC) Product Mix · Phase 1 · High confidence 15%

    — Ghanshyam Patel

  • Unit 3 Phase 1 Product Mix (SSG) Product Mix · Phase 1 · High confidence 15%

    — Ghanshyam Patel

Export Mix

  • New Products Export Share Export Mix · going ahead · High confidence 70%
    So 70%, it will be export in the global market, and 30 will be domestic supply.

    — Ghanshyam Patel

Market context

  • Global MCC Market CAGR Growth · next couple of years · Medium confidence 6-7.5%
    Yes, sir, currently. if we talk about CAGR, so about 5 to 6% and upcoming times, at least for a couple of years, that would be. We are expecting to increase at least one to 1.5% more

    — Ghanshyam Patel

What to watch in Q2 FY26

Unit 3 Phase 1 Commissioning

next quarter
Current On track for Oct/Nov 2025
Target Commercial operations commenced

Why it matters

Successful commissioning of Phase 1 is crucial for introducing premium products and achieving targeted margins.

phase, one will be coming by what October 25. ... By say, quarter 3 of the current financial year. So anywhere between, say by the end of October or in the 1st couple of weeks of November.

Risks & concerns

  • Increased debtor days

    medium

    Debtor days have increased over the last two years due to targeting Indian MNCs with more liberal payment terms to gain competitive edge.

    Analyst acknowledged

  • Low profitability in domestic market

    medium

    Domestic market yielded only ~2% profit margin in FY25, but management views it as strategic for customer diversification and future expansion.

    Analyst acknowledged

  • Geopolitical tension and tariff noise impacting sourcing/sales

    low

    Management does not foresee negative impact on raw material sourcing from current territories or significant tariff issues for the pharma sector.

    Analyst downplayed

  • Dumping in MCC market

    low

    Analyst asked about the fear of dumping in MCC or premium products from other economies, but management did not confirm any such knowledge.

    Analyst not addressed

Q&A highlights

4 direct, 2 evasive
Impact of competitor's plant issue (Sigachi) on Accent Microcell Direct
If we look into the oral pharma and particular segment where we have been supplying the product range, so, of course is, there has been product. Inquiry has been increased, and we have been taking care of the business from our business side.

Analyst inquired about the impact of a competitor's plant issue, and management confirmed increased inquiries and business for Accent Microcell, indicating a positive market shift.

Asked by Hitesh mahida

Capacity to meet increased demand Direct
Yes, we have at present about, you can say for 4 to 5 months. We have business on hand, and that's why. Actually, we are also coming up with phase 2 for unit 3.

Analyst questioned if Accent has enough capacity for increased demand, and management confirmed sufficient business on hand and ongoing expansion plans.

Asked by Hitesh mahida

Duration for Sigachi plant to resume operations Evasive
We are not able to comment any kind of so it's as per company's policy. We are not able to comment on this thing.

Management declined to comment on a competitor's operational timeline, indicating sensitivity or lack of direct knowledge.

Asked by Hitesh mahida

Low profitability of domestic market segment Partial
It doesn't make a business sense just to say, identify few customers and to deal with them saying, say in abnormal percentage. So we have diversified the customer base, and accordingly taking into account for the expansion plan that what you are having that is, phase one and phase 2 that will substantially, that will cater to say, domestic market as well.

Analyst questioned the rationale behind serving a low-margin domestic market, and management explained it as a strategic decision for customer diversification and future expansion.

Asked by Daksh Jain

Purchase of immovable property from promoters Direct
Sir, it was adjacent to the piranha plant, so we thought it in the best interest of the company to procure it at say Armstead Price, and accordingly the immobile products were purchased.

Analyst questioned a related party transaction for property purchase, and management justified it based on strategic location and fair pricing.

Asked by Daksh Jain

Timeline for Related Party Transactions (RPT) to reach zero Evasive
No, in any case. About, when it comes to RPT stating it to be 0 will be very, very optimistic. So we'll prefer not to comment to it.

Management avoided giving a specific timeline for RPT reduction, suggesting it's a complex or long-term goal.

Asked by Tanay Desai

Comparison of margins with a recently listed peer Partial
Sir, generally, when it comes to PR Say, we don't think so. The player that you are stating can be termed as in PR for us. Say, when we say that in phase one, we are coming out with 3 new products. CCS, CMC and SSG, all are having 3 different profit levels, EBITDA levels margin levels and the pet levels.

Analyst asked about margin differences with a peer, and management explained their focus on different product mixes and profit levels for new offerings.

Asked by Himanshu Bisani

New multinational customer win Direct
we have just received the final confirmation about the business just to start up, and the product would be microsterized cellulose, and that would be renowned and well established multinational company globally. So that company we are going to supply in good amount of you can see multiple 1,000 turns we are going to in couple of next years' time.

Management announced a significant new customer win, which is a strong positive signal for future growth and product validation.

Asked by Siddharth Agarwal

3 min read 7 chapters

Detailed narrative

Forward-Looking Growth and Margin Outlook

Accent Microcell is targeting a robust 15-20% CAGR for the company over the next 3-5 years. This growth is expected to be supported by an improved product mix, leading to a weighted average EBITDA margin of 20-22% going forward, up from approximately 16% in FY25. The company anticipates a positive impact on MCC globally, with the market CAGR expected to increase by 1-1.5% from the current 5-6%.

Unit 3 Capacity Expansion and Product Strategy

The company's new Unit 3 is being developed in two phases. Phase 1, with a capacity of 2,400 MTPA for premium excipient products, is slated for commissioning by October/November 2025 and is expected to achieve 60% utilization in its first year. Phase 2, dedicated to MCC with a capacity of 12,000 MTPA, is targeted for commissioning by July 2026. The total future capacity across all units will be 24,000 MTPA, with 21,600 MTPA for MCC and 2,400 MTPA for premium excipients.

New Product Mix and Pricing

Unit 3 Phase 1 will focus on value-added products like CCS, CMC, and SSG, with CCS expected to comprise 70% of the mix, and CMC and SSG each 15%. The PAT margin for CCS on a standalone basis is projected at 25%. Premium products are expected to have a realization of approximately 3.5 times that of MCC, which currently sells at ₹230 per kg for exports and ₹180 per kg domestically.

Strategic Customer Acquisition and Market Dynamics

Accent Microcell has secured a significant new multinational customer for microsterized cellulose, with substantial volumes expected in the coming years. This win follows a 3-4 year approval exercise. The company also noted increased inquiries and business due to an unfortunate incident at a competitor's plant, particularly in the oral pharma segment. The global MCC market size is estimated at 250,000 metric tons, with India accounting for 50,000 metric tons.

Capital Expenditure and Funding

The total capital expenditure for Unit 3 (Phase 1 and Phase 2), excluding land, is estimated to be between ₹105-110 crores. Phase 2 alone accounts for approximately ₹55-60 crores. The company recently raised ₹40 crores through a rights issue, and management indicated that a nominal amount of debt could be considered for working capital requirements, though current debt levels are negligible.

Raw Material Sourcing and Supply Chain

Accent Microcell primarily imports 95% of its major raw materials from countries like the USA, South Africa, Sweden, and Indonesia. Ancillary products are sourced locally within India. Management does not anticipate any negative impact on sourcing due to geopolitical tensions, as their current import territories are stable.

Export Strategy and Debtor Days

The company's new products are expected to have a 70% export and 30% domestic supply mix. Current exports constitute around 61% of total turnover, with North and South America accounting for 55%, Europe 8-10%, Australia 5%, and Asia/Africa 30-35%. Debtor days have increased over the last two years, attributed to offering more liberal payment terms to Indian MNCs to gain a competitive edge in the domestic market.

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