Meghmani Organi.

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.

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.

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.

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.

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.

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.

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.