Rossari Biotech Limited — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

Rossari Biotech Limited reported its highest ever quarterly revenue and EBITDA in Q1 FY27, with consolidated revenue growing 28% YoY to ₹697.2 crores. This growth was broad-based across all core segments and supported by international expansion. However, EBITDA margins compressed to 11.6% due to subdued institutional/consumer businesses, raw material volatility, and freight costs. The company is strategically rationalizing non-core assets and focusing on new product development to improve profitability and achieve a long-term EBITDA margin target of 15%.

Highlights

  • Achieved highest ever quarterly revenue of ₹697.2 crores, marking a 28% YoY growth.

  • Recorded highest ever quarterly EBITDA of ₹80.6 crores, an 18.7% YoY increase.

  • All core business segments (HPPC, TSC, AHN) demonstrated strong growth of approximately 28% YoY.

  • International business maintained positive momentum with exports growing 21% YoY.

  • Launched a dedicated Fibre Chemicals Division, expanding capabilities across the fibre-to-fibre value chain.

Concerns

  • EBITDA margin declined to 11.6% in Q1 FY27 from 12.5% in Q1 FY26.

  • Institutional and consumer businesses remained subdued, impacting overall profitability.

  • Raw material volatility and increased freight costs continued to put pressure on margins.

  • Pharma business ramp-up is slow due to long-drawn compliance processes.

  • Saudi Arabian venture is in early stages and is expected to take a couple of years to mature.

Key financials

  1. Revenue from Operations ₹697.2 Cr +28%YoY
  2. EBITDA ₹80.6 Cr +18.7%YoY
  3. EBITDA Margin 11.6%
  4. PAT ₹35.1 Cr +4.5%YoY
  5. Core B2B EBITDA ₹85 Cr +13%YoY
  6. Core B2B EBITDA Margin 14%

What they filed

Q1 FY27: revenue up 28.1%, net profit up 2.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue498 513 580 544 586 +18%582 +13%685 +18%697 +28%
EBITDA66 65 69 68 72 +9%69 +6%77 +12%81 +19%
Net profit35 32 34 34 37 +6%33 +3%46 +35%35 +3%
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

  • HPPC
    ₹550 Cr Quarterly Revenue28% YoY Growth
  • TSC
    28% YoY Growth
  • AHN
    28% YoY Growth

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investment in Thailand blending plant ₹10 Cr
    • Investment in Thailand blending plant ₹15 Cr
    • New products or new molecules in R&D, including pharma and aroma chemicals
    Investment in this plant is just Rs. 10 - Rs. 15 crore. It is not a very big plant. We cannot expect too much out of that plant. It is not big. (Sunil Chari, page 9) / No large spend are intent this year and the next year would be to ensure the spends that we have done, we start utilizing them well in the capacities. And in the KSA front, I think very initial kind of spends have happened. These are more in operational and exploratory pre-operational kind of expenses. (Ketan Sablok, page 15)
  • Debt Net ₹248 Cr
    On the debt profile, this quarter our net debt is about Rs. 248 crore. In March, this was about Rs. 280 crore. We have come down slightly on the net debt position. (Ketan Sablok, page 16) / But I think now going forward the finance cost should be at close to this Rs. 9 crore to Rs. 10 crore kind of a run rate. (Ketan Sablok, page 16)
  • Liquidity Liquidity disclosed Balance sheet remains healthy, supporting strong liquidity and comfortable leverage.
    Our balance sheet remains healthy, supporting strong liquidity and a comfortable leverage. We continue to focus on improving working-capital efficiency, strengthening our cash generation, and maintaining discipline in capital allocation. (Ketan Sablok, page 6)

Guidance & targets

Revenue

  • Top-line growth Revenue · FY27 · Medium confidence around 15%
    On an annualized basis, I think we would stick to our earlier estimates that we had shared of around 15% kind of top-line growth.

    — Ketan Sablok

  • Pharma business revenue Revenue · This year (FY27) · Medium confidence Rs. 70 – Rs. 75 crore
    The pharma, which is the higher value, I think we did more than Rs. 50 crore last year and this year we should do Rs. 70 – Rs. 75 crore in pharma this year.

    — Sunil Chari

  • Thailand plant revenue Revenue · Q1 FY27 · High confidence Rs. 2 - Rs. 3 crore
    The first quarter revenues from this plant were about Rs. 2 - Rs. 3 crore, but I think this will slowly start ramping up in the subsequent quarters.

    — Ketan Sablok

Profitability

  • EBITDA Margin Profitability · Long-term (2-3 years) · Medium confidence around 15%
    Our aim is that once we recalibrate the whole business mix, the product mix, we should have a steady state, the EBITDA margins at around 15% at least once these steps that we are taking materialize.

    — Ketan Sablok

  • EBITDA Margin Profitability · Near-term (base level) · High confidence 11.6%
    Yes, so I think these level of margins you can expect to be the base level.

    — Ketan Sablok

  • EBITDA release from B2C exit Profitability · Medium confidence 2%-3%
    In terms of EBITDA margins if you see it will release at least 2%-3% EBITDA.

    — Ketan Sablok

Business Development

  • Pharma business ramp-up Business Development · End of Q2 or Q3 FY27 · Medium confidence Compliances done, ramp-up seen
    Our target is by the end of Q2 or Q3 we should have most of the compliances done and then we should see a ramp-up of the pharma business.

    — Ketan Sablok

  • Saudi Arabia venture maturity Business Development · Next 2 years · Medium confidence Couple of years to mature
    And then now, there is also lot of pre-operative expenses coming in from our Saudi Arabian venture which should take a couple of years to mature.

    — Sunil Chari

  • Saudi Arabia production start Business Development · After announcement · Medium confidence About 1.5 years
    It should take about 1.5 years for us to start the first kilo of production once we make the announcement.

    — Sunil Chari

Raw Material

  • EO availability Raw Material · End of this calendar year (December) · Medium confidence Improved availability
    I think we are expecting more EO by the end of this year, hopefully will come before December.

    — Sunil Chari

Revenue Mix

  • Export revenue percentage Revenue Mix · Ongoing · High confidence 23%-24%-25%
    Our target is to keep growing the export business, while the domestic business is also growing, so generally the percentage remains around between 23%-24%-25%.

    — Ketan Sablok

Business Growth

  • Company size Business Growth · Next four years · Medium confidence More than double
    For example, exhibitions, customer visits, and customer interactions will definitely have to continue because we are looking at scaling up Rossari to more than double from here over the next four years.

    — Sunil Chari

What to watch in Q2 FY27

EBITDA Margin Improvement

Next couple of quarters
Current 11.6%
Target Improvement towards 15%

Why it matters

Key profitability metric, management expects 11.6% to be the base and aims for 15% long-term.

I think at least for the next couple of quarters, we should just wait and see how the margins improve because now we also have a lot of pressure in terms of the pricing, the raw material volatility.

Risks & concerns

  • Raw material price volatility and increased freight costs

    high

    Raw material volatility and rising freight prices, exacerbated by geopolitical uncertainty, are causing margin loss and making market predictions difficult. One specific raw material (phenol) significantly impacted Q1.

    Management acknowledged

  • Subdued institutional and consumer business performance

    medium

    The institutional and consumer business segments are operating in a subdued environment, weighing on overall profitability, leading to strategic rationalization efforts.

    Management acknowledged

  • Long gestation period and compliance delays for new ventures/segments

    medium

    The Saudi Arabia venture will take a couple of years to mature with pre-operative expenses, and the pharma business ramp-up is slow due to lengthy compliance processes, delaying full contribution to profitability.

    Management acknowledged

Q&A highlights

6 direct
EBITDA margin trajectory and growth drivers Direct
I think now as these capacity utilizations start improving over the next few quarters and years, I think we should be seeing a relative improvement in these margins. Also, as we talked in the opening remarks, we are working towards optimizing our product portfolio and the product mix. Lot of the low margin businesses we are trying to slowly exit.

Analyst challenged the stagnant margin, and management provided a clear strategy for improvement, including capacity utilization and product mix optimization.

Asked by Divyansh Jaju

Contribution of new products (last 2-3 years) to total revenue Direct
I think the biosurfactants, the NMMO, the spray-cooled powders, the fibre finishes that we have introduced, as well as the vitamin premix plant which has become operational, all these have started contributing very handsomely to the top line now.

Provided specific examples of new products and confirmed their positive impact on revenue, validating past R&D investments.

Asked by Divyansh Jaju

Revenue growth drivers (volume vs. pricing) and raw material pass-through Partial
The YoY growth in terms of volume v/s price, the volume has grown by about 10% and the rest of the growth has mostly come out of the higher pricing. / We have been able to pass on, but what happens is up and down, creates lot of uncertainty in the mind of buyers and also the freight become one major component because of the insurance cost and of the vessels and all and the unavailability of vessels. This is causing us some degree of margin loss for us.

Clarified that Q1 growth was 10% volume and 18% pricing, and while RM price hikes can be passed on, freight volatility and supply chain issues are impacting margins.

Asked by Disha Bhordia

Thailand plant contribution, utilization, and future revenue potential Direct
The first quarter revenues from this plant were about Rs. 2 - Rs. 3 crore, but I think this will slowly start ramping up in the subsequent quarters. Currently it is only working on some of the textile products, but maybe a few quarters down the line we also are aiming at doing some AHN products and some other HPPC molecules also on a longer-term basis.

Provided initial revenue figures and future product expansion plans for the new international facility, indicating its strategic importance.

Asked by Disha Bhordia

Saudi Arabia greenfield facility CAPEX, timeline, and product focus Partial
We are still doing a survey and trying to formalize some raw material, feedstock allocations, and some land allocations. This is still work in progress and nothing has been finalized. As soon as we finalize something we will announce to all our investors and to public at large. / It should take about 1.5 years for us to start the first kilo of production once we make the announcement.

Clarified the early stage of the Saudi Arabia project, its long gestation period, and the intent to produce both EO and non-EO products.

Asked by Disha Bhordia

Pharma business scale-up, contribution, and margin impact Direct
Our target is by the end of Q2 or Q3 we should have most of the compliances done and then we should see a ramp-up of the pharma business. / Yes, and it could be a revenue potential of close to Rs. 30 crore - Rs. 50 crore. For this year.

Provided specific timelines for compliance completion and revenue targets for the high-margin pharma business, which is crucial for overall margin improvement.

Asked by Disha Bhordia

Impact of exiting B2C business on debt and EBITDA margins Direct
See, the investment in the B2C business, our institutional business, the consumer business, and the private label business, there is no separate investment. These are all core assets, especially in our Silvassa plant, which cater to various other businesses as well. But in terms of debt if you ask me, our total debt would be in this business would be close to about Rs. 50 odd crore. / In terms of EBITDA margins if you see it will release at least 2%-3% EBITDA.

Quantified the debt associated with the B2C business and the expected EBITDA margin improvement from its rationalization, clarifying the strategic move.

Asked by Vinith Jain

Increased interest costs and debt profile Direct
On the debt profile, this quarter our net debt is about Rs. 248 crore. In March, this was about Rs. 280 crore. We have come down slightly on the net debt position. / Now since the CAPEX have come on stream, the project has started delivering. The interest cost is now coming in the P&L. That is also why the interest cost is higher. But I think now going forward the finance cost should be at close to this Rs. 9 crore to Rs. 10 crore kind of a run rate.

Clarified the reason for higher interest costs (capitalized capex coming on stream) and provided current net debt figures and future finance cost run rate.

Asked by Rohit Nagraj

2 min read 5 chapters

Detailed narrative

Strong Q1 FY27 Performance Driven by Core Segments and International Expansion

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.

Margin Compression Amidst Volatility and Strategic Rationalization Efforts

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.

New Product Contributions and Capacity Utilization

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.

Strategic International Expansion with Thailand Plant and Saudi Arabia Venture

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.

Disciplined Capital Allocation and Debt Management

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.

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