Rossari Biotech Limited — Q3 FY26 earnings call

Call held 19 Jan 2026

Management summary

Rossari Biotech Limited reported a healthy 13% year-on-year revenue growth to Rs. 581.7 crore in Q3 FY26, driven by strong performance across all segments and international markets. However, consolidated EBITDA margin stood at 11.8%, impacted by strategic investments in capacity expansion, new product development, and the implementation of new labor codes. The company is focused on improving profitability, particularly by addressing the underperforming B2C segment and leveraging new capacities, including a planned greenfield facility in KSA.

Highlights

  • Consolidated revenues grew by 13% YoY to Rs. 581.7 crore, supported by steady performance across core businesses and international markets.

  • All business segments registered year-on-year growth: HPPC (11% YoY), Textile Specialty Chemicals (18% YoY), and Animal Health and Nutrition (39% YoY).

  • International business continued to contribute meaningfully, growing by 26% in 9M FY26 and 33% of total turnover in Q3 FY26.

  • Board granted in-principle approval for setting up a greenfield specialty chemicals manufacturing facility in KSA to enhance supply chain resilience and support international growth.

  • Balance sheet remains strong with healthy liquidity and conservative leverage.

Concerns

  • Consolidated EBITDA margin stood at 11.8%, impacted by ongoing investments in capacity expansion, new product development, market-seeding initiatives, and new labor codes.

  • Profitability has been around the same level for many quarters, with ROCE sub-15% (around 13%).

  • Institutional and B2C businesses continued to operate in a challenging environment, pulling down overall profitability, with management re-evaluating their strategy.

  • Optimal utilization of new Ethoxylation facilities will take at least 2 years-plus, with current utilization at 10-15%.

Key financials

  1. Revenue ₹581.7 Cr +13%YoY
  2. EBITDA ₹68.9 Cr
  3. EBITDA Margin 11.8%
  4. Core B2B EBITDA ₹72 Cr
  5. Core B2B EBITDA Margin 14%
  6. Export Contribution 33%

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
    0.11 decimal fraction YoY Growth
  • Textile Specialty Chemicals
    0.18 decimal fraction YoY Growth
  • Animal Health and Nutrition
    0.39 decimal fraction YoY Growth

Capital allocation

high confidence
  • Capex ₹200 Cr mix of internal accruals and debt
    • Capacity expansion across Rossari and Unitop
    • New product development
    • Market-seeding initiatives
    • Greenfield specialty chemicals manufacturing facility in KSA (evaluation phase)
    On the capex front, our phased expansion program across Rossari and Unitop continues to progress. These investments are being funded through a mix of internal accruals and debt and are aimed to strengthen manufacturing capabilities, improving supply reliability and supporting the future growth. (Page 5) ...By the end of FY26, we would have capitalized total close to, I think, about Rs. 200 crore. I do not have the exact number, but it will be around that number across the group. (Page 13)
  • Debt Debt disclosed
    Our balance sheet remains strong with healthy liquidity and conservative leverage, providing us sufficient flexibility to pursue our growth initiatives. (Page 5)
  • Liquidity Liquidity disclosed Balance sheet remains strong with healthy liquidity and conservative leverage; working capital is moving back towards normalized levels.
    Our balance sheet remains strong with healthy liquidity and conservative leverage, providing us sufficient flexibility to pursue our growth initiatives. On working capital, the position improved sequentially in Q3 with better collection during this quarter. While we continue to hold selective strategic inventory for key raw materials, overall, the working capital is moving back towards the normalized levels. (Page 5)

Guidance & targets

Margin

  • EBITDA Margin Margin · next year · High confidence 12%-13%
    Otherwise at overall company level, it should be between this 12%-13%, at least for the next year, while we are working on improving the product mix.

    — Ketan Sablok

  • EBITDA Margin (excluding B2C) Margin · future · Medium confidence 15%-odd range
    But shorn off the B2C, I think we should be in that 15%-odd range.

    — Ketan Sablok

Capacity Utilization

  • Unitop Ethoxylation Facility Optimal Utilization Capacity Utilization · by 2027 · High confidence 2 years-plus (by 2027)
    The optimal utilization of both these facilities will take at least 2 years-plus for us to reach the optimal capacity utilization. So that is what the plan is. As the capacity utilizations go up, we will see some of the operating leverage playing out.

    — Ketan Sablok

  • Unitop Ethoxylation Facility Utilization Capacity Utilization · by end of FY27 · High confidence 90%
    It can go up to 90% capacity utilization.

    — Ketan Sablok

Raw Material Availability

  • Ethylene Oxide (EO) Availability Raw Material Availability · by Q3 FY27 · Medium confidence additional volumes
    We have been told that the additional volumes should come up by Q3 FY27. Hopefully, post that, then there should not be any issues on EO availability.

    — Ketan Sablok

Sales Volume

  • Bio-surfactant Sales Sales Volume · next year · High confidence 300 tons
    We are hoping that we will do, whatever, 300 tons of bio-surfactant next year in the production would all get sold up.

    — Sunil Chari

Capacity

  • Premix Plant (AHN) Commissioning Capacity · end of this quarter or early Q1 · High confidence onstream
    I think these will play out, plus our premix plant will come onstream by the end of this quarter or early Q1. Next year, premix plant should also add into the AHN volumes.

    — Ketan Sablok

What to watch in Q4 FY26

B2C Segment Strategy Decision

next few quarters
Current B2C segment pulling down profitability, re-evaluating strategy.
Target Decision on B2C vertical (e.g., divestment, restructuring) announced.

Why it matters

Resolution of this underperforming segment is key to overall margin improvement and achieving target profitability.

maybe in the next few quarters we may take some decisions on how we really plan to or what we plan to do with this B2C vertical.

Risks & concerns

  • Profitability impact from investments and new labor codes

    medium

    Profitability during the quarter was impacted by ongoing investment in capacity expansion, new product development, market-seeding initiatives, as well as the impact of implementation of new labour codes.

    Management acknowledged

  • B2C segment pulling down overall profitability

    medium

    The B2C segment of ours is really pulling us down. Management is re-evaluating strategy for this vertical.

    Management acknowledged

  • Softer domestic demand environment

    medium

    Domestic demand remained muted in certain segments, particularly textiles and HPPC, though exports provided support.

    Management acknowledged

  • Ethylene Oxide (EO) supply constraint

    low

    Availability of Ethylene Oxide continues to be a near-term constraint, though managed prudently. Could be an issue as ramp-up happens next year.

    Management acknowledged

Q&A highlights

6 direct
Dahej and Unitop Capacity Utilization and Operating Leverage Direct
The optimal utilization of both these facilities will take at least 2 years-plus for us to reach the optimal capacity utilization. So that is what the plan is. As the capacity utilizations go up, we will see some of the operating leverage playing out.

Clarifies the timeline for new capacity ramp-up and when investors can expect to see the full benefits of operating leverage on margins.

Asked by Rehan Saiyyed

Rationale for KSA Greenfield Expansion Direct
The primary advantage that is flowing in KSA is the availability of raw material. We are already speaking to a few suppliers with whom we plan to get into a long-term contract at a specific pricing formulae, which will give us a substantial advantage in terms of both availability and price. ... And it also had the close proximity to a lot of our export markets, Europe, Africa, MENA region.

Explains the strategic rationale behind the significant international expansion in KSA, highlighting cost advantages and market access, addressing potential investor concerns about capital allocation.

Asked by Sanjesh Jain

Profitability and ROCE Improvement Direct
Otherwise at overall company level, it should be between this 12%-13%, at least for the next year, while we are working on improving the product mix. As I said, some of these products which are developing now should see the production coming up in next year. But shorn off the B2C, I think we should be in that 15%-odd range.

Addresses core investor concerns about stagnant profitability and return ratios, outlining specific strategies (B2C divestment, product mix) for future improvement.

Asked by Sanjesh Jain

Management Bandwidth and India vs. KSA Priority Direct
And I do not think the current teams will get stressed. It will be a completely separate team with an overall view from the senior management here and the senior project team here. ... Priority continues to be the India business and then the KSA business, as and when it pans out, we will have separate people looking at that.

Reassures investors that the KSA expansion will not dilute focus or overstretch resources from the core India business, which remains the top priority.

Asked by Sanjesh Jain

Textile Business Growth Sustainability Partial
In Textile business much of the growth this quarter, it has happened across both the domestic and the export market. The export is driven by new customers. We have added a lot of new geographies like Turkey, Uzbekistan, Morocco, Philippines, Indonesia... But going forward, I think in Q4, it will be an average growth for us because domestic, unless and until some clarity comes on the tariff side and the end market demand goes up, we do not expect any major increase in sales. Exports continue to do well.

Provides insights into the drivers of the strong textile segment growth, differentiating between domestic uncertainty and sustained export momentum.

Asked by Ranvir Singh

Export Contribution and Future Trajectory Direct
If you see the exports trajectory of ours, it has consistently grown quarter-on-quarter. Some of the muted demand of the domestic market has been more than made up by the exports. If you see in these 9 months, export has grown almost 26% v/s last year while domestic has grown only 10%. And today, in these 9 months, the export piece is close to 30% of our turnover, maybe 3-4 years back, this number used to be less than 20%.

Highlights the increasing strategic importance of exports as a growth driver, showing a significant shift in the company's revenue mix and market focus.

Asked by Atishray Malhan

KSA Capex Amount Clarification Direct
No, that is not the CAPEX amount. That $8 million was just an approval taken for doing any kind of equity infusion for us to do the evaluation process. The capex will be substantially higher than that. That was only an initial approval we have taken to start, as I said, now in-principle approval has come and we will need to start doing a lot of groundwork there.

Corrects a potential misunderstanding about the scale of the KSA investment, indicating that the total project capex will be significantly larger than the initial $8 million for evaluation.

Asked by Tanvi Warekhar

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

Rossari Biotech Limited reported a 13% year-on-year revenue growth in Q3 FY26, reaching Rs. 581.7 crore, despite a softer domestic demand environment. Consolidated EBITDA stood at Rs. 68.9 crore, with an EBITDA margin of 11.8%. The company's diversified business model and strong customer relationships enabled it to sustain growth momentum, with all business segments registering year-on-year growth.

Segmental Growth Drivers

The Home, Personal Care, and Performance Chemicals (HPPC) segment delivered 11% YoY growth, reflecting stable demand. The Textile Specialty Chemicals segment achieved a healthy growth of 18% YoY, while the Animal Health and Nutrition business reported a strong growth of 39% YoY, driven by improved traction across key end-user markets. International business continued to be a significant contributor, growing 26% in 9M FY26 and accounting for 33% of total turnover in Q3.

Profitability and Margin Outlook

Profitability in Q3 FY26 was impacted by ongoing investments in capacity expansion, product development, market-seeding initiatives, and higher employee-related costs, resulting in an 11.8% EBITDA margin. Excluding the institutional and B2C businesses, core B2B operations delivered an EBITDA of Rs. 72 crore with a margin of approximately 14%. Management expects overall company EBITDA margins to be 12-13% for the next year, with potential to reach 15%+ if the B2C segment is excluded or restructured.

Capacity Expansion and Utilization

The newly commissioned 15,000 MTPA Ethoxylation facility at Unitop is currently operating at 10-15% utilization, with optimal utilization (up to 90%) expected to take at least two years, by 2027. The phased capacity expansion across Rossari and Unitop continues to progress, funded by a mix of internal accruals and debt. Approximately Rs. 200 crore is expected to be capitalized by the end of FY26 across the group for these expansions.

International Expansion in KSA

The Board granted in-principle approval for a greenfield specialty chemicals manufacturing facility in the Kingdom of Saudi Arabia (KSA) under Rossari International Limited Company. This strategic move aims to enhance supply chain resilience, improve speed to market, and support international growth, leveraging KSA's raw material availability (potentially 35% cheaper than India) and proximity to key export markets. An initial $8 million equity infusion was approved for the evaluation process, with the total capex expected to be substantially higher, pending formal Board approval.

New Product Development and Commercialization

Rossari is actively focusing on new product development, having enhanced its R&D capabilities. The company announced that its bio-surfactants have received global approvals from a leading personal care company and two multinationals, with a target to sell 300 tons next year. Additionally, the new trace mineral and vitamin premix plant for Animal Health and Nutrition is ready to start this quarter or early Q1, expected to add significant volumes to the segment.

B2C Segment Re-evaluation

The institutional and B2C businesses continued to face a challenging environment, with growth remaining muted and losses moderating. Management is re-evaluating plans for non-profitable products in this portfolio, as this segment is currently pulling down overall profitability. Decisions regarding the future of the B2C vertical are expected in the next few quarters, aiming to improve the overall margin profile.

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