💰 Financial Performance

Revenue Growth by Segment

Standalone revenue from operations for Q2 FY26 reached INR 195 Cr, a growth of 34% YoY and 8% sequentially. For H1 FY26, standalone revenue was INR 375 Cr, up 20% YoY. Consolidated revenue for Q2 FY26 stood at INR 213 Cr, reflecting a 23% YoY increase and 6% sequential growth, driven by strong sales momentum in the Dyes and Dye Intermediates segments.

Geographic Revenue Split

The company maintains a global footprint with subsidiaries in Dubai (Chemhub Trading DMCC), Singapore (Claronex Holdings), and the Cayman Islands. While specific regional percentages are not fully disclosed, two wholly-owned foreign subsidiaries contributed INR 101.59 Cr in revenue for FY25, representing approximately 13.7% of consolidated FY25 revenue.

Profitability Margins

Profitability is currently under significant pressure. In Q2 FY26, the company reported a standalone net loss of INR 21 Cr and a consolidated net loss of INR 80 Cr. This is primarily due to elevated legal expenses related to the DyStar litigation and higher operating costs. Consolidated net loss for FY25 was INR 110.69 Cr, compared to a loss of INR 91.18 Cr in FY24, a 21.4% increase in losses.

EBITDA Margin

Standalone EBITDA for H1 FY26 was INR 7 Cr, yielding a margin of approximately 1.87%. However, Q2 FY26 saw a standalone EBITDA loss of INR 10 Cr and a consolidated EBITDA loss of INR 13 Cr. Profitability was adversely impacted by non-operational legal costs and elevated input costs during the quarter.

Capital Expenditure

In FY25, the company undertook significant capital expenditure of INR 406.97 Cr for the purchase of Property, Plant, and Equipment (PPE), including Capital Work-in-Progress. This represents a massive increase from the INR 7.83 Cr spent in FY24, indicating a major phase of capacity building or asset acquisition.

Credit Rating & Borrowing

The company raised INR 492.02 Cr through a preferential issue of convertible warrants, monitored by CRISIL. Consolidated finance costs surged to INR 61 Cr in Q2 FY26, significantly impacting the bottom line. Total consolidated assets as of March 31, 2025, stood at INR 4,725.22 Cr.

⚙️ Operational Drivers

Raw Materials

Specific raw material names like H-Acid, Vinyl Sulphone, and other chemical intermediates are used in the production of Dyes and Dye Intermediates. Input costs are described as 'elevated' in recent quarters, though specific percentage breakdowns per material are not disclosed.

Import Sources

The company sources materials both domestically and internationally, with operations and subsidiaries in India, Dubai, and Singapore suggesting a diversified procurement strategy across Asia and the Middle East.

Capacity Expansion

The company reported improved capacity utilization across key product categories in Q2 FY26. A major investment of INR 406.97 Cr in PPE during FY25 suggests a significant expansion of the manufacturing base, though specific MTPA figures were not provided.

Raw Material Costs

Input costs were cited as a primary reason for the consolidated EBITDA loss of INR 13 Cr in Q2 FY26. The company is managing these through improved capacity utilization to achieve better economies of scale.

Manufacturing Efficiency

The company achieved improved capacity utilization in Q2 FY26, which helped mitigate some impact of external volatility and higher operating costs.

📈 Strategic Growth

Expected Growth Rate

20-34%

Growth Strategy

Growth is targeted through the resolution of the DyStar litigation, which is expected to unlock significant value. The company has a Share Purchase Agreement (SPA) to sell its 37.57% stake in DyStar for a base consideration of USD 676.26 million (approx. INR 5,600 Cr). Additionally, Kiri has placed a bid of USD 1.1 billion to acquire DyStar entirely, with funds already arranged as of November 1, 2025.

Products & Services

The company manufactures and exports a wide range of Dyes and Dye Intermediates used primarily in the textile and pigment industries.

Brand Portfolio

Kiri Industries Limited (KIL), Lonsen Kiri Chemical Industries Limited (JV).

New Products/Services

The company is expanding into copper through Indo Asia Copper Limited and renewable energy via Kiri Renewable Energy Private Limited, though specific revenue contributions are not yet quantified.

Market Expansion

The company is targeting global markets through its Dubai and Singapore subsidiaries, focusing on expanding its export footprint for Dyes and Intermediates.

Strategic Alliances

Key alliances include a 40% stake in the Lonsen Kiri Chemical Industries Limited joint venture and a 37.57% stake in DyStar Global Holdings (Singapore) Pte. Ltd.

🌍 External Factors

Industry Trends

The Dyes and Pigments industry is currently facing 'external volatility' and 'elevated input costs.' Kiri is positioning itself to move beyond litigation toward becoming a larger global player through the potential full acquisition of DyStar.

Competitive Landscape

Key competitors include Zhejiang Longsheng Group, which is also the purchaser/bidder in the DyStar litigation.

Competitive Moat

Kiri's moat is built on its integrated manufacturing of Dyes and Intermediates and its strategic 40% stake in the Lonsen Kiri JV, which provides a stable profit stream. The potential resolution of the DyStar case is the primary catalyst for sustaining this advantage.

Macro Economic Sensitivity

The business is sensitive to global textile demand and chemical industry cycles. High finance costs (INR 61 Cr in Q2 FY26) indicate high sensitivity to interest rate environments and debt levels.

Consumer Behavior

Demand is driven by the textile industry's shift toward sustainable and high-quality dyes.

Geopolitical Risks

Operations in Dubai and Singapore, and litigation in Singapore courts, expose the company to international regulatory and geopolitical shifts.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and Indian Accounting Standards (Ind AS). The company must comply with environmental regulations for chemical manufacturing and international trade laws for its export business.

Environmental Compliance

The company operates in the chemical sector, which is subject to stringent pollution norms, though specific ESG spend was not disclosed.

Taxation Policy Impact

The company paid INR 0.21 Cr in taxes in FY25. The effective tax rate is low due to ongoing losses.

Legal Contingencies

The company is embroiled in the DyStar litigation in the Singapore International Commercial Court. The valuation of Kiri's stake is USD 676.26 million (approx. INR 5,600 Cr). Legal expenses are significant enough to impact quarterly profitability by over INR 20-30 Cr.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the final outcome of the DyStar litigation and the successful arrangement/deployment of USD 1.1 billion for the potential acquisition. Failure to resolve this could lead to continued high legal costs and liquidity strain.

Geographic Concentration Risk

While India is the primary manufacturing hub, a significant portion of assets (INR 1,093.68 Cr) and revenue are tied to foreign subsidiaries, particularly in Dubai and Singapore.

Third Party Dependencies

The company has a high dependency on the court-appointed receiver and the Singapore legal system for the resolution of its largest asset (DyStar).

Technology Obsolescence Risk

The company is investing in renewable energy (Kiri Renewable Energy) to mitigate technology risks and transition toward greener manufacturing processes.

Credit & Counterparty Risk

The company recorded an impairment loss under Expected Credit Loss (ECL) of INR 16.82 Lakhs in FY25, indicating relatively stable but monitored receivables quality.