OCCL — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

OCCL Limited reported a robust Q3 FY26 with total income growing 19% YoY to INR 114.6 crores and PAT increasing 25% YoY to INR 6.5 crores, driven by a favorable domestic environment and anticipated reduction in US tariffs. However, the company faces challenges from all-time high Sulphur prices and a market supply glut, which are impacting margins and making it difficult to fully pass on increased raw material costs. OCCL is aggressively pursuing domestic market share growth and expects the Indian tyre industry to grow by 7-8% in FY26.

Highlights

  • Strong Q3 FY26 total income growth of 19% YoY to INR 114.6 crores.

  • EBITDA grew 25% YoY to INR 20.2 crores in Q3 FY26, with margins expanding to 17.6%.

  • PAT increased by 25% YoY to INR 6.5 crores in Q3 FY26.

  • Favorable domestic operating environment due to anti-dumping duties on imports from Japan and China, and strong Indian automobile industry performance.

  • Reduction in US tariffs from 50% to 18% is expected to aid margins over time, though not yet implemented.

Concerns

  • All-time high Sulphur prices are affecting margins, with prices having doubled since August 2025, making full cost pass-through difficult.

  • 9M FY26 results are not comparable year-on-year due to the demerger of the chemical business of AG Ventures Limited effective July 1, 2024.

  • A supply glut in the market and intense competition limit the ability to fully pass on raw material price increases.

  • US tariffs on exports are still in place, leading to 25% discounts to maintain supply.

Key financials

2 periods

Q3 FY26

  • Total Income
    ₹114.6 Cr
    YoY +19%
  • EBITDA
    ₹20.2 Cr
    YoY +25%
  • EBITDA Margin
    17.6%
  • PAT
    ₹6.5 Cr
    YoY +25%

9M FY26

  • Total Income
    ₹358.7 Cr
  • EBITDA
    ₹67.1 Cr
  • EBITDA Margin
    18.7%
  • PAT
    ₹28.4 Cr

What they filed

Q1 FY27: revenue up 133.3%, net profit up 425.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue32 30 28 21 30 −6%31 +3%25 −11%49 +133%
EBITDA5 4 3 3 2 −60%2 −50%1 −67%26 +767%
Net profit1 2 2 4 1 +0%2 +0%1 −50%21 +425%
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.

Capital allocation

high confidence
  • Debt Debt disclosed
    The long-term debt as of now is INR22.75 crores. And other than that, we have the CC, working capital, which of course keeps going up and down. Range of between INR30 and INR40 crores.

Guidance & targets

Volume

  • Indian Tyre Industry Growth Volume · FY '26 · High confidence 7% to 8%
    The Indian tyre industry is expected to grow by 7% to 8% in FY '26.

    — Akshat Goenka

  • Volume Growth Volume · next quarter · High confidence not looking at any significant increase
    See, the volumes have been stable. We have neither increased the volume and the next quarter also we are not looking at any significant increase in volumes.

    — Anurag Jain

Capacity

  • Capacity Utilization Capacity · current quarter · High confidence around 70%
    So the capacity utilization is around 70%.

    — Anurag Jain

  • Capacity Utilization Capacity · FY'27 · Medium confidence some increase
    FY'27 we do expect some increase, obviously, but it's very difficult to say just now how much because the things will crystallize more in the month of May-June.

    — Anurag Jain

What to watch in Q4 FY26

US Tariff Rollback Status

Next quarter (expected soon)
Current Still subject to 50% tariff, causing 25% discounts.
Target Tariffs officially rolled back, leading to reduced discounts and improved export margins.

Why it matters

The removal of US tariffs is expected to significantly improve export profitability and overall margins.

No, it's not been notified. So we don't know which date it will be notified. It could happen in 5 days.

Risks & concerns

  • High Sulphur Prices

    high

    All-time high Sulphur prices, which have doubled since August 2025, are significantly affecting margins and making full cost pass-through difficult.

    Both acknowledged

  • Ongoing US Tariffs on Exports

    high

    US exports are still subject to 50% tariffs, forcing the company to offer 25% discounts, negatively impacting export margins.

    Both acknowledged

  • Supply Glut and Intense Competition

    medium

    A global supply glut, with capacity utilization at 70-75%, limits pricing power and makes it challenging to pass on raw material cost increases.

    Both acknowledged

  • Aggressive Malaysian Imports

    medium

    Malaysia continues to play aggressively in the Indian market, affecting prices and leading the company to consult lawyers for potential action.

    Management acknowledged

Q&A highlights

5 direct
Sulphur price impact and cost pass-through strategy Partial
The only way we can pass it on is if the competition also increases the price. We think that looking at the Sulphur price increase as temporary, the competition might have not increased the prices as yet. But now since it has been a rather long period of price increase, we feel that it will be difficult for even the competition to absorb the price and they are bound to increase prices, which should help us.

Addresses the core challenge of rising raw material costs and the company's limited pricing power in a competitive market.

Asked by Aditya Khetan

US tariffs and export market outlook Partial
Yes. When the American tariff was increased, we had to give deep discounts to maintain our supply to America, which affected our margins. But since the tariffs have been rolled back significantly, so will our discounts be rolled back. Even though our tariffs are at advantage vis-a-vis China, but in America, most of the supply of insoluble Sulphur is local from American plants. So it does not depend on tariffs.

Clarifies the ongoing impact of US tariffs on export margins and the expectation of future relief, while also noting local competition.

Asked by Aditya Khetan

Quantitative impact of US tariffs on EBITDA Partial
So see, when the tariffs have gone from 0% to 50%, so you can very well imagine to maintain the same price, we have had to give discounts in the American market in the range of 25%.

Provides a specific figure (25% discount) for the margin impact due to US tariffs, indicating significant potential upside if tariffs are removed.

Asked by Riddhesh Gandhi

Supply glut and potential multi-year margin compression Direct
See, the current capacity utilization levels around the world are between 70% to 75% as per our reckoning. And if we are looking at, say, around 2% to 3% growth globally in the demand of insoluble sulphur, and if we think that 85% capacity utilization is a healthy capacity utilization, so we can do the math as to see how many maybe 4-5 years of this.

Confirms the existence of a supply glut and provides context on global capacity utilization, suggesting a prolonged period of competitive pressure.

Asked by Riddhesh Gandhi

Anti-dumping duty benefit negated by Sulphur price surge Direct
Yeah, so basically I would say that the ADD impact has kept our margins intact in spite of insoluble -- in spite of sulphur prices going up. So our contribution has not improved, but at least it has remained stable. Had ADD not been there, then our contribution would have been really badly hit.

Explains how the benefit from anti-dumping duties, intended to improve margins, has been offset by the sharp increase in Sulphur prices.

Asked by Aditya Khetan

Domestic realization post-ADD implementation Direct
See, the ADD that was imposed was in the tune of about $300, right? $300 odd dollars. And therefore, the impact is not exactly $300 because material is coming from Malaysia, Japan, and China. But at an average, we were able to get increase in selling price in terms of rupees, say around $200 plus-minus from that time.

Quantifies the actual price increase achieved in the domestic market due to ADD, which was less than the full ADD amount but helped mitigate raw material costs.

Asked by Anubhav Mukerjee

Aggressive imports from Malaysia and potential government action Direct
Malaysia also continues to play aggressively in the Indian market. And their prices are also affected by the Chinese prices. We had planned to go against Malaysia, and we are under consultation with our lawyers for the same and let us see what takes place.

Highlights an ongoing competitive threat from Malaysian imports and the company's proactive steps to address it.

Asked by Anubhav Mukerjee

Relative profitability of exports versus domestic sales Direct
Yes, if you look at it on the overall average, we still make more margins on exports.

Provides insight into the company's business mix strategy, confirming that exports, despite tariff challenges, remain more profitable on average.

Asked by Anubhav Mukerjee

2 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

OCCL Limited reported a robust Q3 FY26, with total income growing 19% year-on-year to INR 114.6 crores, up from INR 96.5 crores in Q3 FY25. EBITDA saw a 25% increase, reaching INR 20.2 crores with a margin of 17.6%. Profit After Tax also grew by 25% to INR 6.5 crores, reflecting strong operational performance despite challenging raw material conditions.

9M FY26 Financial Performance and Comparability

For the nine months ended December 31, 2025, OCCL recorded a total income of INR 358.7 crores and an EBITDA of INR 67.1 crores, resulting in an EBITDA margin of 18.7%. PAT for the period stood at INR 28.4 crores with a margin of 7.9%. Management noted that these 9M figures are not directly comparable year-on-year due to the demerger of AG Ventures Limited's chemical business, which became effective on July 1, 2024.

Favorable Domestic Operating Environment

The company benefited from a supportive macro environment, including strong growth in automobile sales in calendar year 2025 driven by factors like GST reduction and income tax reductions. The imposition of anti-dumping duties on imports from Japan and China, combined with the robust performance of the Indian automobile industry, has created an increasingly favorable domestic market. This positions OCCL well to pursue its strategic objective of growing domestic market share.

Challenges from High Sulphur Prices

All-time high Sulphur prices, which have doubled since August 2025, are significantly impacting the company's margins. While some cost pass-through has been achieved in the domestic market, international markets remain challenging. Management expects either Sulphur prices to decline or competition to eventually raise prices, which would alleviate margin pressure, as it is difficult for competitors to absorb these sustained high prices.

US Tariffs and Export Market Dynamics

Exports to Europe remain stable and constructive. However, the US market faces ongoing challenges due to tariffs, which are currently still in place despite expectations of a reduction from 50% to 18%. To maintain supply, the company has had to offer deep discounts, in the range of 25%, significantly affecting export margins. Management is looking at the export market with renewed vigor once tariffs are officially rolled back.

Market Share Strategy and Competitive Landscape

OCCL is aggressively pursuing an increase in domestic market share, leveraging the favorable operating environment. However, a prevailing supply glut in the market, with global capacity utilization at 70-75% (compared to a healthy 85%), makes it difficult to fully pass on raw material price increases. The company is also addressing aggressive pricing from Malaysian imports, which are affecting prices, and is consulting lawyers for potential action against them.

Debt Position and Capital Allocation

The company's long-term debt stands at INR 22.75 crores. Additionally, working capital facilities (CC) are typically in the range of INR 30-40 crores. Management confirmed there are no current plans for a share buyback, indicating a focus on operational performance and market share growth rather than immediate shareholder returns through buybacks.

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