Rossari Biotech Limited — Q4 FY26 earnings call

Call held 28 Apr 2026

Management summary

Rossari Biotech concluded FY26 on a strong note, achieving its highest-ever quarterly revenue and EBITDA in Q4, with full-year revenue growth of 15% driven by volume. While overall EBITDA margins saw slight compression due to raw material volatility and a challenging B2C environment, core B2B operations remained robust. The company rephased its CAPEX plans, focusing on strategic investments in pharma and aroma chemicals, and aims for significant debt reduction while expanding R&D capabilities and international presence.

Highlights

  • Q4 FY26 marked the company's highest-ever quarterly revenue and absolute EBITDA performance.

  • FY26 revenue grew 15% YoY, primarily volume driven, with healthy traction across all business segments.

  • HPPC, Textiles, and AHN segments delivered Q4 growth of 18%, 20%, and 14% respectively.

  • Exports grew 11% YoY in FY26, supported by deeper engagement and expansion into new geographies.

  • Commissioned additional ethoxylation capacity at Dahej, taking total installed capacity to 66,000 MTPA, with current utilization at 90-100%.

Concerns

  • Q4 FY26 EBITDA margin was 11.3% compared to 12% in the prior year, and FY26 margin was 11.9% compared to 12.7% in FY25, indicating margin compression.

  • Gross margins were relatively lower due to sales mix and raw material price increases (25-30% in March).

  • Institutional and B2C businesses continued to operate in a challenging environment, with muted growth and impact on overall profitability, though losses are moderating.

  • Earlier announced CAPEX of ₹192 crore across Rossari, Unitop, and Tristar has been rephased due to evolving business requirements and market conditions.

  • Ongoing geopolitical developments in the Middle East create uncertainty across raw material markets, supply chains, and logistics.

Key financials

2 periods

Q4 FY26

  • Revenue from Operations
    ₹684.9 Cr
    YoY +18%
  • EBITDA
    ₹77.3 Cr
    YoY +11%
  • EBITDA Margin
    11.3%

FY26

  • Revenue from Operations
    ₹2,396.4 Cr
    YoY +15%
  • EBITDA
    ₹286 Cr
    YoY +8%
  • EBITDA Margin
    11.9%

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 (Q4 FY26)
    18% Growth
  • Textiles (Q4 FY26)
    20% Growth
  • AHN (Q4 FY26)
    14% Growth
  • Exports (FY26)
    11% Growth
  • Core B2B (FY26)
    14% EBITDA Margin₹2,136.4 Cr Revenue Contribution
  • Institutional and B2C (FY26)
    ₹260 Cr Revenue Contribution

Capital allocation

high confidence
  • Capex ₹75 Cr Cut — re-evaluation of investment plan in light of evolving business requirements and market conditions
    • Pharma facility
    • Aroma chemical space

    Previously planned ₹192 Cr

    Ketan Sablok: "The CAPEX plan for this year would be I think anything between Rs. 50 crore to Rs. 75 crore, that is the plan. We would not like to spend anything more than that and even at very peak levels, we would reach Rs. 70 crore - Rs. 75 crore number." (Page 9-10)
  • Debt Debt disclosed
    Ketan Sablok: "And in terms of the debt that we have now, we have ~Rs. 200-odd crore of long-term debt, and the balance is the short-term working capital borrowings." (Page 11)

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · High confidence 15% plus
    Ketan Sablok: "minimum we should be able to deliver this kind of a growth that we have done in this year and if the situation globally improves, it will only add on to our growth plans." (Page 7) ... "These 3-4 initiatives will help us drive the 15% plus growth that we talked about." (Page 14)

    — Ketan Sablok

Profitability

  • EBITDA Margins Profitability · FY27 · High confidence 12% to 13%
    Ketan Sablok: "Currently, the EBITDA margins will remain at these current levels between 12% to 13%." (Page 7)

    — Ketan Sablok

Debt

  • Debt Reduction Debt · next 18 months · High confidence Debt-free
    Ketan Sablok: "The target is to actually get debt free in the next 18 months, but the time will tell. Currently, the plan is to keep bringing down our debt over the next 18 months." (Page 11)

    — Ketan Sablok

Institutional Business

  • Breakeven/Profitability Institutional Business · FY27 · High confidence Breakeven or profitability
    Sunil Chari: "In FY27, we should look at breakeven or even profitability, along with the divestment of some lower-margin businesses or those that contributed to EBITDA losses. We feel that FY27 should be a very good year for the institutional business." (Page 19)

    — Sunil Chari

Thailand Plant

  • Peak Revenue Potential Thailand Plant · peak utilization · Medium confidence ₹50-75 crore
    Ketan Sablok: "Yes. We should do about I think between Rs. 50 crore - Rs. 75 crore at its peak since it is blending so it depends a lot on the product also and what kind of blends we do, but at peak, we can achieve Rs. 50 crore - Rs. 75 crore of revenue." (Page 15)

    — Ketan Sablok

What to watch in Q1 FY27

FY27 Revenue Growth

FY27
Current 15% YoY (FY26)
Target 15% plus growth

Why it matters

To confirm the company's ability to sustain growth momentum despite external challenges and leverage new capacities.

Ketan Sablok: "minimum we should be able to deliver this kind of a growth that we have done in this year and if the situation globally improves, it will only add on to our growth plans." (Page 7)

Risks & concerns

  • Raw Material Price Volatility & Geopolitical Disruptions

    medium

    Volatility in raw materials and geopolitical developments in the Middle East create uncertainty for raw material markets, supply chains, and logistics, potentially impacting costs.

    Management acknowledged

  • Profitability Challenges in Institutional and B2C Businesses

    medium

    The institutional and B2C segments faced a challenging environment, leading to muted growth and impact on overall profitability, though losses are moderating due to optimization efforts.

    Management acknowledged

  • Domestic Demand Softness

    low

    Demand conditions in the domestic market remained relatively soft during certain periods of the year.

    Management acknowledged

  • CAPEX Rephasing and Delays

    low

    The earlier announced CAPEX of ₹192 crore has been rephased, which could imply slower capacity build-out than initially planned, though management frames it as strategic optimization.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
FY27 Growth and EBITDA Margins Direct
Ketan Sablok: "minimum we should be able to deliver this kind of a growth that we have done in this year and if the situation globally improves, it will only add on to our growth plans." ... "Currently, the EBITDA margins will remain at these current levels between 12% to 13%.

Analyst sought clear guidance on top-line growth and profitability for the upcoming fiscal year, which management provided with specific ranges.

Asked by Madhur Rathi

Segment-wise EBITDA Margin Profile Partial
Ketan Sablok: "This data we do not put forth, and we do not talk about it. But to give you a sense of the margins, at the EBITDA level, these 3 businesses stay at the company level margins. Some of them could be slightly higher 1% or 2% plus/minus, but generally they are at the same level.

Analyst probed for granular margin data by segment, which management declined to provide directly but offered qualitative insights into gross margin differences and future pharma potential.

Asked by Madhur Rathi

CAPEX Postponement and Rephasing Direct
Ketan Sablok: "The other CAPEX plan that we had announced in April last year had a mix of products in the amine range, as well as some pilot plants and R&D expansion at the sites. As the earlier capex experienced some delays, we decided not to immediately commence spending on this plan, keeping in mind the current business environment and the overall global situation that is prevailing.

Analyst questioned the delay in previously announced CAPEX, and management provided a detailed explanation citing external factors, internal re-evaluation, and strategic optimization.

Asked by Rohit Nagraj

Debt Reduction and Non-Core Asset Divestment Direct
Ketan Sablok: "The target is to actually get debt free in the next 18 months, but the time will tell. Currently, the plan is to keep bringing down our debt over the next 18 months." ... "One we already did in the last quarter, which was the office space in Mumbai. We have a couple of more office spaces here and some more assets across India that we are currently not utilizing.

Analyst sought clarity on the company's debt reduction strategy and plans for monetizing non-core assets, which management outlined with a specific timeline and initial actions.

Asked by Rohit Nagraj

Ethoxylation Capacity Utilization and Demand Direct
Sunil Chari: "Utilization levels for ethoxylation are practically 90% to 100%, whatever maximum we can do. We run 24/7 days, 365 days a year and apart from whatever gets stopped for expansion, we do not have a single downtime in anything.

Analyst inquired about the utilization of new ethoxylation capacity and customer acceptance of price increases, receiving a positive response indicating high utilization and successful pass-through of costs.

Asked by Rohit Nagraj

FY27 CAPEX for Pharma and Aroma Chemicals Direct
Ketan Sablok: "Yes. Apart from the pharma facility, we are going to do a couple of small CAPEXES. One of them is probably going to be in the aroma chemical space. These are the 2 that we have at least now concluded we should do it in this year. These two are the big ones, big in the sense that they are within the Rs. 50 crore range.

Analyst sought specifics on the allocation of the revised FY27 CAPEX, confirming focus on high-margin pharma and aroma chemical segments.

Asked by Maitri Shah

Promoter Stake Sale Rumours Evasive
Sunil Chari: "I think there is nothing of such at all. We are all sitting, working and focusing on growth. Market rumours will come and go. There is nothing on the plan at this moment.

Analyst directly addressed market rumors about promoter stake sale, which management denied, providing reassurance to investors.

Asked by Mihir Damania

2 min read 5 chapters

Detailed narrative

Strong Q4 and FY26 Performance Driven by Volume Growth

Rossari Biotech concluded FY26 with robust performance, reporting its highest-ever quarterly revenue of ₹684.9 crore in Q4, an 18% YoY increase. Full-year revenue reached ₹2,396.4 crore, marking a 15% YoY growth, primarily driven by volume expansion. All three business segments—HPPC, Textiles, and AHN—contributed to this growth, with Q4 seeing increases of 18%, 20%, and 14% respectively. Exports also demonstrated strong momentum, growing 11% YoY in FY26.

Strategic Focus on R&D, Innovation, and Capacity Expansion

The company continues to prioritize R&D and innovation, evolving towards broader platform technologies. A new R&D facility in Navi Mumbai has been established to consolidate existing operations and accelerate product development, particularly in sustainable chemistries like biosurfactants. On the manufacturing front, Unitop commissioned additional ethoxylation capacity at Dahej, increasing total installed capacity to 66,000 MTPA, with current utilization levels at 90-100%.

EBITDA Margin Management Amidst Cost Pressures

Despite strong revenue growth, EBITDA margins experienced slight compression, falling to 11.3% in Q4 FY26 from 12% in the prior year, and to 11.9% for FY26 from 12.7% in FY25. This was attributed to a less favorable sales mix and significant raw material price increases (25-30% in March). However, the company successfully passed on these cost increases to customers from April. Excluding the institutional and B2C businesses, the core B2B operations maintained a healthy EBITDA margin of 14% for the year.

Rephased CAPEX and Debt Reduction Strategy

Rossari Biotech has rephased its earlier announced CAPEX of ₹192 crore, opting for a more calibrated approach. The planned CAPEX for FY27 is now estimated between ₹50-75 crore, focusing on high-margin areas such as pharma and aroma chemicals. The company also aims to significantly reduce its debt, targeting to become debt-free within the next 18 months, supported by cash flow generation and the divestment of non-core assets, including the recent sale of office space for ₹19 crore.

Future Growth Drivers and International Market Expansion

The company anticipates sustaining a minimum of 15% plus revenue growth in FY27, driven by new capacities, expected Ethylene Oxide availability from Reliance by Q3, and strategic focus on high-growth, high-margin segments like pharma, agro, and oil & gas. International expansion remains a key priority, with plans to strengthen manufacturing footprint in Saudi Arabia and ramp up exports to regions like Latin America, Southeast Asia, and Turkey. The Thailand plant is expected to contribute meaningfully from Q2 FY27.

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