Kiri Industries Limited — Q2 FY26 earnings call

Kiri Industries reported a standalone revenue of ₹195 crores for Q2 FY26, marking a significant 34% year-on-year growth and an 8% sequential increase. Despite this revenue growth, the company recorded a standalone EBITDA loss of ₹10 crores and a net loss of ₹21 crores, primarily attributed to elevated legal expenses from the DyStar case and higher operating costs. For the first half of FY26, standalone revenue reached ₹375 crores, growing 20% YoY, with an EBITDA of ₹7 crores and a net loss of ₹14 crores.

On a consolidated basis, Kiri Industries achieved ₹213 crores in revenue for Q2 FY26, representing a 23% YoY and 6% sequential growth. However, consolidated performance was impacted by an EBITDA loss of ₹13 crores and a net loss of ₹80 crores before considering the share of profit from associates and other OCI. High finance costs of ₹61 crores and elevated input costs were key contributors to the consolidated losses. For H1 FY26, consolidated revenue was ₹416 crores (up 17% YoY), with a net loss of ₹131 crores before the share of profit from associates, which stood at ₹161 crores.

The sale of Kiri's 37.57% stake in DyStar, valued at $1.9 billion (with Kiri's potential consideration around $696 million), continues to face delays. The long-stop date, initially October 2, 2025, and then November 3, 2025, has been further extended to December 1, 2025. This extension was granted because the purchaser, Longsheng, could not obtain necessary regulatory approvals from NDRC and the Ministry of Commerce in China. An additional US$5.11 million has been deposited into the escrow account, bringing the total to US$8.59 million.

In response to the ongoing delays, a financially strong second bidder has been inducted into the DyStar sale process. This bidder has provided proof of funds, and confirmatory due diligence and draft sale-purchase agreement exchanges are already underway. Management expressed confidence that the transaction could still be concluded by December 31, 2025, especially if the second bidder is chosen, with a 'more than 90%' probability of completion by that date. Kiri Industries is actively urging the receiver to terminate Longsheng if they fail to meet the December 1st deadline.

Kiri Industries is advancing its strategic diversification into the copper and fertilizer sectors through its step-down subsidiary, Indo-Asia Copper Limited (IACL). The integrated complex at Jafrabad, Gujarat, will feature a 5 lakh tonnes per annum copper smelter and a fertilizer plant utilizing sulfuric acid. Basic engineering for the project is complete, and 60% of detailed engineering is targeted for completion by February 2026. Trial productions for the copper plant are projected to commence between January 2026 and December 2028.

Approximately 70% of the borrowed funds for the copper project have already been utilized for land acquisition, vendor payments, and machinery orders, with 100% utilization expected within the next 'two, three months.' The project's financing involves a mix of dollar and rupee, with an estimated interest rate of 8.5% to 9%. Legal costs, currently elevated due to the ongoing DyStar litigation, are expected to 'drastically drop' once the sale proceeds from the DyStar transaction are received in the company's account.

The dyes and intermediates industry experienced a gradual recovery in Q2 FY26, supported by improved downstream textile demand and normalized global freight conditions. Reactive dyes maintained positive momentum with firm export enquiries. However, intermediates such as vinyl sulphone and H. Acid were affected by intermittent raw material volatility, particularly in naphthalene-based feedstocks. The company continues to focus on operational discipline, cost optimization, and rationalizing its product mix to enhance export competitiveness and mitigate external volatility^🌐.