Apcotex Industries Limited — Q4 FY26 earnings call

Call held 14 May 2026

Management summary

Apcotex Industries delivered a strong Q4 FY26, with operating revenue growing 14% to INR 398 crores and PAT surging 107% to INR 35 crores, driven by higher volumes and improved margins. The full fiscal year FY26 also marked record sales and export volumes, alongside significant EBITDA and PAT growth. The company addressed one-time accounting adjustments related to employee benefits, asset impairment, and depreciation, while proactively managing raw material volatility due to geopolitical events.

Highlights

  • Operating revenue for Q4 FY26 stood at INR 398 crores, registering a growth of 14% year-on-year, supported by higher volumes and continued pricing discipline.

  • Operating EBITDA for Q4 FY26 was INR 55 crores, up 42% year-on-year, with EBITDA margins improving to 13.76% due to higher volumes, better realizations, and enhanced operational efficiency.

  • Profit after tax for Q4 FY26 stood at INR 35 crores, reflecting a strong growth of 107% year-on-year, with PAT margins at 8.73%.

  • For FY26, the company delivered a strong performance, achieving record high sales volumes, up 14% year-on-year, and highest ever export volumes, also growing at 14% year-on-year.

  • Apcotex maintained a strong liquidity position, remaining net cash positive with cash and investments exceeding borrowings by approximately INR 70 crores, and net debt-to-equity improved to 0.08.

Concerns

  • Employee benefit expenses in Q4 FY26 included approximately INR 14 crores for long-term incentive plans, pending litigations, and gratuity policy changes, which were one-off in nature.

  • An impairment loss of about INR 4 crores was recognized for a turbine and related accessories at the Valia facility.

  • Revised useful life for certain plant and machinery resulted in additional depreciation of about INR 2 crore during Q4 FY26.

  • The ongoing West Asia crisis led to heightened volatility in raw material prices and some moderation in export demand across select markets.

Key financials

2 periods

Q4 FY26

  • Operating Revenue
    ₹398 Cr
    YoY +14%
  • Operating EBITDA
    ₹55 Cr
    YoY +42%
  • EBITDA Margin
    13.8%
  • PAT
    ₹35 Cr
    YoY +107%
  • PAT Margin
    8.7%

FY26

  • Operating Revenue
    ₹1,442 Cr
    YoY +4%
  • Operating EBITDA
    ₹177 Cr
    YoY +42%
  • EBITDA Margin
    12.3%
  • PAT
    ₹101 Cr
    YoY +88%
  • PAT Margin
    7%
  • Sales Volumes
    —
    YoY +14%
  • Export Volumes
    —
    YoY +14%
  • Net Debt-to-Equity
    0.08

What they filed

Q1 FY27: revenue up 39.9%, net profit up 315.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue351 355 349 376 337 −4%331 −7%398 +14%526 +40%
EBITDA27 27 38 39 41 +52%44 +63%55 +45%117 +200%
Net profit11 12 17 19 25 +127%22 +83%35 +106%79 +316%
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 ₹20 Cr
    • Strategic growth and capacity expansion (general)
    • NBR capacity doubling
    • Synthetic latex new capacity
    • New R&D center infrastructure ₹20 Cr
    We also continue to execute our ongoing CapEx projects with rigor and discipline aimed at supporting strategic growth and capacity expansion. (Page 3); continue the expansion project for NBR, which will almost double our NBR capacity by next year. (Page 8); For synthetic latex, we are building new capacity again, which will come up in the following financial year. (Page 8); we are building a new R&D center this year for which we have got approval from the board and we are going to spend somewhere between INR 20 crores to INR 25 crores (Page 19)
  • Debt Gross ₹90 Cr · Net cash ₹70 Cr
    Company has maintained a strong liquidity position during the year and remained net cash positive with cash and investments exceeding borrowings by approximately INR 70 crores. Our net debt-to-equity also improved to 0.08. (Page 4); As of March 31st, we have a total debt of about INR 90 crores. And our investments and cash bank balances are INR 160-odd crores. (Page 14); So, we are positive by about INR 70 crores or INR 80 crores. (Page 14)
  • Dividend ₹5.5/share (final)
    Lastly, the Board has announced a final dividend of Rs. 5.50 per equity share, which is subject to shareholders' approval. This takes the total dividend for FY '26 to Rs. 8 per equity share, including the interim dividend which was declared earlier. (Page 4)
  • Liquidity Cash ₹160 Cr Net cash positive with cash and investments exceeding borrowings by approximately INR 70 crores.
    Company has maintained a strong liquidity position during the year and remained net cash positive with cash and investments exceeding borrowings by approximately INR 70 crores. (Page 4); And our investments and cash bank balances are INR 160-odd crores. (Page 14)

Guidance & targets

Capacity

  • Nitrile Latex Capacity Utilization Capacity · going forward, next 4 quarters · High confidence full 100% capacity utilization
    We are running at almost full 100% capacity utilization now for Nitrile latex. And at least going forward, we expect to run at full 100% capacity utilization.

    — Abhiraj Choksey

  • NBR Capacity Expansion Capacity · next year · High confidence almost double our NBR capacity
    continue the expansion project for NBR, which will almost double our NBR capacity by next year.

    — Abhiraj Choksey

  • Synthetic Latex New Capacity Commissioning Capacity · following financial year · High confidence new capacity
    For synthetic latex, we are building new capacity again, which will come up in the following financial year.

    — Abhiraj Choksey

Profitability

  • EBITDA Margins Profitability · at least for this coming year · Medium confidence better than the average of last year
    strategically, as we are at a higher capacity utilization levels, we expect margins to be better than the average of last year, at least for this coming year.

    — Abhiraj Choksey

Volume

  • ApcoBuild Growth Volume · will continue to grow · Medium confidence double digits
    we feel fairly confident that we will continue to grow at double digits

    — Abhiraj Choksey

  • Overall Volume Growth Volume · for the whole year · Medium confidence low double-digits
    grow by another in double-digits, low double-digits in volume for the whole year.

    — Abhiraj Choksey

Capex

  • R&D Center Investment Capex · this year · High confidence INR 20-25 crores
    we are building a new R&D center this year for which we have got approval from the board and we are going to spend somewhere between INR 20 crores to INR 25 crores

    — Abhiraj Choksey

Revenue

  • Nitrile Latex Revenue Contribution Revenue · Medium confidence 15% to 20%
    Overall percentage revenue of Nitrile latex will be probably, I am guessing, 15% to 20%.

    — Abhiraj Choksey

What to watch in Q1 FY27

Nitrile Latex Margin Expansion

Next four quarters
Current Short-term margins improved due to war situation
Target Continued margin expansion, moving towards structural improvement

Why it matters

Nitrile Latex is a key segment, and its margin trajectory (structural vs. temporary) will impact overall profitability.

Nitrile latex for Q4, we were at almost full capacity utilization. So, that will continue to be at full capacity utilization, but there we hope margin expansion will be there over the next four quarters.

Risks & concerns

  • Geopolitical volatility (West Asia crisis) impacting raw material prices and export demand

    high

    The West Asia crisis led to heightened volatility in raw material prices and some moderation in export demand, with the Strait of Hormuz still closed.

    Management acknowledged

  • Potential for demand destruction due to high energy and petrochemical prices

    medium

    Management expressed uncertainty about the long-term impact of high energy and petrochemical prices on demand.

    Management acknowledged

  • Margin compression from a sharp drop in raw material prices

    medium

    A sudden fall in raw material prices could lead to lower margins for a quarter or a few months due to existing high-cost inventory.

    Management acknowledged

  • Increased competition in export markets from Chinese players

    medium

    Higher costs for Apcotex due to raw material sourcing shifts are making products less competitive against Chinese latex in markets like Egypt and Turkey.

    Management acknowledged

Q&A highlights

7 direct
One-time employee benefit expenses and depreciation policy changes Direct
For one was a new policy on long-term incentives for certain senior management employees that we have just introduced in the last quarter. It is to be paid out over a period of five years, so that provision has been made... The second reason is there are some pending litigations... The third thing was some changes in gratuity policy... The second question on the depreciation, actually, this is a co-gen power plant that we had invested in a few years ago... the depreciation was taken over 40 years, has been reduced to 15 years.

Clarifies the nature and one-off impact of significant accounting adjustments (INR 14 crores employee benefits, INR 4 crores impairment, INR 2 crores additional depreciation) that affected Q4 financials.

Asked by Aditya Khetan

Nitrile Latex capacity utilization and oversupply situation Direct
We are running at almost full 100% capacity utilization now for Nitrile latex. And at least going forward, we expect to run at full 100% capacity utilization... from a margin standpoint, short-term margins are certainly improved right now because of the war situation, and some of our competitors have not been able to consistently supply material to our customers.

Provides an update on the key Nitrile Latex segment, confirming full capacity utilization and explaining recent margin improvements as partly temporary due to geopolitical factors.

Asked by Aditya Khetan

Sustainability of Q4 EBITDA margins and future progression Partial
Difficult to say, given the current war situation. But look, I would say strategically, as we are at a higher capacity utilization levels, we expect margins to be better than the average of last year, at least for this coming year.

Analysts sought clarity on whether the strong Q4 EBITDA margin (13.76%) is a new base, but management indicated volatility and only provided directional guidance for the full year.

Asked by Ankit Minocha

Status of Anti-Dumping Duties (ADD) and its impact on FY27 planning Direct
Unfortunately, the Finance Ministry... did not notify the anti-dumping duties that were recommended by the DGTR... we have not built that into our plans. We continue to expand and we continue the expansion project for NBR, which will almost double our NBR capacity by next year.

Confirms that the hoped-for ADD has not been implemented, impacting competitive landscape, but the company is proceeding with its NBR expansion plans regardless.

Asked by Ankit Minocha

Impact of geopolitical scenario (Middle East conflict) on raw material supply and future outlook Direct
One is that are available in India... Then second set of raw materials that we were importing from the Middle East, from Saudi, Kuwait, that were affected immediately... Fortunately, we have been able to run our plant without one, even one day of shutdown because we were able to take some bold calls in early March. We covered... a lot of the materials so that we could keep the plants running in March and April as soon as the materials stopped from the Middle East.

Details the company's proactive measures to manage raw material supply chain disruptions due to the Middle East conflict and its current inventory position.

Asked by Mehul Panjwani

Structural vs. temporary nature of current margin expansion Direct
I think, look, if you see, Jan and Feb were fairly stable months, right? The tariffs were gone. There were no major wars. So, I think Jan and Feb for us were very good months. Sure, in the month of March, we were better placed than some of our competitors. We took some really good decisions in the past that paid off. So, there might be some amount of, as you would say, cyclicality or temporary benefits that would have come.

Management clarifies that while some recent margin gains are temporary due to market conditions (war, competitor issues), underlying operational improvements also contributed.

Asked by Sajal Kapoor

R&D approach and strategy for value-driven transformation Direct
we are building a new R&D center this year for which we have got approval from the board and we are going to spend somewhere between INR 20 crores to INR 25 crores... where not only in our current industry segments, but even in different types of polymers, we will be doing new research, new molecules.

Highlights the company's long-term strategy to move up the value chain through significant investment in a new R&D center and focus on specialized products and new molecules.

Asked by Sajal Kapoor

Export business sustainability and impact of Middle East situation Direct
Look, we built a large chunk of our export business is exports to UAE, Kuwait, Saudi, Egypt, Turkey, those whole areas. So, while Egypt and Turkey are not affected by the war, but freight rates have gone up. Our cost of certain raw materials that we were getting from the Middle East are now coming from China... customers in Egypt and Turkey that are running are getting competitive products now because our costs have gone up significantly, maybe, compared to some of our Chinese competitors.

Details the challenges faced by the export business due to increased freight costs, shift in raw material sourcing, and competitive pressure in key markets like Egypt and Turkey.

Asked by Mehul Panjwani

3 min read 6 chapters

Detailed narrative

Strong Q4 and FY26 Financial Performance

Apcotex Industries reported a robust Q4 FY26, with operating revenue growing 14% year-on-year to INR 398 crores, driven by higher volumes and pricing discipline. Operating EBITDA surged 42% to INR 55 crores, expanding margins to 13.76%. Profit after tax (PAT) saw an impressive 107% increase to INR 35 crores, achieving a PAT margin of 8.73%. For the full fiscal year 2026, the company achieved record sales volumes, up 14% year-on-year, and highest-ever export volumes, also growing 14%, contributing to an operating revenue of INR 1,442 crores and PAT of INR 101 crores.

One-Time Accounting Adjustments Impacting Q4

The company recognized several one-time accounting adjustments in Q4 FY26. Employee benefit expenses included approximately INR 14 crores for a new long-term incentive plan, pending litigations, and gratuity policy changes. An impairment loss of about INR 4 crores was recorded for a turbine at the Valia facility, and a revision in the useful life of certain plant and machinery led to an additional INR 2 crore in depreciation. Management clarified these were mostly one-off in nature and not expected to recur, aiming to clean up pending issues by year-end.

Nitrile Latex Segment Performance and Outlook

The Nitrile Latex segment operated at almost full 100% capacity utilization in Q4 FY26 and is expected to maintain this level going forward. Margin expansion in this segment contributed significantly to the strong quarter, partly due to the geopolitical situation limiting competitors' supply. While the segment structurally remains challenging, management expects margins to improve over the next four quarters, with the segment contributing an estimated 15-20% of the total top line. The company plans to continue running at full capacity utilization.

Raw Material Sourcing and Geopolitical Impact

The ongoing West Asia crisis and the closure of the Strait of Hormuz created significant volatility in raw material prices and supply chains. Apcotex proactively secured key raw materials, enabling uninterrupted operations in March and April, despite challenges in sourcing from the Middle East. While some raw materials are now coming from China at higher prices, the company has managed to avoid production shutdowns. This situation, however, poses an ongoing concern for costs and competitiveness, especially in export markets.

Capital Allocation and Expansion Plans

Apcotex maintained a strong net cash positive position, with cash and investments exceeding borrowings by approximately INR 70 crores, and a net debt-to-equity ratio of 0.08. The company announced a final dividend of Rs. 5.50 per share, bringing the total FY26 dividend to Rs. 8 per share. Strategic CapEx projects are underway, including plans to almost double NBR capacity by next year and build new synthetic latex capacity for FY28. Additionally, INR 20-25 crores is allocated for a new R&D center in FY27 to drive value-added product development and new molecule research.

Export Market Challenges and R&D Focus

The export business, particularly to the Middle East, UAE, Kuwait, Saudi, Egypt, and Turkey, faced challenges due to increased freight rates and competitive pressure from Chinese latex in markets like Egypt and Turkey. Management acknowledged that while some benefits from the war situation were temporary, the company is investing in R&D to develop specialized products and new molecules. This includes building a new R&D center to move up the specialty value chain and reduce reliance on commoditized products, aiming for long-term growth and differentiation.

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