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Pondy Oxides & Chemicals Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

Pondy Oxides delivered its strongest ever Q2 and H1 FY26 performance, driven by operational efficiencies and a focus on value-added products. The company achieved significant growth in revenue, EBITDA, and PAT, alongside robust margin expansion. With zero net debt and healthy cash reserves, POCL is progressing with its lead and copper capacity expansions, while navigating the evolving EPR market and strategically prioritizing segments with better margin visibility.

Highlights

Q2 FY26 Revenue from operations increased to INR 635 crores, up 11% YoY and 6% QoQ.
H1 FY26 Revenue increased to INR 1,231 crores, up 22% YoY.
Q2 FY26 EBITDA increased significantly by 84% YoY to INR 55 crores, with H1 FY26 EBITDA up 83% YoY to INR 98 crores.
Q2 FY26 PAT increased significantly by 105% YoY to INR 36 crores, and H1 FY26 PAT up 98% YoY to INR 63 crores.
PAT margins increased to 5% plus in H1 FY26, up from 3% plus in H1 FY25.
EBITDA per tonne of lead increased by 62% YoY to INR 19,970 per ton on a quarterly basis and 48% YoY to INR 18,510 per ton on half-yearly basis.
Zero net debt and a net cash balance of INR 71 crores, indicating strong financial health.
Phase-1 of lead capacity expansion operated at 50% utilization in Q2 FY26, expected to ramp up to 70% in coming quarters.

Concerns

EPR implementation is still in an 'evolution phase' and not at a 'mature price level', impacting potential revenue from EPR credits.
Aluminum segment is not a major focus due to unhedged margin profile risks, limiting diversification in that area.

Key financials

4 periods

Headline

Exports Share of Revenue
61%

Q2 FY26

Revenue
₹635 Cr
YoY +11% QoQ +6%
EBITDA
₹55 Cr
YoY +84%
PAT
₹36 Cr
YoY +105%
EBITDA Margin
8%
Lead Production
26,308 metric tons
QoQ +9%
EBITDA per tonne Lead
₹19,970/ton
YoY +62%

H1 FY26

Revenue
₹1,231 Cr
YoY +22%
EBITDA
₹98 Cr
YoY +83%
PAT
₹63 Cr
YoY +98%
PAT Margin
5%
Lead Production
50,475 metric tons
YoY +8%
EBITDA per tonne Lead
₹18,510/ton
YoY +48%

Lead H1 FY26

Value-added Products Mix
70%

What they filed

Q1 FY27: revenue up 56.2%, net profit up 28.6% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	572	502	517	596	635 +11%	776 +55%	932 +80%	931 +56%
Expenses	543	477	490	555	581	719	873	876
EBITDA	29	25	27	41	54 +86%	58 +132%	59 +119%	55 +34%
Margin	5%	5%	5%	7%	8%	7%	6%	6%
Other income	1	1	0	2	2	2	1	1
Interest	4	4	2	3	1	2	4	2
Depreciation	3	3	3	4	6	6	5	6
Profit before tax	23	20	22	37	48 +109%	51 +155%	51 +132%	48 +30%
Tax rate	25%	24%	19%	25%	26%	27%	25%	24%
Net profit	17	15	18	28	36 +112%	38 +153%	38 +111%	36 +29%
EPS	2.67	2.16	2.56	3.66	4.66	4.92	4.99	4.75

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

Capex ₹49 Cr
- Lead capacity expansion (Phase-2) ₹20 Cr
- Copper capacity expansion ₹35 Cr
During H1 FY '26, POCL invested around INR 14 crores in capital expenditure and expects to deploy an additional INR 35 crores in the second half of the fiscal. H2 on the lead side, it's approximately INR 20 crores. And in addition to that, another INR 35 crores approximately on the copper side.
Debt Net ₹0 Cr

POCL's balance sheet has strengthened having achieved zero net debt and holding a net cash balance of INR 71 crores.
Liquidity Cash ₹71 Cr

POCL's balance sheet has strengthened having achieved zero net debt and holding a net cash balance of INR 71 crores.

Guidance & targets

Profitability

EBITDA Margins Profitability · long-term · High confidence 8% plus

We are pretty much confident that we will be able to maintain the current margins of 8% and higher, and that's how we are looking at it.

— Ashish Bansal
Gross Margins Profitability · ongoing · Medium confidence 12-14%

In similar levels, we are expecting our gross margins to be in the range of these 12%, 14% of gross margins is what we are expecting.

— Ashish Bansal

Revenue

Top Line Growth Revenue · next 2-3 years · Medium confidence 25%

We are looking at about 25% on the top line numbers.

— Ashish Bansal
Copper Segment Turnover Revenue · FY26 · Medium confidence INR 400 crores

In terms of top line, it should be in the range of close to INR 400 crores.

— Ashish Bansal
Copper Segment Turnover (from new CAPEX) Revenue · post CAPEX completion · Medium confidence INR 900-1,000 crores

From this INR 100 crore CAPEX... We expect in the range of INR 900 crores to INR 1,000 crores top line.

— Ashish Bansal
Aluminum Segment Revenue Revenue · ongoing · Low confidence INR 80-100 crores

it could have small numbers in revenue, could be somewhere maybe about INR 80 crores to INR 100 crores and not too much currently.

— Ashish Bansal

Volume

Lead Sales Volume Volume · FY26 · High confidence 1.2 lakh tons

So, you have guided for 1.2 lakh tons of sales for this year on lead side for the full year, correct? Yes, and equated that to specific top line numbers.

— Ashish Bansal
Lead Volume (H2 FY26) Volume · H2 FY26 · High confidence 70,000 tons

Volumes for lead, the volume we expect is close to 70,000 tons for the next 2 quarters, put together.

— Ashish Bansal

Capacity Utilization

Lead Capacity Utilization (new plant) Capacity Utilization · FY26 · High confidence 60%

Combined peak utilization of the new plant, right? At 60%. For this financial year.

— Ashish Bansal
Lead Capacity Utilization (new plant) Capacity Utilization · FY27 · High confidence 80%

For next year, we are targeting at 80%.

— Ashish Bansal

Capacity

Copper Capacity Capacity · by end of FY27 · High confidence 24,000 tons

So, by end of FY '27, we should be having a capacity of 24,000 tons of this, which will reflect back in FY '28.

— Ashish Bansal

Strategic

Lithium-ion Commercial Entry Strategic · 2027 · Medium confidence 2027

But our guidance for lithium-ion, we are technically looking at somewhere around 2027 to be entering full-fledged into lithium-ion.

— Ashish Bansal

What to watch in Q3 FY26

Lead Capacity Phase-2 Commissioning

H2 FY26

Current Slated for commissioning in H2 FY26, with INR 20 crores CAPEX.

Target Commercial production started from Phase-2.

Why it matters

Phase-2 adds 36,000 metric tons per annum of lead capacity, crucial for future volume growth and overall performance.

Phase-2 is slated for commissioning in the second half of FY '26 with an estimated CAPEX of around INR 20 crores.

Risks & concerns

EPR Market Maturity and Pricing
medium

The EPR implementation is done, but the market is not yet at a mature price level, and the system is still evolving, leading the company to hold EPR credits until better pricing is available.

Management acknowledged
Aluminum Segment Margin Volatility
low

The aluminum alloys market is not directly hedged, posing a risk to maintaining a steady margin profile, which is why the company is not heavily focused on this segment.

Management acknowledged

Q&A highlights

7 direct

Sustainable Gross Margins Direct

In similar levels, we are expecting our gross margins to be in the range of these 12%, 14% of gross margins is what we are expecting.

Analyst inquired about the sustainability of the record-high gross margins (14.5%) achieved in Q2, and management provided a forward-looking range.

Asked by Sagar Shah

Sustainable EBITDA per ton for Lead Direct

I just wanted to confirm that you are saying that we will be able to continue with the current EBITDA per ton that we did for Quarter 2? Yes, we will be able to.

Analyst sought confirmation on the sustainability of the significantly improved EBITDA per ton for lead (INR 19,970) achieved in Q2.

Asked by Saransh Gupta

Seasonality and Q2 Lead Volume Performance Direct

Like we explained that might be a previous year quarter, there were these export shipments that certain BLs where the ship schedules got moved into one particular quarter from the previous quarter. So, the sales was booked in that quarter, even though the shipment was made, because the accounting policy is to take one shipped onboard date. And that is how that particular quarter showed an increase in larger number, which is not comparable.

Analyst questioned a slight YoY degrowth in lead volumes for Q2, and management clarified it was due to accounting for shipping schedule movements in the prior year, not an actual decline.

Asked by Shivam Dave

Lead Volume Target for H2 FY26 Direct

Definitely we'll be able to go on that track. Like I again explained, these numbers also we are specific on taking what kind of orders that we need to take on specific volumes. We are confident on the volume, but we are specific what products we will be taking, which are only margin intensive.

Analyst pressed on the feasibility of achieving the 1.2 lakh tons lead sales target for FY26 given H1 performance, and management reaffirmed confidence, emphasizing a focus on margin-intensive products.

Asked by Shivam Dave

Copper Capacity Expansion and CAPEX Timeline Direct

So, by end of FY '27, we should be having a capacity of 24,000 tons of this, which will reflect back in FY '28.

Analyst sought clarity on the phasing of copper capacity addition and the timeline for achieving the 24,000 tons target, along with associated CAPEX.

Asked by Jigar Jani

Inventory Levels and Sustainability Direct

Now that the volumes are increasing and we are bringing up production, we feel this level of inventory will be sustainable going forward. INR 170 crores to INR 200 crores of inventory is something which we can have as a benchmark going forward.

Analyst questioned the sustainability of current inventory levels given the cash flow, and management provided a benchmark for future inventory management.

Asked by Jigar Jani

EPR Implementation Status and Market Maturity Partial

So, the EPR implementation has been done. And right now, even though the trades are happening, they are still not happening at a mature price level and the whole system is still evolving.

Analyst asked for an update on EPR implementation, and management highlighted that while implemented, the market for EPR credits is not yet mature, impacting monetization.

Asked by Sanket Gupta

Growth in Other Expenses Direct

So, all the general admin and other all expenses, logistics, there is an increase in volume also. When you see in contract wages, you have logistics, you have repairs and maintenance, you have all the general admin, staff, so everything has increased. So, that is one of the main reasons for H1.

Analyst noted a significant increase in other expenses and management attributed it to increased volumes, new plant operations, and associated administrative and logistical costs.

Asked by Harendra Singh

3 min read 7 chapters

Detailed narrative

Strong Q2 and H1 FY26 Financial Performance

Pondy Oxides delivered its strongest ever quarterly and half-yearly performance. H1 FY26 revenue grew 22% YoY to INR 1,231 crores, with EBITDA up 83% YoY to INR 98 crores and PAT up 98% YoY to INR 63 crores. For Q2 FY26, revenue from operations increased to INR 635 crores (up 11% YoY and 6% QoQ), and PAT rose 105% YoY to INR 36 crores, driven by disciplined execution and operational efficiency.

Robust Profitability and Margin Expansion

The company achieved EBITDA margins exceeding 8%, a significant milestone in its value creation journey. EBITDA per tonne of lead increased substantially by 62% YoY to INR 19,970 per ton in Q2 FY26 and 48% YoY to INR 18,510 per ton on a half-yearly basis. Management expressed confidence in sustaining EBITDA margins of 8% plus and gross margins in the 12-14% range, attributing this to operational efficiencies and a focus on value-added products.

Lead Capacity Expansion Progress

The lead capacity expansion at the Thervoy Kandigai plant is well on track. Phase-1, with 36,000 metric tons per annum capacity, operated at 50% utilization in Q2 FY26 and is expected to ramp up to 70% in the coming quarters. Phase-2, also 36,000 metric tons per annum, is slated for commissioning in H2 FY26 with an estimated CAPEX of INR 20 crores. Combined utilization for the new plant is targeted at 60% for FY26 and 80% for FY27.

Aggressive Copper Segment Growth and CAPEX

Pondy Oxides is making significant investments in its copper segment, with INR 35 crores CAPEX planned for H2 FY26 and an additional INR 55-60 crores in FY27, bringing the total copper CAPEX to INR 100-110 crores. This expansion is projected to drive the copper segment's turnover to INR 900-1,000 crores from this CAPEX, with the first product rollout from the new facility expected in H1 FY27. The company aims for 24,000 tons of total copper capacity by the end of FY27.

Strategic Focus on Value-Added Products and Global Reach

The company's strategy emphasizes value-added products, which accounted for approximately 70% of the Lead segment's revenue in H1 FY26. Exports contributed 61% of total revenue, highlighting POCL's strong global footprint. The company's long-term ambition is to achieve a minimum of 20% YoY growth and derive over 60% of its revenue from value-added products.

Healthy Balance Sheet and Future Diversification

POCL maintains a strong balance sheet with zero net debt and a net cash balance of INR 71 crores. The company invested INR 14 crores in CAPEX in H1 FY26 and plans an additional INR 35 crores in H2 FY26. Pondy Oxides is also exploring lithium-ion battery recycling through its interest in ACE Green Recycling, with a target for full-fledged commercial entry into lithium-ion by 2027, following successful R&D and pilot phases.

EPR Implementation and Plastics Unit Relocation

The Extended Producer Responsibility (EPR) implementation is complete, but the market for EPR credits is still evolving and not yet at a mature price level. The company is holding its EPR credits and plans to sell them once sustainable pricing is established. Additionally, the relocation of the plastics unit to its own premises is underway, targeting completion before the end of Q3 FY26, which will enable ABS compounding and other value-added product manufacturing in Q4 FY26.

This is an AI-generated summary of a publicly available earnings call transcript.

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