PCBL Chemical Q1 FY27 earnings call

PCBL Chemical Limited delivered a robust Q1 FY27, with consolidated revenue growing 17% year-on-year to INR2,474 crores. This was accompanied by a 23% year-on-year increase in EBITDA to INR400 crores and a significant 65% rise in Profit After Tax to INR155 crores. The strong performance was partly attributed to effective monetization of spot market exposure as crude prices rose sharply, capturing strong realizations, and a 23% year-on-year growth in specialty sales volume to 19,748 tons.

Despite strong overall performance, export realizations were temporarily impacted by elevated freight costs, leading PCBL to strategically divert a portion of its international volumes to the domestic spot market. This deliberate action aimed to optimize blended margins, as domestic market margins were more attractive. International sales volume stood at 50,528 tons, while domestic sales volume grew 15% year-on-year to 102,985 tons, reflecting this strategic shift.

The company made significant strides in its advanced battery materials business, with the Nanovace pilot plant in Palej progressing towards customer sampling in August. A 1,000 metric ton per annum super-conductive specialty black facility is also being set up in Palej. Furthermore, the 20,000 MTPA specialty black line in Mundra was commissioned in Q1 FY27, increasing PCBL's total carbon black capacity to 900,000 metric tons per annum and strengthening its position in the global market.

Aquapharm reported sales volumes of 22,985 metric tons, revenue of INR394 crores, and EBITDA of INR47 crores in Q1 FY27. While the oil and gas segment saw a 35% year-on-year decrease, it showed a 50% sequential growth. The new CEO, Mr. Rohit Narang, expressed optimism for Aquapharm's future, focusing on volume growth, new product launches in phosphonates and water treatment, and expanding presence in regions like Saudi Arabia for reverse osmosis solutions, despite some near-term volatility in the oil and gas segment.

PCBL is actively pursuing a cost optimization and efficiency program, targeting INR200-250 crores in savings over the next 4-6 quarters through feedstock diversification and process enhancements. For FY27, the company anticipates a total capex of approximately INR300 crores (+/- INR50 crores), with strategic capex limited to about INR100 crores. The greenfield expansion at the Andhra facility is expected to incur most of its expenses in the next fiscal year, rather than the current one.

Management highlighted three structural tailwinds: India's strengthening trade architecture (India-U.S. trade deal, India-EU FTA, CETA, EFTA), lower tariffs for Indian carbon black in the U.S. market compared to Asian/Middle Eastern origins, and tightening global supply chains due to reduced Russian carbon black feedstock and exports. These factors are expected to create durable opportunities for PCBL in Europe, the Americas, and other premium markets, supporting both volume and margin growth.