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.