Lords Chloro

Lords Chloro Alkali Limited achieved a landmark financial year 2026, with total income growing by 44.62% year-on-year to INR393.1 crores. Profit after tax (PAT) saw an impressive surge of 360.9% to INR28.49 crores. The company's EBITDA for the full year increased by 159% to INR66.38 crores, resulting in an EBITDA margin of 16.89%, an improvement of 747 basis points year-on-year. This robust performance was attributed to healthy volume growth and stringent cost discipline.

The company is aggressively pursuing renewable energy integration to optimize costs and reduce its carbon footprint. Through the commissioning of a 16 MW solar plant and a 10 MW hybrid wind-solar group captive project, the share of renewable energy in total production cost was reduced from 61% in FY25 to 42% in FY26. With the upcoming 21 MW solar plant expected to be operational by mid-June 2026, the total captive renewable capacity will reach 37 MW plus 10 MW, increasing the renewable energy share to 40-45% of total power requirements, which is expected to yield substantial savings.

Lords Chloro is executing a multi-year capex program of INR315 crores across FY24-FY28. The first phase, including a 90 TPD caustic soda expansion and a 16 MW solar plant, has been completed. The second phase involves a 21 MW captive solar plant, CPW capacity expansion from 50 to 100 tons per day, and a further 100 ton per day caustic soda plant expansion. Post-expansion, the total installed capacity will be 360 tons per day. The company benefits from its focus on the North Indian market, where it anticipates demand to exceed production, with no new capacity additions expected for the next 2-2.5 years.

Q4 FY26 saw a dip in EBITDA margin to 14.03% from over 20% in Q3 FY26. This was primarily due to higher grid electricity rates, which came into effect from October 2025, and a temporary shutdown of an electrolyzer for renovation and membrane changes. Management expects these headwinds to ease with the commissioning of the 21 MW solar plant by mid-June 2026 and the completion of maintenance activities, anticipating a recovery in margins in the coming quarters.

As of March 31, shareholders' funds stood at INR242.52 crores, with total assets at INR478.7 crores. The company maintains a healthy debt-to-equity ratio of approximately 0.67x, with long-term debt at INR96.37 crores and short-term borrowings at INR65.58 crores. The current cost of debt is around 8%. The ongoing capex program is being funded through a mix of internal accruals and additional long-term debt of INR90 crores, ensuring financial flexibility.

The Indian caustic soda industry, with an annual capacity of 6.4 million tons, is growing in line with India's GDP and has transitioned from a net importer to an exporter. Management is optimistic about the demand environment for FY27, with improving caustic soda lye realizations. The company's renewable energy-led ESG positioning provides a competitive advantage, attracting customers seeking green credentials and offering significant cost savings compared to coal-based grid power.