Laxmi Organic Industries Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Laxmi Organic reported a challenging Q3 FY26 with a 9% revenue decline and 33% EBITDA drop year-on-year, primarily due to price moderation in Specialties and subdued spreads in Essentials. Despite the headwinds, the company is progressing with its Dahej expansion, with Phase 2 completion targeted by Q4 FY26, and its Lote fluorination facility is on track. Management highlighted early green shoots in raw material pricing and a continued focus on self-help measures and new growth projects.

Highlights

  • PAT for Q3 FY26 stood at INR 25 crores, down from INR 29.3 crores in the previous year.

  • EBITDA for Q3 FY26 was nearly INR 50 crores, a 33% decline year-on-year.

  • Adjusted EBITDA for the quarter was INR 14 crores, after accounting for one-time items.

  • Revenues for the quarter decreased by nearly 9% quarter-on-quarter versus the previous year (Q3 FY25).

  • Specialties segment revenue declined by 30%, with EBITDA margins at 12-13% due to price moderation and product phase-out.

  • Essentials business revenue declined by 6%, though volumes remained stable, impacted by acetic acid feedstock prices.

  • Dahej Phase 1 is operational and supplying customers, with Phase 2 expected to be completed by end of Q4 FY26.

  • Lote fluorination facility is on track to achieve INR 70-80 crores top line in its first year of operations (FY26).

Concerns

  • Challenging Global Chemical Industry

Key financials

  1. Revenue Growth -9% -9%YoY
  2. EBITDA ₹50 Cr -33%YoY
  3. PAT ₹25 Cr -15%YoY
  4. Adjusted EBITDA ₹14 Cr
  5. Employee Cost ₹46 Cr +35%YoY
  6. Other Expenses Decline ₹5 Cr

What they filed

Q1 FY27: revenue up 39.7%, net profit up 223.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue771 786 710 693 700 −9%719 −9%735 +4%968 +40%
EBITDA75 75 59 31 37 −51%50 −33%54 −8%114 +268%
Net profit28 29 22 21 11 −61%25 −14%22 +0%68 +224%
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

  • Essentials Business
    6% Revenue Decline0% Volume Growth
  • Specialties Business
    30% Revenue Decline12% EBITDA Margin

Guidance & targets

Capacity

  • Dahej Phase 2 Completion Capacity · Q4 FY26 · High confidence end of quarter 4
    And the project remains, especially for the Phase 2, on course, and our priority remains bringing the Phase 2, completing it by the end of quarter 4.

    — Rajan Venkatesh, MD and CEO

  • Dahej Phase 2 Ramp-up Capacity · FY27 · Medium confidence first year of qualification plus ramp-up
    So FY '27 will be the first year of qualification plus ramp-up and FY '28 is where we will try to further fast track the ramp-up.

    — Rajan Venkatesh, MD and CEO

  • Essentials New Capacity Commercialization Capacity · FY27 · High confidence move that into the market
    And also with the cost position that we are establishing that we will diligently move, once the asset is ready, into FY '27, we will diligently move that into the market.

    — Rajan Venkatesh, MD and CEO

Capex

  • Dahej Capex Capex · Overall · High confidence INR 710 crores
    But the big chunk -- and again, don't forget the Dahej capex is a INR 710 crores capex. It's not INR 1,000 crores; INR 710 crores.

    — Rajan Venkatesh, MD and CEO

Revenue

  • Diketene Derivatives Revenue (Dahej) Revenue · H2 FY27 · Medium confidence revenues from H2 FY '27
    If we are able to get all the qualifications done, I think that is the focus that we are working towards.

    — Rajan Venkatesh, MD and CEO

  • Lote Fluorination Top Line Revenue · FY26 · High confidence INR 70 crores to INR 80 crores
    The fluorination, our focus was to be closer to about the INR 70 crores to INR 80 crores of top line. And I think we are chugging towards closer to be in that range.

    — Rajan Venkatesh, MD and CEO

Raw Material Prices

  • Acetic Acid Prices Raw Material Prices · short to midterm · Medium confidence $340 to $370
    But from today's perspective, that is where we expect somewhere between upward of $340 to that $360, $370 level is where it might float.

    — Rajan Venkatesh, MD and CEO

Spreads

  • Ethyl Acetate Spreads Spreads · near term · Medium confidence $130 range
    And where we were really at a pain point of $90 to $100 over acetic acid and ethanol, we are now inching towards the $130 range.

    — Rajan Venkatesh, MD and CEO

New Product Commercialization

  • New Agro Intermediate Sales New Product Commercialization · Q4 FY26 · High confidence manifesting in quarter 4
    And that product basically is in the qualification phase, and we will see sales from that manifesting in quarter 4.

    — Rajan Venkatesh, MD and CEO

  • New Agro Intermediate Ramp-up New Product Commercialization · FY27 · Medium confidence ramp-up would happen
    But obviously, that is going to be the first quarter and then the ramp-up would happen into FY '27.

    — Rajan Venkatesh, MD and CEO

Risks & concerns

  • Challenging Global Chemical Industry

    high

    The global chemical industry continues to be challenging, with ongoing efforts towards cost optimization and restructuring.

    Management acknowledged

  • Raw Material Price Deflation

    medium

    Continued deflationary impacts on key raw materials, though some positive pivoting is now being observed.

    Management acknowledged

  • Acetic Acid Overcapacity

    medium

    Supply-demand dynamics for acetic acid remain long, but current low prices are not sustainable for most producers, leading to some capacity going offline.

    Management acknowledged

  • Customer Concentration for Dahej Phase 1

    medium

    Management declined to disclose specific volumes from Dahej Phase 1, citing confidentiality due to its link with a multiyear contract with one customer, implying potential concentration risk.

    Analyst not addressed

  • US Tariffs Impact on Value Chain

    low

    Laxmi Organic's direct exposure to the US market is only 10% of top-line revenue, with only 10% of that impacted by tariffs, making the direct material impact low, though the value chain is affected.

    Management downplayed

Areas of evasion (1)

  • Dahej Phase 1 current volume

Q&A highlights

1 direct, 1 evasive
Dahej Phase 2 ramp-up and revenue contribution Direct
So FY '27 will be the first year of qualification plus ramp-up and FY '28 is where we will try to further fast track the ramp-up.

This question clarifies the timeline for revenue generation from the significant Dahej expansion, indicating a phased contribution over FY27 and FY28.

Asked by Jainam Ghelani

Specialties segment EBITDA margin recovery Partial
So as we explained also, first and foremost, we have put a slide which goes to show what has been our journey in the Specialties and specifically the diketene.

The analyst pressed for a timeline on margin recovery to 20-22%, but management explained the reasons for the current decline without committing to a specific recovery timeline, leaving uncertainty for investors.

Asked by Jainam Ghelani

Current volume from Dahej Phase 1 operations Evasive
I would like to keep that confidential at this point of time because it is also impacting how our customer is being viewed. So please respect us on that topic.

Management's refusal to disclose specific volumes from the newly operational Dahej Phase 1 raises questions about the scale of current operations and potential customer concentration, which is a key investor concern.

Asked by Chetan Doshi

3 min read 6 chapters

Detailed narrative

Global Chemical Industry & Demand Trends

The global chemical industry remains challenging, marked by cost optimization, shutdowns of subscale assets, and supply chain rerouting due to evolving tariffs. However, recent shutdowns in Europe and China's anti-involution policy, along with the signed EU-India FTA, are seen as potential positive catalysts. Demand signals from key end-user segments like packaging, inks, adhesives, and pharmaceuticals remained stable, while agrochemicals were moderate and paints/coatings weak to moderate.

Q3 FY26 Financial Performance & Key Drivers

Laxmi Organic reported a challenging Q3 FY26 with revenues decreasing by nearly 9% year-on-year. EBITDA was nearly INR 50 crores, down 33% from the previous year, and PAT stood at INR 25 crores, compared to INR 29.3 crores in Q3 FY25. The adjusted EBITDA was INR 14 crores. Key drivers for the decline included continuing pressure on ethyl acetate spreads, a product mix shift due to a decline in Specialties, and incremental costs from Lote and Dahej facilities. The results also included a one-time net gain of INR 36 crores from a litigation settlement, offset by labor and supply chain redesign costs.

Specialties Segment Performance & Outlook

The Specialties segment experienced a significant revenue decline of 30% in Q3 FY26, with EBITDA margins at 12-13%. This was attributed to 12% price moderation, a 5-6% impact from a one-time campaign product in FY25 that did not repeat, and a 10% impact from the phase-out of an agrochemical intermediate. Management expects sales from a new replacement product to manifest in Q4 FY26, with ramp-up continuing into FY27. The company remains focused on its diketene derivatives space, leveraging its largest global portfolio and cost position.

Essentials Segment Performance & Outlook

The Essentials business saw a 6% decline in revenue in Q3 FY26, though volumes remained stable. This was primarily due to the impact of acetic acid feedstock prices, which had dropped over 20% in 2024-2025. However, acetic acid prices have rebounded to $360-$380 levels in December, and management anticipates them to float between $340-$370 in the short to midterm. Ethyl acetate spreads are also improving, inching towards the $130 range from $90-$100. The company's focus remains on volume-driven profitable growth, with new capacities coming online in FY27.

Capex & Project Updates (Dahej & Lote)

The Dahej facility, a significant INR 710 crores capex, is progressing as planned. Phase 1 is already operational and supplying customers, while Phase 2, focusing on diketene and its downstream derivatives, is on track for mechanical completion by the end of Q4 FY26. FY27 will be the first year for qualification and ramp-up of Dahej Phase 2, with further fast-tracking in FY28. The Lote fluorination facility remains on track to achieve its target of INR 70-80 crores top line in its first year of operations (FY26), operating in compliance with all regulations.

Self-Help Measures & Strategic Focus

Laxmi Organic continues to implement self-help measures to navigate the challenging chemical industry landscape. These include focusing on productivity, commercial excellence, execution excellence for projects within budget and scope, and stringent cost discipline. The company is also prioritizing new growth projects and product development, particularly in its specialty vertical. Management reaffirmed its commitment to transparency and active engagement with stakeholders, ensuring environmental compliance at its Lote facility.

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