Kiri Industries Limited — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

Kiri Industries reported an 8% standalone and 10% consolidated revenue growth in Q1 FY26, with standalone PAT turning positive due to Lonsen Kiri dividends. The dyes business continues to face headwinds, leading to a revised lower revenue guidance for FY26. Significant progress was reported on the DyStar divestment, with a deal expected by October/November 2025, and the copper project, which is being funded by the DyStar proceeds and is on track for partial operations by FY27.

Highlights

  • Standalone revenue from operations stood at Rs. 181 crores, reflecting an 8% year-on-year growth.

  • Standalone EBITDA recorded a profit of Rs. 17.3 crores, compared to Rs. 13.6 crores in Q1 FY25.

  • Standalone PAT was Rs. 7.2 crores, a significant improvement from a loss of Rs. 1.7 crores in Q1 FY25, primarily due to dividends from Lonsen Kiri.

  • Consolidated revenue from operations grew 10% YoY to Rs. 202 crores.

  • Consolidated EBITDA was Rs. 18.6 crores, up from Rs. 14.3 crores in Q1 FY25.

  • Consolidated net loss (before associates/JV) was Rs. 51.4 crores, compared to Rs. 1.1 crores loss in Q1 FY25.

  • Share of profit from associates and joint venture was Rs. 61.54 crores.

  • DyStar sale: Share-purchase agreement signed on May 29, 2025, for Kiri's 37.57% stake for a total of $696 million.

  • Copper project: Equity infusion of $130 million (approx. Rs. 1,100 crores) with partial revenue expected from FY27, targeting Rs. 12,000 crores in the first year of operation.

Concerns

  • Feedstock Sourcing for Copper Project

Key financials

  1. Standalone Revenue ₹181 Cr +8%YoY
  2. Standalone EBITDA ₹17.3 Cr +27.2%YoY
  3. Standalone PAT ₹7.2 Cr
  4. Consolidated Revenue ₹202 Cr +10%YoY
  5. Consolidated EBITDA ₹18.6 Cr +30.1%YoY
  6. Consolidated Net Loss (before associates/JV) ₹51.4 Cr
  7. Share of Profit from Associates/JV ₹61.54 Cr

What they filed

Q1 FY27: revenue up 54.5%, net profit up 2810.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue173 179 205 202 213 +23%174 −3%250 +22%312 +54%
EBITDA-5 -44 -5 -16 -14 −180%-49 −11%-142 −2740%16 +200%
Net profit80 177 -85 10 20 −75%5,023 +2738%514 +705%291 +2810%
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.

Guidance & targets

Divestment

  • DyStar Share Sale Completion Divestment · Q2 FY26 / Q3 FY26 · High confidence October 2nd, 2025 (extendable to November 3rd, 2025)
    But as far as the message that we receive is that the approval process is on track. And October 2nd is a firm date which they should be honoring. And if not, then the next extendable long-stop date is November 3rd. And November 3rd would be the full and the final date. So, hopefully, between October 2nd and November 3rd, we should get this concluded.

    — Manish Kiri

  • DyStar Sale Proceeds to Kiri Divestment · Upon completion of sale · High confidence $696 million
    The total amount is $696 million to be paid to Kiri.

    — Manish Kiri

Copper Project

  • Equity Infusion Copper Project · Ongoing · High confidence $130 million (approx. Rs. 1,100 crores)
    And equity that we are infusing to the extent of $130 million, which is close to Rs. 1,100 crore, has not been fully exhausted yet.

    — Manish Kiri

  • Debt Funding Copper Project · By October/November · High confidence Rs. 5,000 crores
    And the remaining Rs. 5,000 crores is going to come as debt in the company.

    — Manish Kiri

  • Financial Closure Copper Project · By December · High confidence Complete
    It is in process right now, and we have several in-principle approvals received, and we still hope that by December or before December we will have complete financial closure.

    — Manish Kiri

  • Revenue Start Copper Project · FY27 · High confidence Partial revenue
    FY'27, you will expect the revenue. Partial revenue we will start expecting from FY '27.

    — Manish Kiri

  • FY27 Revenue Copper Project · FY27 · High confidence Rs. 12,000 crores
    And that would generate, at least we are expecting, close to Rs. 12,000 crores of revenue in the first year.

    — Manish Kiri

  • FY27 Capacity Utilization Copper Project · FY27 · High confidence 25%
    So, that is somewhere close to 25% of our capacity.

    — Manish Kiri

  • Full Capacity Installation Copper Project · 2028 · High confidence Complete
    capacity would be installed by 2028.

    — Manish Kiri

  • Full Capacity Revenue Copper Project · By 2029-2030 · High confidence Rs. 40,000-45,000 crores
    So, technically by 2029-2030, we should have the entire capacity operational and that would generate more than Rs. 40,000 crore-Rs. 45,000 crore of revenue based on the current prices of copper.

    — Manish Kiri

Dyes Business

  • Standalone Revenue Forecast Dyes Business · FY26 · Medium confidence Rs. 800-900 crores

    Previously Rs. 1,500 crores → Rs. 800-900 crores

    So, we would revise it on a standalone basis to be close to Rs. 800 crores to Rs. 900 crores

    — Manish Kiri

  • Consolidated Revenue Forecast Dyes Business · FY26 · Medium confidence Rs. 1,200-1,300 crores

    Previously Rs. 1,500 crores → Rs. 1,200-1,300 crores

    and on a consolidated basis right around Rs. 1,200 crores to Rs. 1,300 crores.

    — Manish Kiri

Capital Allocation

  • Clarity on remaining DyStar proceeds deployment Capital Allocation · Q4 FY26 (October to December quarter) · Medium confidence Clarity
    I think post money is in, let us say by the end of the year, right? So, October to December quarter, when the funds are in, we should be able to give you clarity during that time.

    — Manish Kiri

Shareholder Returns

  • Decision on rewarding shareholders Shareholder Returns · Q4 FY26 (same quarter as funds received) · Medium confidence Decision
    But during the same quarter, we will also deliberate at the Board of Kiri to decide what could be the split of rewarding the shareholders and what could be the portion that we can keep for the future investments.

    — Manish Kiri

Risks & concerns

  • Feedstock Sourcing for Copper Project

    high

    Securing copper ore and concentrate is identified as the most challenging part, with efforts including MoUs with Philippines.

    Management acknowledged

  • Dyes and Dyes Intermediate Industry Headwinds

    medium

    Raw material volatility (caustic soda, nitric acid, G-acid, Tobias acid) and pressure on reactive dyes, vinyl sulfone, and H-Acid.

    Management acknowledged

  • Lower Capacity Utilization in Dyes Business

    medium

    Capacity utilization was almost 48% in Q1 FY26, leading to challenges in filling capacities for three years.

    Management acknowledged

  • Realignment of Dyes Exports due to US Tariffs

    medium

    New US tariffs are causing a shift in export destinations, which is expected to take a couple of quarters for realignment.

    Management acknowledged

  • Copper Price Volatility

    medium

    Management plans to manage short-term volatility through a permanent hedging team linked to LME prices.

    Analyst acknowledged

  • Burden of Legal Costs

    low

    Legal and receiver costs for the Singapore case were Rs. 7 crores in Q1 FY26, but are expected to decrease and be recovered with interest.

    Management acknowledged

Q&A highlights

3 direct
Unutilized funds from project loan and accrued interest Direct
Yes, more than half is unutilized. Almost Rs. 600 crores is unutilized, actually. ... Accrued interest? The interest has not been paid at all. So, whatever is accrued interest is not required to be paid because the debt is not required to be serviced till the DyStar proceeds are received.

Reveals a significant portion of the project funding (Rs. 600 crores) is currently unutilized but still accruing interest, impacting consolidated financials until DyStar proceeds are received.

Asked by Vivek Joshi

DyStar sale completion timeline and contingency for Senda's approval Direct
But as far as the message that we receive is that the approval process is on track. And October 2nd is a firm date which they should be honoring. And if not, then the next extendable long-stop date is November 3rd. ... So, then, if Senda doesn't get approval from the Chinese government, and by October 2nd, if the receiver sees that there is no possibility or there is no certainty, let me put it this way, then this will go to the second bidder.

Provides clarity on the critical DyStar sale timeline, including the fallback option of a second bidder with confirmed funds, reducing uncertainty around the transaction.

Asked by Ankit

Copper project revenue, capacity, and funding structure Direct
So, out of Rs. 5,500 crores that we will have post-tax, we are going to invest about Rs. 3,000 crores as an equity in the project. And the remaining Rs. 5,000 crores is going to come as debt in the company. ... FY'27, you will expect the revenue. Partial revenue we will start expecting from FY '27. ... And that would generate, at least we are expecting, close to Rs. 12,000 crores of revenue in the first year.

Details the funding mix (equity vs. debt) for the ambitious copper project, provides a clear timeline for revenue generation (FY27), and quantifies initial revenue expectations, giving investors a concrete future outlook.

Asked by Yash Dantewadia

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Kiri Industries reported a mixed Q1 FY26. Standalone revenue grew 8% YoY to Rs. 181 crores, with EBITDA increasing to Rs. 17.3 crores from Rs. 13.6 crores in Q1 FY25. Standalone PAT turned positive at Rs. 7.2 crores, a significant improvement from a Rs. 1.7 crores loss in the prior year, primarily driven by dividends from Lonsen Kiri. On a consolidated basis, revenue increased 10% YoY to Rs. 202 crores, and EBITDA rose to Rs. 18.6 crores from Rs. 14.3 crores. However, consolidated net loss before accounting for associates and joint ventures significantly widened to Rs. 51.4 crores from Rs. 1.1 crores in Q1 FY25, partially offset by a Rs. 61.54 crores share of profit from associates and JV.

DyStar Divestment Update

The company provided a critical update on the DyStar divestment, confirming the execution of a share-purchase agreement with Zhejiang Longsheng Group Company Limited on May 29, 2025. Kiri's 37.57% stake in DyStar will be sold for a total consideration of $696 million. The deal is contingent on regulatory approvals, with a long-stop date of October 2nd, 2025, extendable to November 3rd, 2025. Management expressed high confidence in the deal's completion, noting that if the primary bidder fails to secure approvals, the sale would proceed to a second bidder by December 31st, 2025, whose funds are already confirmed.

Copper Project Development and Funding

Kiri Industries is actively progressing its ambitious copper project, with an equity infusion of $130 million (approximately Rs. 1,100 crores) from Singapore borrowings. The total project budget is Rs. 8,000 crores, with Rs. 3,000 crores allocated as equity and Rs. 5,000 crores expected from debt, for which in-principle approvals are largely secured. The plant, strategically located at Pipavav Port in Gujarat, is expected to commence partial operations by FY27, targeting Rs. 12,000 crores in revenue from 25% capacity utilization. Full capacity installation is anticipated by 2028, projecting Rs. 40,000-45,000 crores in revenue by 2029-2030 based on current copper prices.

Dyes Business Challenges and Revised Outlook

The dyes and dyes intermediate industry continues to face headwinds, particularly in reactive dyes, vinyl sulfone, and H-Acid, due to raw material volatility and US tariffs causing export realignment. This has led Kiri Industries to revise its FY26 revenue guidance downwards. Standalone revenue is now projected to be Rs. 800-900 crores, a significant reduction from the earlier Rs. 1,500 crores. Consolidated revenue guidance has also been lowered to Rs. 1,200-1,300 crores. The company's dyes capacity utilization stood at a challenging 48% in Q1 FY26, contributing to the pressure on margins.

Strategic Initiatives and Global Engagements

Management highlighted several strategic initiatives, including exploring opportunities in Odisha for potential projects in 3-5 years and signing an MoU with the Philippines government to invest in a copper mine and secure off-take agreements for copper ore. These global engagements are aimed at securing feedstock for the upcoming copper plant and exploring future growth avenues. The company also addressed the termination of a prior CEO for the copper unit, citing integrity issues, mismanagement, and misconduct as reasons for the Board's unanimous decision.

Capital Allocation and Shareholder Returns

Kiri Industries plans to allocate half of the post-tax DyStar sale proceeds (estimated Rs. 5,500-5,600 crores) as equity into the copper project, amounting to approximately Rs. 3,000 crores. The remaining funds will be held, with the Board deciding on their deployment for future investments and shareholder rewards. Clarity on the allocation of these remaining funds and a decision on rewarding shareholders is expected in the October to December quarter (Q4 FY26), coinciding with the receipt of the DyStar sale proceeds.

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