💰 Financial Performance

Revenue Growth by Segment

Total income for Q2 FY26 grew 16% YoY to INR 120.6 Cr compared to INR 103.9 Cr in Q2 FY25, primarily driven by the chemicals business following the demerger.

Geographic Revenue Split

Not disclosed in available documents, though the company notes significant competition from Chinese and Japanese imports, suggesting a domestic focus with exposure to global pricing.

Profitability Margins

Gross margins were impacted by raw material costs of INR 54.5 Cr (45% of revenue). PAT margin remained stable at 7.2% for Q2 FY26, while H1 FY26 PAT margin stood higher at 8.9%.

EBITDA Margin

EBITDA margin for Q2 FY26 was 16.8%, a contraction from 18.6% in Q2 FY25, despite a 5% YoY growth in absolute EBITDA to INR 20.2 Cr.

Capital Expenditure

Property, Plant and Equipment stood at INR 360.8 Cr as of September 2025, with Capital Work-in-Progress of INR 3.3 Cr, indicating ongoing minor maintenance or debottlenecking.

Credit Rating & Borrowing

The company maintains a strong liquidity profile; it prepaid a sizeable portion of long-term debt in Q1. Total borrowings as of Sep-25 were INR 81.5 Cr (INR 70.0 Cr current and INR 11.5 Cr non-current).

⚙️ Operational Drivers

Raw Materials

Sulphur is the primary raw material, with total raw material costs accounting for INR 54.5 Cr or 45.2% of total revenue in Q2 FY26.

Import Sources

Not specifically disclosed, but the company monitors global sulphur price moderation to improve profitability.

Capacity Expansion

Current Property, Plant and Equipment is valued at INR 360.8 Cr. Specific MTPA capacity is not disclosed, but the company emphasizes a highly cost-competitive manufacturing base.

Raw Material Costs

Raw material costs increased significantly to INR 54.5 Cr in Q2 FY26 from INR 36.4 Cr in Q2 FY25, a 49.7% increase, which pressured EBITDA margins.

Manufacturing Efficiency

Focus on operational efficiency and R&D foundation to maintain a cost-competitive base against imports.

Logistics & Distribution

Freight and forwarding expenses accounted for INR 8.3 Cr in Q2 FY26, representing 6.9% of total revenue.

📈 Strategic Growth

Expected Growth Rate

16%

Growth Strategy

Growth is targeted through the imposition of anti-dumping duties (ADD) on Chinese and Japanese imports, which restores pricing power. The company is leveraging its R&D foundation and cost-competitive manufacturing to strengthen market position and deliver consistent value.

Products & Services

Insoluble Sulphur and related chemical products for the rubber and tyre industry.

Brand Portfolio

OCCL Limited (following the demerger of the chemicals business from the former Oriental Carbon & Chemicals Limited).

New Products/Services

Not specifically disclosed, but R&D focus suggests ongoing product quality improvements.

Market Expansion

The company aims to strengthen its market position following the recent business restructuring and demerger.

Market Share & Ranking

Not disclosed, but the company is a significant player benefiting from protective anti-dumping duties.

Strategic Alliances

The company was formed via a demerger where the chemical business was moved into OCCL Ltd, while investments remained with AG Ventures Limited.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward domestic sourcing in India due to regulatory protections (ADD). Profitability is expected to improve due to moderation in sulphur prices and price hikes taken by the company.

Competitive Landscape

Key competition arises from Chinese and Japanese chemical exporters; the company competes on cost and quality.

Competitive Moat

The moat is built on cost-competitive manufacturing and R&D, further protected by the 5-year anti-dumping duty on imports from China and Japan, which limits low-cost competition.

Macro Economic Sensitivity

Sensitive to global chemical industry cycles and tyre demand, as well as international sulphur commodity pricing.

Consumer Behavior

Demand is driven by the global tyre industry's requirement for high-quality vulcanizing agents.

Geopolitical Risks

Trade barriers such as anti-dumping duties are currently a tailwind, but changes in trade relations with China or Japan could shift the competitive landscape.

⚖️ Regulatory & Governance

Industry Regulations

The company is subject to the Companies Act 2013 and Ind AS. The recent imposition of anti-dumping duty by regulatory authorities is a critical favorable factor.

Taxation Policy Impact

Effective tax rate for Q2 FY26 was approximately 25% (INR 2.9 Cr tax on INR 11.6 Cr PBT).

Legal Contingencies

Auditors reported that the company did not have pending litigations having a material impact on its financial position as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the sustainability of margins if sulphur prices rise sharply or if the anti-dumping duty is challenged or revoked, potentially impacting margins by 2-5%.

Geographic Concentration Risk

Not disclosed, but the business is sensitive to the domestic Indian market's regulatory environment.

Third Party Dependencies

Dependency on banks for working capital limits (sanctioned over INR 5 Cr) and sulphur suppliers.

Technology Obsolescence Risk

The company mitigates this through a 'strong R&D foundation' and focus on product quality.

Credit & Counterparty Risk

Auditors found no material differences in quarterly returns filed with banks; the company has not provided loans or guarantees to third parties during the year.