Rossari Biotech Limited

Rossari Biotech commenced FY27 with its highest ever quarterly revenue of ₹697.2 crores, marking a robust 28% YoY growth. This performance was broad-based, with the Home, Personal Care and Performance Chemicals (HPPC), Textile Specialty Chemicals (TSC), and Animal Health and Nutrition (AHN) segments all growing by approximately 28% YoY. Notably, the HPPC business alone surpassed a ₹550 crore quarterly revenue milestone, reflecting increasing scale and market presence. International business also contributed significantly, with exports growing 21% YoY and maintaining a share of 23-25% of total revenue.

Despite strong top-line growth, EBITDA margins saw a compression, standing at 11.6% in Q1 FY27 compared to 12.5% in the prior year. This was primarily attributed to the subdued performance of the institutional and consumer businesses, raw material price volatility, and increased freight costs. To counter this, management is actively rationalizing lower-margin businesses, including exiting the B2C segment (while retaining the more profitable institutional cleaning products), a move expected to release 2-3% EBITDA and contribute to a long-term target of 15% EBITDA margin for the core B2B operations.

The company reported improved utilization across its expanded manufacturing capacities, which supported both revenue and EBITDA growth. New products and innovations, such as biosurfactants, NMMO, MDEA, spray-cooled powders, fibre finishes, and the recently operational vitamin premix plant, are now contributing significantly to the top line. The pharma business, a high-value segment, is projected to achieve ₹70-75 crores in revenue this year, with a ramp-up expected by Q2/Q3 FY27 following the completion of compliance activities.

Rossari strengthened its international footprint by commissioning a greenfield blending plant in Thailand, which contributed ₹2-3 crores in Q1 FY27 and is expected to ramp up in subsequent quarters. This ₹10-15 crore investment aims to enhance customized formulations and supply chain efficiency in Southeast Asia. Additionally, the company is progressing with its Saudi Arabia venture, which, despite geopolitical uncertainties, remains a strategic priority for long-term growth, with production expected to commence about 1.5 years after the final announcement.

The company maintained a healthy balance sheet, with net debt reducing to ₹248 crores in Q1 FY27 from ₹280 crores in March. Interest costs increased as capitalized term loans from previous capex cycles began to reflect in the P&L, with a projected run rate of ₹9-10 crores. Capital expenditure for the current and next fiscal year will be calibrated, focusing on optimizing existing capacity utilization and targeted investments in new products and R&D, rather than large greenfield projects. Non-core assets, including the sale of the Andheri office for ₹10.5 crores, were monetized to redeploy capital to higher-return areas.