OCCL

OCCL reported a robust start to FY26 with revenue reaching INR123 crores, marking a 14% growth compared to Q4 FY25. EBITDA saw a significant 36% increase from the previous quarter, totaling INR27 crores. This strong performance led to an expansion in EBITDA margins to 21.7% in Q1 FY26, up from 18.1% in Q4 FY25. Profit after tax stood at INR13 crores, translating to a PAT margin of 10.6%.

The improved Q1 FY26 performance was largely attributed to the sulphuric acid segment. Management clarified that while sulphur raw material prices remained elevated, the selling price of sulphuric acid also increased, leading to better-than-historical margins for this product. However, it was noted that sulphuric acid's percentage margins are inherently lower than those of insoluble sulphur, which can influence the blended gross margin. Sulphuric acid capacity utilization was at 100% in FY25.

Anti-dumping duties were imposed in June 2025 against imports from Japan and China, with the financial impact expected to reflect in Q2 FY26. Management anticipates a PBT benefit of INR70-80 lakhs per month from these duties. The company aims to increase its domestic insoluble sulphur market share from the current 55% to over 60%. A key concern remains the continued dumping from Malaysia, which is not yet covered by anti-dumping duties and is setting a new low-price benchmark in the Indian market.

OCCL emphasized its focus on cost optimization, particularly in employee costs, and noted a decline in other expenses in Q1 FY26 due to the absence of a one-time^📎 stamp duty payment (INR3.5 crores) from the previous quarter and reduced international freight costs. The company continues to prioritize technology-led innovation and product development, with an R&D team of 12-15 people, to enhance product quality and meet future requirements for next-generation tyres.

The company is actively pursuing sustainability goals, including achieving net-zero carbon by 2050. Initiatives include rooftop solar power generation at both plants and contracting 3.5 MW captive power from Haryana for its Dharuhera plant, expected to start by October. OCCL has also significantly reduced utility consumption by converting from liquid fuel to gas in most operations.

OCCL has no immediate plans for capacity expansion, stating that current capacities are sufficient. The company reduced its total debt by INR11 crores in FY25, with the total debt standing at INR56 crores. The long-term debt component of INR34 crores is planned for repayment within the next two years. Management stated a policy of conserving cash flows to be ready for future market opportunities and potential expansions.

OCCL highlighted its competitive edge in technology, specifically its low-temperature production process for insoluble sulphur, which requires less energy compared to some Chinese high-temperature technologies. While Chinese product quality has improved to be 'as good' as theirs, OCCL continues to focus on improving dispersion and thermal stability for critical tyre performance attributes.