PCBL Chemical

PCBL Chemical faced significant challenges in Q4 FY26 due to the West Asia conflict, which escalated in February. This led to massive increases in logistics costs, feedstock prices, and issues with ship availability, impacting the 40% of business driven by exports. Raw material prices, particularly crude, rose sharply from $60 to $100 per barrel, currently hovering around $120 per barrel. Despite these pressures, the company proactively rerouted shipments to alternate geographies to ensure supply continuity, and customers were considerate in sharing increased costs.

Management noted clear signs of recovery, with spreads finding a floor and positive exit quarter momentum. The rationalization of U.S. tariffs has restored a meaningful cost advantage for Indian exports, and customer pipelines in the specialty business are firming up. PCBL added 90,000 tons of carbon black capacity, bringing total installed capacity to 880,000 tons per annum. The company expects both domestic and export growth in coming quarters, with domestic sales volume growing 21% YoY to 105,055 tons in Q4 FY26, contributing to an overall 8% YoY increase in consolidated sales volume to 161,865 MT.

The Aquapharm segment reported Q4 FY26 revenue of INR 339 crores and EBITDA of INR 29 crores, with full-year FY26 revenue at INR 1,443 crores and EBITDA at INR 162 crores. The segment faced headwinds from slower infrastructure activity and LPG supply disruptions, but home care sales volumes grew 11% YoY and application-specific solutions grew 18%. Management anticipates a strong top-line growth of 20-25% for Aquapharm in FY27, aiming for an EBITDA run rate of INR 75 crores per quarter within the next 2-3 quarters, driven by increased capacity utilization and recovery in the oil & gas business.

The pilot plant for Nanovace, PCBL's battery chemicals platform, is fully equipped and ready for commissioning, with commercial volumes expected by FY28 after a validation period. This represents a significant diversification opportunity into a high-growth, high-margin segment. Furthermore, cost reduction initiatives, focusing on yield improvement, throughput enhancement, and feedstock diversification, are on track to deliver INR 200-250 crores in savings over the next 4-6 quarters, which will significantly enhance future profitability and operational efficiency.

PCBL successfully reduced net borrowings by INR 454 crores to INR 4,536 crores during FY26, even while funding INR 750 crores of capex. The 90,000 tons Brownfield expansion for rubber carbon black in Tamil Nadu is complete, contributing to the increased capacity. However, the commissioning of the 1,000 MTPA superconductive specialty black line at Palej was delayed due to gas shortage, while the 20,000 tons specialty black line in Mudra is ready for commissioning in the coming weeks, indicating ongoing capacity additions.