Rossari Biotech

Rossari Biotech reported a consolidated revenue of Rs. 581.7 crore in Q3 FY26, marking a healthy 13% year-on-year growth. Despite a softer domestic demand environment, the company's diversified business model supported growth across all segments. Consolidated EBITDA stood at Rs. 68.9 crore, with an EBITDA margin of 11.8%, impacted by ongoing investments in capacity expansion, new product development, and higher employee costs due to new labor codes.

The Home, Personal Care, and Performance Chemicals (HPPC) segment delivered 11% YoY growth, while Textile Specialty Chemicals saw an 18% YoY increase. The Animal Health and Nutrition (AHN) business reported strong growth of 39% YoY, driven by improved traction in key user markets and export initiatives. The international business continued its robust performance, growing 26% in 9M FY26, with exports contributing 33% to the total turnover in Q3 FY26.

The newly commissioned 15,000 MTPA Ethoxylation facility at Unitop is currently ramping up, with utilization at 10-15% in Q3 FY26. Management expects optimal utilization of this facility to take 'at least 2 years-plus,' aiming for 90% capacity utilization by the end of FY27. The balance of the second phase of Ethoxylation capacity is expected to come onstream in Q4 FY26. Total capitalized capex for FY26 is projected to be around Rs. 200 crore across the group.

The Board has granted in-principle approval for setting up a greenfield specialty chemicals manufacturing facility in the Kingdom of Saudi Arabia. This strategic move aims to enhance supply chain resilience, improve speed-to-market, and support international growth, leveraging KSA's raw material availability at potentially 35% lower costs than India. The initial $8 million approval is for equity infusion to facilitate the evaluation process, with the full capex amount to be determined later upon formal Board approval.

Profitability has remained consistent for several quarters, with PAT broadly around Rs. 300 million per quarter and ROCE at approximately 13%. Management indicated that the institutional and B2C businesses are 'pulling us down' and are under re-evaluation to reduce losses. Excluding these, core B2B operations achieved an EBITDA of Rs. 72 crore with a 14% margin. The company expects overall EBITDA margins to be in the 12-13% range for the next year, potentially rising to a 15%-odd range if the B2C segment is shorn off.

Rossari is intensifying its focus on new product development, enhancing R&D capabilities, and hiring senior personnel. Sales from new products already account for over 20%. The company is bullish on its bio-surfactant products, with two major multinationals having approved them globally, and expects to sell 300 tons next year. Exports are anticipated to continue growing at a good rate, driven by new geographies and the upcoming Thailand formulation unit, which will support textile exports to Southeast Asia.