Bhageria Industries Limited — Q2 FY26 earnings call

Call held 28 Oct 2025

Management summary

Bhageria Industries reported robust financial performance in Q2 and H1 FY26, marked by significant revenue and profit growth. The company is strategically expanding into higher-margin specialty chemicals with new Plasticizer production and H-ACID capacity expansion. While facing margin pressure in the dye intermediate segment from raw material costs, management anticipates overall margin improvement and is focused on export markets and new product development, including in the pharmaceutical sector.

Highlights

  • Total income for Q2 FY26 grew 55.6% YoY to ₹205.99 crores (calculated) from ₹132.41 crores in Q2 FY25.

  • EBITDA for Q2 FY26 increased 47% to ₹24.75 crores.

  • Net profit for Q2 FY26 rose 80% YoY to ₹11.47 crores, with net margin improving to 5.6% from 4.8% last year.

  • H1 FY26 total income was ₹369.99 crores, up 48% YoY, and net profit grew 83% to ₹22.36 crores with a 6% net margin.

  • Commencement of commercial production for Plasticizers by December 2025, expected to generate ₹240 crores annual revenue from a ₹10 crore CAPEX.

Concerns

  • Margins in the dye intermediate segment declined from 15-16% to 10% in Q2 FY26 due to higher raw material prices.

  • The pharmaceutical segment is expected to break even in another two years, indicating a longer gestation period.

  • Management could not provide a specific timeline for reaching historical 17-20% EBITDA margins.

Key financials

2 periods

Q2 FY26

  • Total Income
    ₹205.99 Cr
    YoY +55.6%
  • EBITDA
    ₹24.75 Cr
    YoY +47%
  • Net Profit
    ₹11.47 Cr
    YoY +80%
  • Net Margin
    5.6%

H1 FY26

  • Total Income
    ₹369.99 Cr
    YoY +48%
  • Net Profit
    ₹22.36 Cr
    YoY +83%

What they filed

Q1 FY27: revenue up 79.7%, net profit up 200.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue129 172 184 158 205 +59%242 +41%267 +45%284 +80%
EBITDA14 28 31 18 24 +71%20 −29%31 +0%40 +122%
Net profit7 13 17 12 12 +71%12 −8%14 −18%36 +200%
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

medium confidence
  • Capex Capex disclosed
    • H-ACID capacity expansion (400 to 500 MT/month) ₹5 Cr
    • Plasticizer plant ₹10 Cr
    • Pharma segment (already done) ₹30 Cr
    • 32 MW Solar project ₹152 Cr
    H-ACID: "investment of around Rs. 5 crores" (Page 4); Plasticizer: "It is approximately Rs. 10 Cr, which has been done already." (Page 14); Pharma: "which is around Rs. 30-Rs. 35 Cr, which has already been done." (Page 14); Solar: "we are investing Rs. 152 crores." (Page 9)

Guidance & targets

Revenue

  • Chemical segment annual revenue Revenue · FY26 · Medium confidence ₹725-775 crores
    It would be between 725 and 775.

    — Management

  • H-ACID capacity expansion additional annual revenue Revenue · once fully operational · Medium confidence ₹50-75 crores
    the incremental capacity is expected to generate Rs. 50-Rs. 75 crores additional annual revenue at present price, once fully operational.

    — Suresh Bhageria

  • Plasticizer segment annual revenue Revenue · per annum · High confidence ₹240 crores
    Around Rs. 240 Cr per annum.

    — Rahul Bhageria

Margins

  • Dye intermediate segment margin improvement Margins · going forward · Medium confidence 2-3%
    It is about 2%-3% which will increase. Yes.

    — Management

  • Pharma segment gross margins Margins · in regulatory market · Medium confidence 30-60%
    So 30%-60% kind of gross margins? Yes.

    — Management

Capacity

  • H-ACID capacity expansion Capacity · within the next 3 months · High confidence 500 metric tons per month

    From 400 metric tons per month today

    expanding our H-ACID capacity from 400 metric tons per month to 500 metric tons per month at Tarapur with an investment of around Rs. 5 crores scheduled for completion within the next 3 months.

    — Suresh Bhageria

  • Plasticizer capacity Capacity · High confidence 2000 tons per month
    It is pretty early, but the capacity will be 2000 tons per month

    — Management

Timeline

  • H-ACID capacity expansion online Timeline · January end · High confidence January end
    By January end, we should start it.

    — Management

  • Plasticizer commercial production Timeline · December 2025 · High confidence by the end of December 25
    the company announced the commencement of commercial production of a new product line, Plasticizers by the end of December 25

    — Suresh Bhageria

  • Pharma segment break-even Timeline · next 2 years · Medium confidence in another next 2 years
    We intend to break even in another next 2 years.

    — Management

  • Ethoxylates production start Timeline · next 3-4 months · Medium confidence in the next 3-4 months
    Ethoxylates, we are studying it and in the next 3-4 months, we will choose the products and then we will start the production for that.

    — Management

  • US DMF filing for Methylcobalamin Timeline · November · High confidence November
    Like in November, we are going with the US DMF.

    — Rahul Bhageria

  • Japan DMF filing for Methylcobalamin Timeline · December · High confidence December
    And by December, we will be filing the Japan DMF for Methylcobalamin.

    — Rahul Bhageria

Solar Project

  • PPA rate Solar Project · High confidence ₹3.08
    3.08 is the PPA

    — Management

  • Annual revenue from solar project Solar Project · per annum · High confidence ₹22 crores
    and the revenue would be Rs. 22 crores per annum.

    — Management

  • Equity IRR Solar Project · High confidence 16%
    The IRR is approximately 16%, the equity IRR.

    — Management

  • EBITDA margin Solar Project · High confidence 75-80%
    And sir, we can expect a 75%-80% EBITDA margin on this, right? Yes.

    — Management

What to watch in Q3 FY26

H-ACID capacity expansion commissioning

January end (Q4 FY26)
Current Under expansion
Target Online and contributing revenue

Why it matters

This expansion is expected to add ₹50-75 crores in annual revenue, significantly impacting future top-line growth.

By January end, we should start it.

Risks & concerns

  • Higher raw material prices

    medium

    Higher raw material prices led to margin shrinkage in the dye intermediate segment from 15-16% to 10%.

    Management acknowledged

  • Long gestation period for pharma segment

    medium

    The pharma business typically takes 4-5 years for gestation, with break-even expected in another two years.

    Management acknowledged

  • China dumping in the past

    low

    China was dumping products in the last 2-3 years, impacting the industry, but has now stopped.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Revenue growth and margin decline in dye intermediate segment Direct
The revenue came from the chemical sector, whereas the margins have shrunk because of the higher raw material prices due to the impact of the US and other European countries. The margins have shrunk actually.

Addresses the key financial trend of strong revenue growth but declining margins, attributing it to raw material costs and external factors.

Asked by Madhur Rathi

Volume growth in Q2 FY26 Direct
So is it fair to assume that our numbers would be on 30%-35% volume growth? Definitely, yes.

Confirms that a significant portion of the revenue growth is driven by volume, indicating healthy demand for products.

Asked by Madhur Rathi

Pharma segment break-even and gross margins Partial
We intend to break even in another next 2 years. Our idea is to sell to regulatory market where the margins are very good. So 30%-60% kind of gross margins? Yes.

Provides a timeline for profitability in the new pharma segment and clarifies the expected high gross margin potential in regulatory markets.

Asked by Madhur Rathi

Plasticizer segment CAPEX and revenue potential Direct
It is approximately Rs. 10 Cr, which has been done already. Around Rs. 240 Cr per annum.

Quantifies the relatively low CAPEX for the new Plasticizer segment and its significant annual revenue potential, highlighting efficient asset utilization.

Asked by Surabhi

H-ACID capacity expansion timeline Direct
Has the work started in front or when can we expect it online? By January end, we should start it.

Gives a clear timeline for the commissioning of the H-ACID capacity expansion, which is expected to boost revenue.

Asked by Dhanraj Tolani

Competition threat from China Direct
So are we facing any issue or any competition threat from them? No one. We don't have any threat from China, at least for now.

Addresses a common sector-specific risk, with management indicating no current threat from Chinese competition.

Asked by Dhanraj Tolani

Sulphuric Acid backward integration and consumption Direct
And sir, what percentage of our Sulphuric Acid requirement would be catered by our plant versus whatever we buy from outside? We sell about 70% of our products to the local market and 30% is our own consumption.

Clarifies the extent of backward integration for a key raw material and the dual role of the Sulphuric Acid plant as both internal supplier and external seller.

Asked by Madhur Rathi

Reaching historical 17-20% EBITDA margins Evasive
I can't predict that thing, but we are trying our level best to achieve that margin.

Management avoids committing to a timeline for achieving higher historical EBITDA margins, suggesting uncertainty or a long path ahead.

Asked by Madhur Rathi

3 min read 7 chapters

Detailed narrative

Strong Financial Performance in H1 FY26

Bhageria Industries reported a robust first half of FY26, with total income reaching ₹369.99 crores, marking a 48% year-on-year growth. EBITDA also increased by 48% to ₹48.94 crores, and net profit saw an impressive 83% growth, totaling ₹22.36 crores. The net margin for H1 FY26 improved to 6%, reflecting effective cost management and higher realizations, despite some segment-specific margin pressures.

Strategic Expansion into Specialty Chemicals with Plasticizers

The company announced the commencement of commercial production for a new Plasticizer product line by the end of December 2025. This initiative, backed by a relatively low CAPEX of approximately ₹10 crores, is projected to generate a significant annual revenue of ₹240 crores. This move marks Bhageria's entry into the polymer energy space, targeting applications in PVC cables, flooring, and footwear, aligning with its strategy to diversify into higher-margin specialty segments.

H-ACID Capacity Enhancement and Revenue Impact

Bhageria is expanding its H-ACID capacity at its Tarapur facility, increasing it from 400 metric tons per month to 500 metric tons per month. This expansion, requiring an investment of approximately ₹5 crores, is scheduled for completion within the next three months and is expected to be online by January end. Once fully operational, this incremental capacity is anticipated to add ₹50-75 crores in additional annual revenue, building on the plant's current 95% utilization rate.

Development in the Pharmaceutical Segment

In the pharmaceutical sector, Bhageria is manufacturing Dexamethasone base and Dexamethasone Sodium Phosphate, aiming to cater to regulatory markets where gross margins are expected to be in the 30-60% range. The company plans to file US DMF for Methylcobalamin in November and Japan DMF in December. While the pharma business typically has a 4-5 year gestation period, management expects this segment to break even within the next two years.

Contribution from Renewable Energy Project

The company's 32-megawatt solar project, with a CAPEX of ₹152 crores, is set to contribute significantly to its renewable energy portfolio. This project is expected to generate an annual revenue of ₹22 crores, based on a Power Purchase Agreement (PPA) rate of ₹3.08 per unit. The project boasts an attractive equity Internal Rate of Return (IRR) of approximately 16% and an EBITDA margin of 75-80%, underscoring its focus on sustainable and cost-effective operations.

Dye Intermediate Segment Performance and Outlook

The dye intermediate segment experienced margin compression in Q2 FY26, with margins shrinking from a historical 15-16% to 10%. This decline was primarily attributed to higher raw material prices and the impact of global market conditions, particularly in the US and European countries. However, management expressed confidence in a 2-3% margin improvement going forward, driven by a focus on the export segment which is currently performing well, and the cessation of dumping by Chinese competitors.

FY26 Revenue Guidance for Chemical Segment

For the full financial year 2026, Bhageria Industries provided guidance for its chemical segment, projecting revenue to be in the range of ₹725 to ₹775 crores. This outlook reflects the company's confidence in maintaining its growth trajectory through continued product innovation, capacity expansion, and diversification efforts, despite the competitive environment and raw material price fluctuations.

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