IG Petrochemicals Limited

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.

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.

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.

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.

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.

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).

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.