Vishnu Chemicals Limited

Vishnu Chemicals reported consolidated operating revenues of ₹411.3 crores in Q3 FY26, marking a 2.5% sequential growth from Q2 FY26. Gross margins expanded by 170 basis points QoQ to 44.8%, leading to an absolute gross profit of ₹184 crores, up 6.5% QoQ. EBITDA for the quarter stood at ₹61.7 crores, a 6% QoQ increase, with EBITDA margin improving to 15%. Profit after tax grew 2.6% sequentially to ₹33.7 crores. For the nine-month period, operating revenues were ₹1,159 crores, a 10% YoY growth, and PAT increased 12.7% YoY to ₹98.8 crores.

The company successfully completed the acquisition of a Mining Complex in South Africa, marking its third acquisition in three years. This strategic move aims to secure long-term supply of crucial raw materials, representing a key backward integration initiative. The integration process is on track, with operations at the mining complex expected to commence in a phased manner from Q1 FY27, which is anticipated to contribute to improved margins and consolidated stability.

Vishnu Strontium Private Limited has commercialized Strontium Carbonate, a new specialty chemical, with regular sales projected to begin from Q1 FY27 following customer approvals. The company is also focused on introducing new specialty chemicals, including plans for Dimethyl Sulfoxide (DMSO) and related derivatives, with commercialization expected by the end of FY27. Planned capacities include 10,000 tons for DMSO (phased), 20,000 tons for chrome oxide in Vishakhapatnam, and 6,000 tons for chrome metal.

Despite a soft global macroeconomic environment and cautious customer sentiment, Vishnu Chemicals maintained resilient performance. The company expects increased volumes in North America due to easing US tariffs on chrome chemicals, targeting an increase in market share to 14-15% of overall revenue. Furthermore, the imposition of an 84% anti-dumping duty on Chinese Barium Carbonate in Europe has led to a significant increase in demand and improved realizations for Vishnu Chemicals in the European market, with strong order book visibility for Q1 FY27.

For FY26, the company plans a CAPEX of ₹180-190 crores, which includes investments in the DMSO project and the South Africa mine. An additional CAPEX of approximately ₹300 crores is planned for FY27, covering chrome oxide green, chrome metal expansion, and further DMSO development. The Strontium Carbonate plant, including the Jayansree Pharma acquisition and additional CAPEX, has already capitalized about ₹110 crores. These investments are funded through a combination of internal accruals and debt.

While subdued global demand and elevated chrome ore prices have impacted EBITDA margins in the chromium segment (currently around 15%), management is optimistic about future improvements. The company targets to achieve 20% EBITDA margins by FY28, driven by the chrome ore acquisition, economies of scale from new capacities, and an improved product mix. The domestic to export sales mix is expected to remain balanced at approximately 50:50.