Privi Speciality Chemicals Limited

Privi Speciality Chemicals delivered a strong financial performance in Q3 and 9M FY26. Total income for Q3 FY26 grew 25% year-on-year to ₹611.15 crores, while 9M FY26 income increased 24% year-on-year to ₹1,857 crores. EBITDA for Q3 FY26 surged 37% year-on-year to ₹158 crores, resulting in a healthy EBITDA margin of 25.83%. For the nine-month period, EBITDA grew 47% year-on-year to ₹481 crores, with a margin of 25.9%. Adjusted PAT for Q3 FY26 was ₹82 crores, a significant increase from ₹44 crores in the previous year, and for 9M FY26, it reached ₹232 crores, up 84% year-on-year.

The company is actively implementing a clearly defined 3-phase expansion roadmap with a total capital expenditure of ₹1,200 crores over the next 3 years. Phase 1, focused on increasing production capacity for existing products from 48,000 metric tons to 54,000 metric tons, is on schedule for commercialization by March/April 2026. Phases 2 and 3 are dedicated to multi-speciality aroma chemicals, which will add approximately 18,000 metric tons of new capacity. This expansion is crucial for achieving the long-term vision of ₹5,000 crores in revenue and ₹1,000 crores in EBITDA within 3-4 years.

The joint venture with Givaudan, Prigiv, is progressing well and achieved positive EBITDA in Q3 FY26. Management expects Prigiv to achieve net profit in the next financial year, bolstered by a significant ₹150 crores noninterest-bearing trade advance from Givaudan, which will reduce the JV's debt burden and interest costs. An additional ₹50 crores capex for new product manufacturing within Prigiv is being funded through equity infusion (51% Privi, 49% Givaudan).

Privi is investing in biotechnology and new product development, particularly focusing on converting biomass into value-added products. The company is developing Cyclopentanone from renewable resources, aiming to scale production from 500 tons to 5,000 tons within the next two years. Furthermore, a corn cob project, targeting a 20,000-ton production level, is in the laboratory stage with plans for a commercial launch by 2028. These initiatives are expected to generate substantial intellectual property and drive future growth beyond current targets.

The company's ability to maintain strong EBITDA margins, consistently above 20% and over 25% in recent quarters, is attributed to continuous improvements in process yields, reduction in operating costs, and benefits from economies of scale. Management anticipates further gross margin improvement of 100-200 basis points through ongoing R&D and optimization of utility consumption. Privi also expects to benefit from favorable trade arrangements between India, the US, and Europe, and its EcoVadis platinum rating, which could provide duty advantages in export markets.

Privi maintains a conservative approach to debt, with a current gross debt of approximately ₹1,000 crores and a net debt to EBITDA ratio of around 1.6x, well below its target of not exceeding 2.5x. The company plans to fund its ₹1,200 crores capex program primarily through internal accruals and bank borrowings, with management confident that equity dilution will not be necessary. This strategy ensures financial stability while supporting ambitious growth plans.

The amalgamation of Privi Fine Sciences Private Limited and Privi Biotechnologies Limited with Privi Speciality Chemicals Limited is currently in process, with regulatory filings submitted to the stock exchanges. This merger is expected to be completed by October/December 2026, pending NCLT approval. Post-merger, Privi Fine Science is projected to contribute approximately ₹400 crores in revenue, further enhancing the company's scale and product portfolio.