Privi Speciality Chemicals Limited

Privi Speciality Chemicals delivered an exceptional financial performance in Q2 and H1 FY26. Total income for Q2 reached ₹678.82 crores, marking a 26% year-on-year growth, while H1 income grew 24% to ₹1,246.08 crores. EBITDA for Q2 surged by 59% YoY to ₹182.14 crores, achieving a record-high margin of 26.83%, and H1 EBITDA grew 53% YoY to ₹323.19 crores. Profit After Tax for H1 FY26 significantly increased by 94% YoY to ₹147.76 crores, reflecting strong operational leverage and value addition.

The company's growth was primarily driven by volume increases in flagship products (17% of H1 revenue growth) and contributions from newly introduced products (8-10% of H1 revenue growth). Privi is on track to increase its production capacity from 48,000 metric tons to 54,000 metric tons, with an additional 6,000 MT expected to be operational by December 2025, contributing to growth from January 2026. This expansion is part of a broader CAPEX plan aimed at achieving ₹5,000 crores in revenue and ₹1,000 crores in EBITDA within the next three to four years.

Privi's sustained improvement in EBITDA margins, consistently above 20% for the past 10 quarters, is attributed to operational excellence initiatives. These include process yield improvements, lower operating costs, optimal manpower utilization, and the ongoing benefits of backward integration. The company aims to maintain EBITDA margins between 24% and 26%, which includes the impact of state incentives received from Gujarat and Maharashtra governments, totaling approximately ₹9 crores in H1 FY26.

The company received the first prize at IFEAT 2025 for advanced bio-based aroma ingredient solutions and a Platinum rating from EcoVadis for ESG excellence, placing it among the top 1% globally. Privi is actively diversifying its product portfolio, with a robust pipeline of new products expected to be operational within the next 15 months. The strategy aims to reduce dependency on any single product, targeting a maximum contribution of 10% per product, and includes specialty molecules for industries beyond F&F, such as pharma and electronic chip manufacturing.

Privi demonstrated effective capital management by improving its net working capital cycle from 136 days in March 2025 to 124 days by September 2025, aligning with its target of 120-125 days. The company also reduced its overall debt by ₹44 crores, bringing the net debt down to ₹1,020 crores as of September 2025. This focus on financial discipline supports its growth ambitions while maintaining a healthy balance sheet.

Management highlighted a 'China plus One' shift, where European and developed nations are increasingly preferring sustainable Indian vendors like Privi, especially given its backward integration. This trend, coupled with increasing demand for fragrance-oriented products in India due to changing lifestyles, is driving robust growth. The company also noted that competition from China, particularly for products like Camphor, has a minimal impact, as Camphor constitutes less than 3-4% of Privi's overall sales.