Rain Industries Limited — Q3 FY26 earnings call

Call held 9 Mar 2026

Management summary

Rain Industries reported positive net income for the third consecutive quarter and a stepwise improvement in EBITDA for CY 2025. The company's Net-Debt-to-EBITDA ratio improved significantly, and it anticipates further deleveraging in 2026 with a planned capex of $60-65 million. While facing challenges such as a non-recurring write-off from a German JV insolvency and deferred cement expansion, Rain Industries remains confident in its outlook, driven by strengthening global aluminium demand and strategic capital allocation.

Highlights

  • Positive net income for the third consecutive quarter, reflecting discipline and focus on operational efficiency.

  • EBITDA rose from 14,981 Million Rupees in CY 2024 to 22,749 Million Rupees in CY 2025.

  • Net-Debt-to-EBITDA improved from ~3.9x in December 2024 to ~3.2x in December 2025, with further improvement anticipated.

  • Indian calcination plants operating at ~90% capacity or higher due to improved raw-material availability and strong domestic demand.

  • Capex expected to increase moderately to between 60 million and 65 million US Dollars in 2026, prioritizing mandatory investments and growth.

Concerns

  • A non-recurring write-off covering outstanding receivables and equity stake in a German joint venture due to insolvency.

  • Carbon distillation volumes were lower than expected in Q4 2025 due to customer-related outages and delayed shipments.

  • Brownfield expansion in the Cement segment was deferred due to intensified competition and muted demand in South India.

Key financials

  1. Net Working Capital ₹39,991 Mn +52.3%YoY
  2. EBITDA ₹22,749 Mn +51.8%YoY
  3. Capex 53 million us -32%YoY
  4. Net-Debt-to-EBITDA 3.2×
  5. OCI Movement ₹8.8 Bn

What they filed

Q1 FY27: revenue up 17.4%, net profit up 310.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,934 3,676 3,768 4,401 4,476 +14%4,301 +17%4,521 +20%5,167 +17%
EBITDA216 346 380 629 627 +190%501 +45%697 +83%964 +53%
Net profit-155 -134 -115 83 130 +184%38 +128%158 +237%341 +311%
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.

Segment breakdown

  • Carbon plants (full segment)
    70% Utilization
  • Advanced Materials
    60% Utilization
  • Cement operations
    65% Utilization

Capital allocation

high confidence
  • Capex US DOLLARS 60 Mn
    • Mandatory investments, safety and environmental compliance, and essential maintenance
    Looking ahead to 2026, we expect capex to increase moderately to between 60 million and 65 million US Dollars. This spend will continue to prioritize mandatory investments, safety and environmental compliance, and essential maintenance required to ensure the reliability of our operations.
  • Debt 3.2× EBITDA
    • Repayment Prepayments on Term Loan B during 2023 and 2024, covering scheduled amortization through September 2026. EURO 80 Mn
    • Repayment Repaid senior secured notes that matured in April 2025. DOLLARS 44 Mn
    Net-Debt-to-EBITDA, which has improved from about 3.9x in December of 2024 to about 3.2x in December 2025.

Guidance & targets

Capex

  • Total Capex Capex · 2026 · High confidence 60 million to 65 million US Dollars
    Looking ahead to 2026, we expect capex to increase moderately to between 60 million and 65 million US Dollars.

    — Srinivasa Rao

Revenue Mix

  • Revenue from Aluminium Industry Revenue Mix · 2026 · High confidence More than 50%
    Based on our current projections, more than 50 percent of RAIN's revenue in 2026 is likely to be driven by the aluminium industry.

    — Jagan Nellore

Working Capital

  • Working Capital Trend Working Capital · H1 2026, H2 2026 · Medium confidence Rise further in H1 2026, then corresponding release in H2 2026
    Looking ahead, we expect working capital to rise further during the first half of 2026, largely due to timing effects associated with India's GPC import-quota allocations. However, we anticipate a corresponding release of working capital in the second half of 2026 as these timing dynamics normalize.

    — Srinivasa Rao

Debt

  • Net-Debt-to-EBITDA Debt · 2026 · Medium confidence Further improvement
    We do anticipate further improvement in our Net-Debt-to-EBITDA ratio, as our earnings trajectory continues to strengthen and our cash-generation profile improves.

    — Srinivasa Rao

New CTP Facility

  • Start-up of distillation project in India New CTP Facility · Q4 2027 · High confidence Start-up
    We are working toward a targeted start-up in the fourth quarter of 2027.

    — Jagan Nellore

Market context

  • Global calcination operations utilization rate Capacity · H2 2026 · Medium confidence Increase from ~70%
    Looking at our calcination operations globally, we are currently running at about 70 percent of total capacity. We expect this utilization rate to increase in the second half of 2026 as market conditions continue to normalize, raw-material flows improve, and demand across our customer base strengthens.

    — Gerard Sweeney

What to watch in Q4 FY26

Global Calcination Operations Utilization Rate

H2 2026
Current ~70%
Target Increase

Why it matters

Indicates recovery in the core Carbon segment and overall market conditions, impacting revenue and profitability.

Looking at our calcination operations globally, we are currently running at about 70 percent of total capacity. We expect this utilization rate to increase in the second half of 2026 as market conditions continue to normalize, raw-material flows improve, and demand across our customer base strengthens.

Risks & concerns

  • Geopolitical Hostilities & Energy Market Volatility (Middle East)

    high

    Escalation of geo-political hostilities in the Middle East has immediate and significant impact on global energy markets, energy costs, natural gas, crude trade flows, and GPC availability/quality, though RAIN's diversified footprint provides resilience.

    Management acknowledged

  • Competition and Muted Demand in Cement Segment

    medium

    Intensified competition from large pan-India players and muted consumption due to extended monsoon and slow infrastructure projects led to deferral of brownfield expansion.

    Management acknowledged

  • Raw Material Price Volatility & Margin Pressure (GPC/CPC)

    medium

    Growing demand from Battery Anode Material (BAM) industry for low-sulphur GPC has driven up GPC prices, but calciners are constrained in immediately passing these costs to CPC customers, creating temporary margin pressure.

    Management acknowledged

Q&A highlights

8 direct
Indonesian Aluminium Market & Middle East Dynamics Direct
Indonesia is one of the world's growing aluminium markets, but it is also highly competitive and currently well supplied with carbon from Chinese producers. We are continually developing relationships with new and existing customers there who value consistent quality, technical support, and long-term supply reliability. ... Geo-political hostilities have escalated sharply, and this has had an immediate and significant impact on global energy markets.

Provides insight into key growth markets and the significant geopolitical risks impacting supply chains and energy costs, which could affect RAIN's operations.

Asked by Sarang

US Aluminium Smelter Revival & Carbon Costs Direct
the U.S. has recently seen a series of announcements related to aluminium industry expansion, both through increased utilization at existing smelters and the planned construction of the first greenfield smelter in the country in several decades. All this new and expanded capacity will rely on carbon anodes, which require CPC

Highlights a significant demand driver for RAIN's products in a key market and addresses the sustainability of these expansions despite rising energy costs, which is crucial for RAIN's sales outlook.

Asked by Sarang

Chinese CPC Exports & Pricing Trends Direct
the primary driver behind the increase in GPC prices is the growing demand from the Battery Anode Material (or, BAM) industry. The BAM sector continues to expand rapidly as electric-vehicle and energy-storage markets scale up, and this has created significant new competition for low-sulphur GPC

Explains the underlying structural shift in GPC demand and pricing, indicating a new competitive landscape for RAIN's raw material sourcing and impacting its margins.

Asked by Sarang

Carbon Distillation Volume Decline in Q4 2025 Direct
Our carbon distillation volumes in the fourth quarter of 2025 came in lower than expected due to a combination of customer-related factors. The largest impact came from an unplanned outage at one of our major customers' smelters, which temporarily curtailed their ability to take product.

Clarifies the specific operational challenges that led to lower volumes in a key segment, suggesting temporary disruptions rather than systemic issues.

Asked by Sarang

Energy Storage Materials Strategy & Capex Direct
RAIN views energy storage as a critical pillar of the future energy landscape. It enables on-demand access to green energy, helps balance intermittent renewable power sources... any investment we pursue will be backed by a corresponding supply agreement to ensure commercial viability from day one.

Outlines the company's strategic focus on a high-growth area and its disciplined approach to investment, ensuring commercial viability for new ventures.

Asked by Sarang

Delay in Cement Segment Expansion Direct
Following the recent consolidation in the South Indian cement market, the large pan-India players have been actively leveraging their well-established national brands through the dealer networks they acquired in the region. This has intensified competition, particularly in retail channels... Given these market dynamics, we made the prudent decision to defer our brownfield expansion.

Explains the rationale behind deferring a significant capex project, highlighting competitive pressures and demand softness in a key segment, impacting future growth plans.

Asked by Sarang

Working Capital Requirements Going Forward Direct
Over the past 12 months, our working capital requirements have increased significantly by approximately 13,729 Million Rupees... Expect working capital to rise further during the first half of 2026, largely due to timing effects associated with India's GPC import-quota allocations. However, we anticipate a corresponding release of working capital in the second half of 2026 as these timing dynamics normalize.

Provides a clear outlook on working capital trends and the factors influencing them, which is crucial for assessing the company's cash flow and liquidity management.

Asked by Sarang

Receivable Write-off from German JV Direct
RAIN holds a minority stake in a German joint venture operating in the chemical sector... the joint venture experienced significant financial stress due to conditions specific to its business and ultimately had to file for insolvency... we recognized a write-off covering both the outstanding receivables and our equity stake. This is a non-recurring accounting impact and does not affect our ongoing operations or customer relationships in Europe.

Addresses a specific non-recurring financial event, clarifying its nature and limited impact on ongoing operations, reassuring investors about its isolated nature.

Asked by Sarang

3 min read 8 chapters

Detailed narrative

Q4 2025 Performance and Outlook

Rain Industries reported positive net income for the third consecutive quarter, with EBITDA rising significantly from 14,981 Million Rupees in CY 2024 to 22,749 Million Rupees in CY 2025. This improvement reflects the company's disciplined approach to operational efficiency and cost management. The Net-Debt-to-EBITDA ratio also improved from approximately 3.9x in December 2024 to 3.2x in December 2025, and management anticipates further improvement in 2026, supported by strengthening global aluminium demand.

Carbon Segment Operations and Market Dynamics

The company's Indian calcination plants are operating at approximately 90% capacity, contributing to a global calcination utilization rate of about 70%, which is expected to increase in H2 2026. However, carbon distillation volumes in Q4 2025 were lower than expected due to customer-related outages and delayed shipments. The primary driver for increased GPC prices is the growing demand from the Battery Anode Material (BAM) industry, creating new competition for low-sulphur GPC and leading to temporary margin pressure on calciners due to a lag in passing costs to CPC customers.

Advanced Materials Segment Challenges

The Advanced Materials segment experienced seasonal lower volumes in Q4 2025. The Resins business faced pressure from higher energy costs in Europe and increased pricing competition from Asian suppliers, resulting in a challenging margin environment. Additionally, the Chemical Intermediates business was impacted by a significant decline in crude benzene quotations during 2025, leading to inventory valuation losses. These headwinds are attributed to well-understood market factors and seasonal trends.

Strategic Focus on Energy Storage Materials

Rain Industries is strategically positioning itself in the energy storage market, viewing it as a critical pillar for future growth. The company is leveraging its coating technologies and specialty products, particularly in North America, where it has established a demonstration facility in Canada. In 2025, Rain also commenced selling mesophase carbon microbeads (MCMB) in the North American market through a distribution agreement, expanding its participation in the energy-storage materials space with a high-value product line.

Cement Segment Expansion Deferred

The company has made a prudent decision to defer its brownfield expansion in the Cement segment. This deferral is attributed to intensified competition in the South Indian cement market, driven by large pan-India players, and muted consumption levels due to extended monsoon conditions and slower-than-expected progress on infrastructure projects. Management plans to optimize the project's cost structure in the interim and will share revised timelines once market conditions become more conducive.

Working Capital and Debt Management

Net working capital increased significantly by approximately 13,729 Million Rupees in 2025, rising from 26,262 Million Rupees in December 2024 to 39,991 Million Rupees in December 2025. This increase was primarily driven by higher finished-goods and raw-material prices, alongside new working capital needs from the ramp-up of the Carbon segment's SEZ facility. The company repaid approximately 132 million dollars of principal over the last three years, including 44 million dollars of senior secured notes in 2025, and has no plans to raise equity in 2026.

Geopolitical and Currency Impact

Rain Industries acknowledges the significant impact of escalating geopolitical hostilities in the Middle East on global energy markets and supply chains, but asserts that its diversified global footprint provides operational resilience. US tariffs do not materially impact operations as key materials and products are exempt. The company's currency risk profile is managed through natural hedges, with long-term debt in USD and Euro, and Indian CPC pricing adjusting to INR/USD exchange rates, resulting in minimal material impact on overall business performance.

Non-Recurring Write-off from German JV

The company recognized a non-recurring write-off covering outstanding receivables and an equity stake in a German joint venture that filed for insolvency. This was due to the JV experiencing significant financial stress and its inability to recover amounts owed for past product deliveries. Management stated this is a contained accounting impact with limited effect on ongoing operations or customer relationships in Europe, and no disruption to production or sales channels.

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