💰 Financial Performance

Revenue Growth by Segment

The Chloro Alkali segment generated INR 270.22 Cr in FY25, representing a 22.21% growth from INR 221.11 Cr in FY24. H1 FY26 revenue reached INR 201.24 Cr, growing 59.22% YoY from INR 126.39 Cr.

Geographic Revenue Split

Not disclosed in available documents; however, the company is headquartered in Alwar, Rajasthan, and operates primarily from that region.

Profitability Margins

Net Profit Margin improved to 2.29% in FY25 from -2.17% in FY24. PAT for H1 FY26 stood at INR 19.49 Cr, a 743.12% increase from INR 2.31 Cr in H1 FY25, driven by higher realizations and operational efficiencies.

EBITDA Margin

EBITDA Margin for H1 FY26 was 20.76%, a significant expansion of 1,385 bps from 6.91% in H1 FY25. Q2 FY26 EBITDA margin reached 20.93% (INR 21.09 Cr) compared to 6.08% (INR 3.70 Cr) in Q2 FY25.

Capital Expenditure

Total planned capex between FY24 and FY28 is approximately INR 355 Cr. A specific outlay of INR 165 Cr is allocated for the 16MW solar plant, Chlorinated Paraffin Wax (CPW) unit, and Caustic Soda Lye (CSL) expansion.

Credit Rating & Borrowing

The company maintains an 'Adequate' liquidity position. Borrowings increased significantly in FY25 with a Debt-to-Equity ratio of 0.69 vs 0.22 in FY24 to fund solar and capacity expansions. Management targets an optimal Debt-to-Equity ratio of 1.0 to 1.2.

⚙️ Operational Drivers

Raw Materials

Key inputs include Salt and Power. Power and Fuel charges accounted for INR 78.74 Cr in H1 FY26, representing 39.1% of total income.

Capacity Expansion

Current installed capacity is 300 TPD (following a 90 TPD expansion in FY25). Planned expansion to 400 TPD is expected to be commissioned by Q3 FY27.

Raw Material Costs

Cost of Raw Materials was INR 57.84 Cr in H1 FY26, up from INR 32.26 Cr in H1 FY25, reflecting increased production volumes and capacity utilization.

Manufacturing Efficiency

Capacity utilization is currently at 80% to 85%. The company achieved a production of 65,275 tons of Caustic Soda in FY25.

📈 Strategic Growth

Expected Growth Rate

48%

Growth Strategy

Growth is driven by expanding caustic soda capacity from 300 TPD to 400 TPD by Q3 FY27, increasing downstream chlorine consumption through CPW and bleaching powder, and improving margins via a 16MW solar power project to lower energy costs.

Products & Services

Caustic Soda Lye (80% of revenue), Chlorine, Hydrogen, Chlorinated Paraffin Wax (CPW), and Bleaching Powder.

Brand Portfolio

Lords Chloro Alkali Limited.

New Products/Services

Expansion into downstream products like Chlorinated Paraffin Wax and Bleaching Powder to utilize captive chlorine and improve value-added revenue.

Market Expansion

Expansion of production capacity by 33% (from 300 to 400 TPD) to capture growing industrial demand in the chlor-alkali sector.

🌍 External Factors

Industry Trends

The industry is shifting toward sustainability and downstream integration to manage chlorine by-products. Demand is driven by the pulp, paper, and water treatment sectors.

Competitive Landscape

Operates in a competitive commodity market where profitability is determined by the lowest cost of production, particularly power costs.

Competitive Moat

Cost leadership is the primary moat, sustained by the 16MW captive solar plant which insulates the company from grid tariff hikes and provides a 40-50% renewable energy mix.

Macro Economic Sensitivity

Highly sensitive to industrial power tariffs in Rajasthan and global caustic soda price cycles.

Consumer Behavior

Increased demand for water treatment and industrial chemicals supports long-term volume growth.

⚖️ Regulatory & Governance

Industry Regulations

Subject to strict environmental norms for chemical manufacturing and hazardous waste (chlorine) management.

Environmental Compliance

The company spent INR 78.71 Lakhs on CSR in FY25, exceeding the statutory requirement of INR 74.94 Lakhs. It maintains compliance with environmental regulations regarding chlorine disposal.

Taxation Policy Impact

Average effective tax rate is approximately 25%. Q2 FY26 tax incidence was higher at 36% due to the absorption of carry-forward losses in previous quarters.

⚠️ Risk Analysis

Key Uncertainties

Project execution risk for the 100 TPD capacity expansion and the volatility of caustic soda prices which can swing the company from profit to loss (as seen in the FY24 loss of INR 4.80 Cr).

Geographic Concentration Risk

Operations are concentrated at the Alwar, Rajasthan plant.

Third Party Dependencies

High dependency on JVVNL for power supply, though being mitigated by the 16MW solar plant.

Technology Obsolescence Risk

The company uses Ind AS accounting and historical cost conventions; no specific digital/tech risks noted.

Credit & Counterparty Risk

Receivables turnover slowed to 8.64 in FY25, indicating higher credit terms and potential counterparty risk.