Pondy Oxides

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.

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.

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.

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.

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.

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.

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.