Meghmani Organics Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

Meghmani Organics reported a challenging Q3 FY26 with standalone revenue of ₹485 crores and PAT of ₹22 crores, while consolidated revenue was ₹509 crores with PAT of ₹21 crores for 9M FY26. The Crop Protection segment showed resilience with a 15.3% EBITDA margin despite a 14% volume decline due to US trade policy. However, the Titanium Dioxide and Pigment segments faced significant headwinds from high raw material costs, anti-dumping duty withdrawal, and weak demand, leading to plant shutdowns for TiO2. The company made substantial debt repayments and is focusing on operational efficiencies and renewable energy to improve future profitability.

Highlights

  • Standalone PAT of ₹22 crores in Q3 FY26.

  • Consolidated PAT of ₹21 crores in 9M FY26, against a loss of ₹30 crores in the corresponding previous year.

  • Crop Protection segment maintained a healthy EBITDA margin of 15.3% with 66% capacity utilization.

  • Significant year-to-date debt repayment of ₹128 crores, reducing standalone debt-to-equity to 0.33 and consolidated to 0.51.

  • Nano Urea has started receiving commercial orders in some markets and positive trial results, with an expected EBITDA margin of 20-22%.

Concerns

  • Crop Protection segment experienced a volume decline of almost 14% due to US tariff uncertainty and softer demand in other export geographies.

  • Titanium Dioxide (TiO2) profitability remained under severe pressure due to elevated Sulfuric Acid costs (₹15-18 vs. ₹4-5) and weaker price realization following the withdrawal of anti-dumping duty.

  • Pigment segment reported a low EBITDA of ₹0.7 crores and 38% capacity utilization, impacted by the weak European economy.

  • Kilburn subsidiary reported a negative EBITDA of ₹13 crores on a revenue of ₹19 crores.

Key financials

2 periods

Headline

  • Standalone Revenue
    ₹485 Cr
  • Standalone EBITDA
    ₹51 Cr
  • Standalone PAT
    ₹22 Cr
  • Standalone EBITDA Margin
    10.6%
  • Consolidated Revenue
    ₹509 Cr
  • Consolidated EBITDA
    ₹38 Cr
  • Consolidated EBITDA Margin
    7.4%

9M

  • Standalone Revenue
    ₹1,635 Cr
    YoY +8.8%
  • Standalone EBITDA
    ₹203 Cr
    YoY +75%
  • Consolidated Revenue
    ₹1,700 Cr
  • Consolidated EBITDA
    ₹157 Cr
  • Consolidated PAT
    ₹21 Cr

What they filed

Q1 FY27: revenue down 11.6%, net profit up 269.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue544 569 553 614 577 +6%509 −11%474 −14%543 −12%
EBITDA31 41 65 67 52 +68%38 −7%20 −69%98 +46%
Net profit-9 -4 20 13 12 +233%-4 +0%8 −60%48 +269%
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

Share of Revenue
₹509 Cr Total
  • Crop Protection ₹382 Cr 75.0%
  • Pigment ₹103 Cr 20.2%
  • Kilburn (Subsidiary) ₹19 Cr 3.7%
  • MCNL (Crop Nutrition) ₹5 Cr 1.0%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Past CAPEX for Titanium Dioxide ₹600 Cr
    Got it. Sir, again on this Titanium Dioxide, we did a CAPEX of Rs. 600 crores.
  • Debt Debt disclosed
    • Repayment Year-to-date debt repayment ₹128 Cr
    As of 31st December 2025, on standalone basis, our total debt stands at Rs. 573 crores comprising of Rs. 455 crores in short-term debt and Rs. 118 crores in long-term debt. Debt-to-equity ratio on standalone basis stood at Rs. 0.33. On consolidated basis, our total debt stands at Rs. 783 crores which includes Rs. 464 crores in short-term debt and Rs. 319 crores in long-term debt. Debt-to-equity ratio on consolidated basis stood at Rs. 0.51.

Guidance & targets

Margin

  • Agrochemical Segment EBITDA Margin Margin · long-term · High confidence 15%-17%
    In the Agrochemical segment, on an average, industry generates EBITDA margin of 15%-17%. And we will maintain that kind of profitability in this range.

    — Ankit Patel

  • Pigment Segment EBITDA Margin Margin · long-term · Medium confidence 8%-9%
    In the Pigment segment, currently it is under a lot of pressure. Going forward, we have been improving on operations. We believe to take our EBITDA margin close to 8%-9%.

    — Ankit Patel

  • Titanium Dioxide Segment EBITDA Margin Margin · long-term (reasonable market conditions) · Medium confidence 17%-20%
    In Titanium Dioxide, on an average, in the reasonable market condition point of view, it should generate about 17%-20% EBITDA margin.

    — Ankit Patel

  • Nano Urea EBITDA Margin Margin · current · High confidence 20%-22%
    So, in the case of Nano Urea, the margins are in the range of about 20%-22%.

    — Ankit Patel

  • Nano Urea EBITDA Margin (improved utilization) Margin · future (at ₹10-12 crores revenue) · Medium confidence 20%
    So, we believe that once we utilize the plant at reasonably good level, once we reach at about Rs. 10-Rs. 12 crores revenue level, then it will have about 20% EBITDA margin.

    — Ankit Patel

Revenue

  • Agrochemical Segment Peak Revenue Revenue · long-term · Medium confidence ₹2,500 crores
    So, the kind of the infrastructure what we have created in the Agrochemical segment that can create revenue of close to Rs. 2,500 crores in total.

    — Ankit Patel

  • Pigment Segment Peak Revenue Revenue · long-term · Medium confidence ₹700-₹750 crores
    In the Pigment, we already have the capacity which can go up to Rs. 700-Rs. 750 crores.

    — Ankit Patel

  • Titanium Dioxide Segment Revenue (current capacity) Revenue · long-term (hypothetical) · Low confidence ₹400 crores
    If we consider on an average Rs. 200 price, then also it can generate revenue of close to about Rs. 400 crores.

    — Ankit Patel

Cost Reduction

  • Renewable Energy Cost Saving per unit Cost Reduction · future · High confidence ₹4-₹4.5
    So, per unit there will be saving of about Rs. 4-Rs. 4.5.

    — Ankit Patel

Capacity

  • Renewable Energy Capacity Capacity · future · High confidence 3.5 MW
    So, it is close to 3.5 megawatt and the unit generation because there is a renewable energy, so there is no constant unit, it varies.

    — Ankit Patel

Energy Mix

  • Renewable Energy Share of Total Requirement Energy Mix · coming years · Medium confidence 60%
    So, by doing that, I think in the coming years, we will be reaching close to 60% of our requirement will be renewable energy.

    — Ankit Patel

Capex

  • Next 2-3 Years Capex Capex · next 2-3 years · High confidence Routine minor CAPEX
    For the next, at least for the next 2 years, there is not going to be any significant CAPEX. Only routine minor CAPEX is going to be there for some de-bottlenecks or some maintenance CAPEX.

    — Ankit Patel

What to watch in Q4 FY26

TiO2 Anti-Dumping Duty Re-imposition

very soon (few months)
Current Awaiting new order from DGTR, then Finance Ministry order
Target New ADD order from DGTR and Finance Ministry

Why it matters

Crucial for improving TiO2 profitability and market dynamics.

Following the DGTR order, there will be order from the Finance Ministry. So, again, this is a matter of few months now.

Risks & concerns

  • US trade policy uncertainty and tariffs

    high

    Impacted demand from US market and other export geographies for Crop Protection, leading to ~14% volume decline.

    Management acknowledged

  • Elevated raw material costs for TiO2 (Sulfuric Acid)

    high

    Sulfuric Acid prices are significantly higher (₹15-18) compared to historical levels (₹4-5), severely impacting TiO2 profitability.

    Management acknowledged

  • Withdrawal of anti-dumping duty on TiO2

    high

    Led to weaker price realization and increased imports from China, impacting domestic players.

    Management acknowledged

  • Chinese dumping and inventory liquidation

    medium

    Companies stocked up cheap TiO2 from China after ADD withdrawal, which needs 2-3 months to liquidate even after re-imposition.

    Analyst acknowledged

  • Weak European economy

    medium

    Impacting the pigment business due to softer demand.

    Management acknowledged

Q&A highlights

8 direct
Crop Protection volume decline and US tariffs Direct
So, particularly in the Crop Protection segment, yes, there has been drop in the volume in this quarter. Normally, we have seen this trend in the third quarter. Globally, given it was a calendar year, but still, because of the tariff uncertainty, there has been reduction in the volume in the US market. And also, there is an indirect effect of the tariff on the other markets as well.

Addresses the primary reason for volume decline in the largest segment, highlighting external market challenges.

Asked by Ankit Gupta

Titanium Dioxide (TiO2) anti-dumping duty (ADD) withdrawal and re-imposition Direct
So, the anti-dumping was imposed in the last year, in the year 2025, somewhere in the month of May, middle of May. Following that, the order was challenged by the Indian Paint Association, IPA, in Kolkata High Court... DGTR accepted the order and worked on the lapses of the process, anti-dumping imposition process. And that has already been done. And now we are awaiting for the new order for the anti-dumping duty from DGTR side.

Explains the complex regulatory situation for TiO2, which significantly impacts its profitability and market dynamics.

Asked by Ankit Gupta

Profitability of TiO2 business given past CAPEX and losses Direct
So, Madhurji, as Titanium Dioxide as a segment, it is one of the very good product. Indian market is close to 5 lakh tons. And going forward, the segment is growing significantly because in India, our domestic market is also growing significantly. So, we believe that this is a good product, but it is only the time which has created the problem because of the anti-dumping duty reversal. At the same time, the key raw material prices have shot up drastically, unrealistically.

Analyst challenges the rationale for continuing the TiO2 business given its unprofitability and past CAPEX, prompting management to defend its long-term view despite current challenges.

Asked by Madhur Rathi

Decision to shut down TiO2 plant Direct
Yes, Madhurji, for the timing, we have taken shutdown of the plant, looking at the market condition to reduce the loss.

Reveals a significant operational decision to mitigate losses in the TiO2 segment, indicating severe market conditions.

Asked by Madhur Rathi

Expected timeline for TiO2 segment improvement Direct
From second quarter onwards only, not before that.

Provides a specific timeline for when the TiO2 segment is expected to show improvement, contingent on external factors.

Asked by Nipun Sharma

Impact of high Sulfuric Acid prices on TiO2 Direct
One of the key raw materials is the Sulfuric Acid. Sulfuric Acid price used to be in the range of Rs. 4 - Rs. 5. Now, it is in the range of more than Rs. 15 Rs. 18. So, that is getting used substantially in a huge volume. So, that is impacting a lot.

Identifies a critical raw material cost pressure point that is significantly impacting TiO2 profitability.

Asked by Madhur Rathi

Nano Urea commercial orders vs. sampling Direct
Positively, there has been some commercial order already started taking place in few markets. And a lot of positive trials result has already come. So, we expect in the year of '26-27, there will be further more improvement in the export orders in several of the markets.

Confirms the transition of Nano Urea from trials to commercial orders, indicating early success and future growth potential.

Asked by Sunil Jain

Renewable energy cost reduction and timeline Direct
So, typically the power which we get it from the grid, government, it is in the range of about Rs. 9-Rs. 9.5 and the power which we will be getting from the renewable source will be in the range of after adding all the expenditure close to Rs. 5. So, per unit there will be saving of about Rs. 4-Rs. 4.5.

Quantifies the expected cost savings from renewable energy initiatives, highlighting a key operational efficiency driver.

Asked by Madhur Rathi

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Detailed narrative

Q3 FY26 Performance Overview

Meghmani Organics Limited reported a challenging Q3 FY26. On a standalone basis, revenue stood at ₹485 crores, with EBITDA at ₹51 crores and PAT at ₹22 crores, resulting in an EBITDA margin of 10.6%. Consolidated figures showed revenue of ₹509 crores and EBITDA of ₹38 crores, with an EBITDA margin of 7.4%. For the nine months ended December 31, 2025, consolidated revenue reached ₹1,700 crores and EBITDA ₹157 crores, with a PAT of ₹21 crores, a significant improvement from a loss of ₹30 crores in the prior year period.

Crop Protection Segment Performance and Challenges

The Crop Protection segment, which constitutes 79% of total revenue, recorded production of approximately 9,283 MT with a capacity utilization of 66%. Revenue for the segment was ₹382 crores, generating an EBITDA of ₹58 crores and an EBITDA margin of 15.3%. However, the segment experienced a volume decline of almost 14% in Q3 FY26. This was primarily attributed to ongoing uncertainty around US trade policy, which impacted demand from the US market and indirectly affected other export geographies. Management expects demand to improve as customers become more pragmatic in their buying patterns.

Titanium Dioxide (TiO2) Segment Under Severe Pressure

The TiO2 segment faced significant profitability challenges due to elevated raw material costs and weaker price realization. Sulfuric Acid, a key raw material, saw its price increase from a historical range of ₹4-5 to ₹15-18 per unit. The withdrawal of anti-dumping duty (ADD) by the Finance Ministry further exacerbated price realization issues. The company has taken a shutdown of its TiO2 plant since November 2025 to mitigate losses. Management is awaiting a new ADD order from DGTR, which is expected soon, and anticipates raw material prices to normalize in the coming quarters, with improvement expected from Q2 FY27.

Pigment Segment and Other Business Units

The Pigment segment, contributing 21% to total revenue, reported production of 3,144 MT with 38% capacity utilization. Revenue stood at ₹103 crores, but EBITDA was a mere ₹0.7 crores. The segment's performance was impacted by the weak European economy. Management is implementing corrective actions to improve operational efficiency and aims for an EBITDA margin of 8-9%, with improvement expected from Q1 FY27. The Kilburn subsidiary reported a negative EBITDA of ₹13 crores on ₹19 crores revenue, and the Crop Nutrition segment (MCNL) also had a negative EBITDA of ₹0.4 crores on ₹5 crores revenue.

Nano Urea Progress and Future Outlook

The Nano Urea segment is showing promising signs, with commercial orders already being placed in several markets following positive trial results. The segment currently operates at an EBITDA margin of 20-22%. Management expects further improvement in export orders in FY27. While current utilization is low, reaching a revenue level of ₹10-12 crores is projected to sustain a 20% EBITDA margin. The company is actively developing new international markets and expanding its product portfolio for Crop Nutrition.

Capital Allocation and Debt Management

As of December 31, 2025, standalone total debt was ₹573 crores (₹455 crores short-term, ₹118 crores long-term), with a debt-to-equity ratio of 0.33. Consolidated total debt stood at ₹783 crores (₹464 crores short-term, ₹319 crores long-term), with a debt-to-equity ratio of 0.51. The company has made a significant debt repayment of ₹128 crores year-to-date. For the next 2-3 years, the company anticipates only routine minor CAPEX for de-bottlenecking and maintenance, with no significant new investments planned.

Operational Efficiency and Renewable Energy Initiatives

Meghmani Organics is focusing on operational efficiencies to reduce costs, particularly in energy. Initiatives include modifying plants, improving processes to reduce electricity and steam consumption, and implementing small automation for manpower reduction. The company is also investing in renewable energy through a group captive power policy, aiming to meet 60% of its energy requirement from renewable sources in the coming years. This is expected to reduce power costs by ₹4-4.5 per unit (from ₹9-9.5 to ₹5) once commercialized in Q2 or Q3 FY27.

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