Bhageria Indust.

Bhageria Industries reported a strong financial performance for Q2 and H1 FY26. For Q2 FY26, total income stood at Rs. 206.02 crores, marking a 55.6% year-on-year growth (correcting a likely typo in the transcript which stated Rs. 26.02 crores). EBITDA for the quarter was Rs. 24.75 crores, up 47% YoY, leading to a net profit of Rs. 11.47 crores, an 80% increase YoY. The net margin for Q2 was 5.6%. For the first half of FY26, total income reached Rs. 369.99 crores, a 48% YoY increase, with EBITDA at Rs. 48.94 crores (up 48%) and net profit at Rs. 22.36 crores (up 83%), achieving a net margin of 6%.

The company is strategically diversifying its product portfolio and expanding capacity. It announced the commencement of commercial production for a new Plasticizers product line by December 2025, marking its entry into the polymer energy space. Concurrently, H-ACID capacity at the Tarapur facility is being expanded from 400 to 500 metric tons per month with an investment of Rs. 5 crores, expected to be completed within three months. This incremental H-ACID capacity is projected to generate an additional annual revenue of Rs. 50-75 crores.

Bhageria Industries is making significant strides in new product development. The Plasticizers line, which required approximately Rs. 10 crores in CAPEX by leveraging existing infrastructure, is anticipated to generate an annual revenue of Rs. 240 crores. For Ethoxylates, the company is currently studying product options and plans to commence production within the next 3-4 months, with a strong focus on the export market. These initiatives are aimed at shifting towards higher-margin, value-added Specialty segments, with Specialty Chemicals expected to grow from 5-7% to 20-22% of total revenue.

The pharmaceutical segment, which has already seen CAPEX of Rs. 30-35 crores, is focused on manufacturing Dexamethasone base and Dexamethasone Sodium Phosphate, with backward integration from 8DM. The company is targeting regulatory export markets and has filed for CEP (European Pharmacopoeia) for Dexamethasone base. Additionally, in the Vitamin section, they plan to file for US DMF in November and Japan DMF in December for Methylcobalamin. Management expects the pharma segment to break even in another two years, acknowledging the typical 4-5 year gestation period for this business.

Despite strong revenue growth, Q2 FY26 saw a decline in margins from 15-16% (two quarters prior) to 10%, primarily due to higher raw material prices influenced by global factors. Management indicated that pricing arrangements are on a monthly basis, allowing for pass-through of raw material cost fluctuations depending on market conditions. They expressed confidence in gradual margin improvement going forward^⏳, driven by a focus on higher-margin export segments and the cessation of dumping by Chinese competitors in recent years. However, they refrained from predicting a return to historical 17-20% EBITDA margins.

Bhageria Industries continues to emphasize sustainable and cost-effective operations, particularly through its renewable energy business. The company has a 32 MW solar project with an investment of Rs. 152 crores, projected to generate Rs. 22 crores in annual revenue with an equity IRR of approximately 16% and an EBITDA margin of 75-80%. Additionally, the company has installed a separate solar unit for its manufacturing facilities to enhance cost efficiency and manage waste water through its own spray dryer and a contract with Mumbai Waste Management.