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IG Petrochemicals Limited — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

I G Petrochemicals Limited reported a strong recovery in Q4 FY26, with revenue up 9% QoQ to INR 530 crores and EBITDA growing 38% YoY to INR 75 crores, despite a challenging full fiscal year marked by raw material volatility and geopolitical tensions. The company advanced its capacity expansion with the mechanical completion of its plasticizer project and DEP plant debottlenecking, while also strengthening its financial position through debt management. Management anticipates market normalization and steady demand growth in the medium term, supported by operational efficiencies and portfolio diversification.

Highlights

Q4 FY26 Revenue increased 9% QoQ to INR 530 crores, driven by improved realizations and higher volume.
Q4 FY26 EBITDA grew 38% YoY to INR 75 crores, with EBITDA margin improving to 14.1% from 11.1% in Q4 FY25.
Profit after tax for Q4 FY26 stood at INR 37 crores, indicating a sharp recovery from INR 21 crores in Q4 FY25.
Achieved mechanical completion of the advanced plasticizer project in March, with commercial production expected soon.
Successfully debottlenecked the DEP plant, increasing capacity to 12,000 tons, and reduced forex exposure by repaying debt.

Concerns

FY26 was a challenging year due to rising crude prices, market volatility, high global trade/logistic costs, and subdued demand from Western markets.
Q4 performance was primarily impacted by high raw material prices, affecting overall revenue and margin.
Full-year FY26 performance was impacted by high-cost inventory and a one-time mark-to-market forex loss.
Subdued demand across key segments, with potential for demand correction if elevated prices persist for 3-6 months.
Short-term oversupply in the Indian PAN market due to recent capacity additions by competitors.

Key financials

2 periods

Q4 FY26

Revenue
₹530 Cr
QoQ +9%
Gross Profit
₹149 Cr
YoY +10%
EBITDA
₹75 Cr
YoY +38%
EBITDA Margin
14.1%
PAT
₹37 Cr

FY26

Revenue
₹1,954 Cr
Gross Profit
₹451 Cr
EBITDA
₹130 Cr
EBITDA Margin
6.7%
PAT
₹23 Cr

What they filed

Q1 FY27: revenue up 31.5%, net profit up 607.7% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	583	558	480	470	465 −20%	465 −17%	524 +9%	618 +31%
Expenses	520	511	433	471	445	457	458	506
EBITDA	63	47	47	-1	20 −68%	8 −83%	67 +43%	112 +11300%
Margin	11%	8%	10%	0%	4%	2%	13%	18%
Other income	4	8	5	10	6	5	5	7
Interest	16	3	11	9	11	10	11	11
Depreciation	16	16	16	16	16	16	20	18
Profit before tax	34	36	25	-16	-1 −103%	-13 −136%	40 +60%	90 +663%
Tax rate	24%	21%	23%	-17%	42%	-16%	30%	26%
Net profit	26	29	19	-13	-2 −108%	-11 −138%	28 +47%	66 +608%
EPS	8.50	9.27	6.16	-4.22	-0.65	-3.53	9.12	21.58

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

Non-PAN Business
₹32 Cr Q4 FY26 Revenue₹146 Cr FY26 Revenue

Capital allocation

high confidence

Capex Capex disclosed
- Advanced plasticizer project (DOP, DINP, DIPP) with 75,000 tons installed capacity
- DEP plant debottlenecking, increasing capacity to 12,000 tons
- CBG plant construction
On capex front, during the year, we have achieved the mechanical completion of our advanced plasticizer project in March. Right now, we are doing the pre-operative and pre-operative operations in this and expected to start that commercial production of the facility soon. The facility will commence with an installed capacity of 75,000 tons. The plant will manufacture a various range of plasticizers, including DOP, DINP, and DIPP. In parallel, we also successfully completed the de-bottlenecking of our DEP plant during March, which has increased the capacity to around 12,000 tons. As a part of that, we are setting up the CBG plant, which is under construction right now and expected to complete by the end of June and July.
Debt Debt disclosed
- Repayment Pre-payment of certain Euro-denominated loan portion and conversion of most Euro loan into Rupee, repaying a substantial part of outstanding debt.
we undertook significant balance sheet expenses, including pre-payment of the certain portion of the Euro-denominated loan and conversion of most of the Euro loan into the Rupee in view of the geopolitical uncertainty, and repaying a substantial part of the outstanding debt. These steps have meaningfully reduced our forex exposure and further strengthened company's financial position.
Dividend ₹5/share (final)

Board has recommended a dividend of INR5 per share, which is around 50% for the year-ended FY 2026, which will be subject to the approval of shareholder in ensuing Annual General Meeting.

Guidance & targets

Profitability

Spread over market margin Profitability · Ongoing · High confidence $100 to $120

whatever is the market margin, we will be having around $100 to $120 over and above the market margin, that is because of the operational efficiency as well as the realization from by-product.

— Pramod Bhandari

Capacity

Total PAN capacity Capacity · Current · High confidence 2.75 lakh tons

Its exact 2.75 lakh tons.

— Pramod Bhandari
DEP capacity Capacity · Current · High confidence 12,000 tons

Previously 8,000-8,400 tons → 12,000 tons

No, we increased the capacity from 8,000-8,400 tons to 12,000 tons, debottlenecking.

— Pramod Bhandari

Capex

Plasticizer plant capex Capex · New capacity · Medium confidence INR 3,000 crores

Roughly INR3,000 crores.

— Pramod Bhandari

Volume

Plasticizer plant annualized production Volume · FY27 (nine months) · High confidence 24,000 to 25,000 tons

For a year, we believe it is -- it's not going to be a very elevated level. We expect between 24,000 to 25,000 tons on annualized basis because now it is only nine months expected for our plasticizer business for this year.

— Pramod Bhandari
Phthalic domestic and export sales volume Volume · Ongoing · High confidence 2 lakh tons, plus minus 2%, 3%

So, if we consume 15,000 to 16,000 tons for our plasticizer business, including DEP, then the 2 lakh tons, plus minus 2%, 3% for the domestic and export sales.

— Pramod Bhandari

Revenue

FY27 Revenue (elevated prices) Revenue · FY27 · Medium confidence INR 2,500 crores plus

And if prices remain elevated, it will be INR 2,500 crores plus.

— Pramod Bhandari
FY27 Revenue (moderate prices) Revenue · FY27 · Medium confidence INR 2,000 to 2,200 crores

If prices are moderate, it will be between INR 2,000 to 2,200 crores.

— Pramod Bhandari
Plasticizer project peak capacity revenue Revenue · Peak capacity · High confidence INR 25 crores to INR 28 crores

And once it is completed, we expect around INR25 crores to INR28 crores at peak capacity revenue.

— Pramod Bhandari
Overall revenue (optimal utilization) Revenue · Optimal utilization · Medium confidence INR 3,000 crores to INR 3,200 crores

So, overall, if you optimally utilize all the plants, including five PA, DEP and plasticizers, you expect to have INR3,000 crores to INR3,200 crores of revenue.

— Pramod Bhandari
Non-PAN business revenue (plasticizer, maleic, benzoic acid, DEP) Revenue · Next year · High confidence INR 300 crores to INR 350 crores

So, for next year, when we are talking about we see between INR300 crores to INR350 crores of revenue coming from plasticizer, maleic, benzoic acid, and DEP.

— Pramod Bhandari

Demand

Demand growth Demand · Ongoing · High confidence 6% to 8%

Then we see the steady demand growing at between 6% to 8%.

— Pramod Bhandari

What to watch in Q1 FY27

Plasticizer Plant Commercial Production

Soon (next quarter)

Current Mechanical completion in March, pre-operating activities ongoing

Target Commercial production started

Why it matters

This new facility is crucial for IGPL's diversification and future revenue growth, contributing to overall capacity utilization.

Right now, we are doing the pre-operative and pre-operative operations in this and expected to start that commercial production of the facility soon.

Risks & concerns

Raw Material Price Volatility
high

Rising crude prices and geopolitical tensions cause volatility in OX and other chemical product prices, impacting margins.

Management acknowledged
Subdued Demand from Western Markets
medium

Global trade and logistic costs, coupled with geopolitical tensions, have led to subdued demand, particularly from Western markets.

Management acknowledged
Potential Demand Correction from Elevated Prices
medium

If elevated prices persist for 3-6 months, demand could see a 5-10% correction as end-user industries struggle to pass on costs.

Analyst acknowledged
Short-term Oversupply in Indian PAN Market
medium

India is currently slightly oversupplied in PAN due to recent capacity additions by competitors, though normalization is expected in 1-2 years.

Management acknowledged
China Overcapacity and Competitive Pricing
medium

China's overcapacity in maleic and other chemicals leads to them flooding international markets at competitive prices due to lower production costs.

Management acknowledged

Q&A highlights

5 direct

Future margin profile (FY27-28) Partial

So, typically, we don't want to give any predictions for margin because the market is volatile, keeping in view the geopolitical issues in the market, and there is a quite sharp fluctuation in the raw material prices as well as final product prices. However, this generally provides that whatever is the market margin, we will be having around $100 to $120 over and above the market margin...

Management avoided specific margin predictions due to volatility but indicated a consistent spread over market prices, highlighting their operational efficiency.

Asked by Harshit Khadka

Impact of competitor's large PAN capex on pricing and supply Direct

I think it's already -- it started in the last one year... In one or two years, it is expected to be normalized. In India, today, we are slightly oversupplied because of two or three capacities started in similar time in the last one year. But I think in the next one or two years, because of the ongoing demand and starting of our plasticizer project, which will consume on an annual basis 30,000 to 35,000 tons of the phthalic, it will be creating the equilibrium of matching with the demand and supply.

Addresses concerns about oversupply in the Indian PAN market, with management projecting market normalization within 1-2 years due to demand growth and internal consumption.

Asked by Harshit Khadka

PAN-OX spread in Q3/Q4 and benefit from price increases Direct

In market, it is between -- I am not talking about the Jan-Feb, particularly, but if you take the average, it is around $150 for Jan-Feb-March. And right now, it is hovering between $150 to $200 in market. So, it's not actually price increase. It's basically the raw material prices have gone up... So, in line with that, the final product price is also required to be increased so as to maintain the margin.

Clarifies the current PAN-OX spread and explains how the company passes on raw material cost increases to maintain margins.

Asked by Rohit Sinha

Demand outlook given cost increases and market overcapacity Partial

So, right now, demand is steady. But I believe if prices remain at elevated level, there will be some correction in the demand, maybe 5-10%, 10%... not all downstream industries are good to pass on the raw material prices to the final product.

Highlights the risk of demand correction if elevated raw material prices are sustained, as end-user industries may struggle to pass on costs to consumers.

Asked by Riya Mehta

Key drivers for IGPL's $100-120 spread above market Direct

One is the operating efficiency, which we operate and we get the extra production because of the yield. Second, we have a by-product called maleic, which we are generating from the wash water... Third is the benzoic acid. So, if you take the -- put together all three, it will give us the advantage of typically $100 to $120.

Explains the specific competitive advantages (operational efficiency, by-products) that allow IGPL to achieve higher margins than the market.

Asked by Gunit Singh

Correlation between crude prices and PAN realization Direct

So, so basically the, there is no direct correlation between the crude and pan, because in the value chain, crude goes to naphtha, naphtha through reformat goes to mixed xylene, mixed xylene is converted into para which go to PTA, mixed xylene converted into OX which go to PA. So, direct there is no correlation. Of course, 0.6% to 0.7%, but directionally, whenever the crude price goes up, OX goes up and OX goes up, PX goes up.

Provides a detailed explanation of the indirect and directional relationship between crude oil and PAN prices, crucial for understanding raw material cost drivers.

Asked by Majid Ahamed

China dumping scenario for phthalic Direct

China is not dumping. They are selling their product in the international market. We call dumping when they're trying to sell below market prices. They are selling in line with the market prices. Because they have extra capacity, they are flooding the entire world with their products. And since their cost of production is low, and they work on a marginal cost, the other companies are not able to match their prices.

Clarifies the nature of the competitive threat from China, attributing it to overcapacity and lower production costs rather than predatory pricing.

Asked by Riya Mehta

3 min read 7 chapters

Detailed narrative

Q4 FY26 Performance Shows Strong Recovery

I G Petrochemicals Limited reported a robust recovery in Q4 FY26, with revenue increasing 9% quarter-on-quarter to INR 530 crores. This growth was supported by improved realizations and higher sales volumes. Gross profit for the quarter rose 10% year-on-year to INR 149 crores, while EBITDA saw a significant 38% year-on-year increase, reaching INR 75 crores. The EBITDA margin improved to 14.1% from 11.1% in Q4 FY25, and profit after tax stood at INR 37 crores, up from INR 21 crores in the corresponding quarter of the previous fiscal year.

FY26 Marked by Industry Headwinds and Financial Strengthening

The full fiscal year 2026 proved challenging for the chemical industry, impacting IGPL with rising crude prices, market volatility, and subdued demand. For FY26, total revenue was INR 1,954 crores, with EBITDA at INR 130 crores and an EBITDA margin of 6.7%. Profit after tax for the year was INR 23 crores, primarily due to pricing pressures, high-cost inventory, and a one-time mark-to-market forex loss. To mitigate risks, the company undertook significant balance sheet actions, including pre-paying Euro-denominated loans, converting most Euro loans to Rupee, and repaying substantial debt, thereby reducing forex exposure.

Strategic Capacity Expansion and Diversification Initiatives

IGPL is actively expanding and diversifying its product portfolio. The advanced plasticizer project, with an installed capacity of 75,000 tons for DOP, DINP, and DIPP, achieved mechanical completion in March, with commercial production anticipated shortly. Concurrently, the DEP plant underwent debottlenecking, increasing its capacity to 12,000 tons. In line with green chemistry initiatives, a CBG plant is under construction and is expected to be completed by June/July (Q2 FY27), further enhancing operational efficiency and sustainability.

Sustained Operational Efficiency and Cost Leadership

The company continues to leverage its strong operational efficiency and cost leadership, maintaining its position as one of the lowest-cost producers of phthalic anhydride in India and the second largest globally. This efficiency, combined with the realization from by-products like maleic and benzoic acid, enables IGPL to achieve a $100-120 spread over market margins. A localized customer base, with 80-85% of clients within a 200-300 km radius, ensures logistical efficiency and consistent demand stability.

Raw Material and Pricing Dynamics Amidst Volatility

The chemical sector experienced significant raw material price increases, with crude, naphtha, and mixed xylene prices rising 30-40%. Despite this volatility, IGPL has successfully passed on these elevated costs, maintaining its margins. The PAN-OX spreads are currently hovering between $150 and $200. Management noted that while OX availability is not a concern, its prices, like other petrochemical derivatives, remain elevated in line with feedstock costs.

Outlook on Demand and Market Normalization

While demand across key segments has seen a slowdown, IGPL observes a gradual improvement in recent orders. Management anticipates that the Indian PAN market, currently experiencing a slight oversupply due to recent capacity additions by competitors, will normalize within one to two years. This normalization is expected to be driven by consistent annual demand growth of 6-8% and the company's internal consumption of phthalic for its new plasticizer project (30,000-35,000 tons annually).

FY27 Revenue Guidance and Long-term Growth

For FY27, IGPL projects revenue of INR 2,500 crores plus if prices remain elevated, or INR 2,000 to 2,200 crores under moderate price conditions, based on planned sales volumes of 2,000,000 tons for phthalic, 20,000-25,000 tons for plasticizer, and 8,000 tons for DEP. With optimal utilization of all plants, including five PA, DEP, and plasticizers, the company expects to achieve INR 3,000-3,200 crores in revenue. The non-PAN business (plasticizer, maleic, benzoic acid, DEP) is projected to contribute INR 300-350 crores to revenue next year.

This is an AI-generated summary of a publicly available earnings call transcript.

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