OCCL

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.

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.

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.

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.

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.

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.

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.