PCBL Chemical Q1 FY26 slides: Specialty segments drive growth amid revenue dip

Introduction & Market Context

PCBL Chemical Ltd, the world’s 7th largest carbon black producer and a key player in the specialty chemicals market, recently presented its Q1 FY26 performance results. The company, part of the ₹42,100 Cr (~US$5 Bn) RPSG Group conglomerate, demonstrated resilience through volume growth despite facing revenue headwinds.

As shown in the following overview of PCBL’s position in the global specialty chemicals market:

With a total capacity of 790 KTPA across five manufacturing locations, PCBL has established itself as a diversified specialty chemical player. The company maintains a global footprint with operations in over 60 countries and offers more than 350 product grades, with approximately 23% of revenue coming from specialty chemicals.

Quarterly Performance Highlights

PCBL Chemical reported consolidated revenue of ₹2,114 Cr for Q1 FY26, a slight decline from ₹2,144 Cr in the same quarter last year. Consolidated EBITDA stood at ₹325 Cr, down from ₹369 Cr in Q1 FY25, while profit before tax came in at ₹120 Cr.

The following chart illustrates the company’s consolidated performance metrics:

Despite the revenue dip, PCBL demonstrated operational resilience with carbon black sales volume increasing by 2.6% quarter-on-quarter to 154,093 MT. Notably, specialty black volumes grew by 4.5% QoQ to 16,065 MT, highlighting the company’s strategic shift toward higher-margin specialty products.

Operational Performance by Segment

PCBL’s product portfolio spans multiple segments, with a strategic focus on moving up the technology value chain. The company’s product mix includes Tyre Chemicals (38%), Performance Chemicals (25%), Tyre Specialty (14%), Specialty Blacks (9%), and Water/Detergent/Oil & Gas Chemicals (14%).

The company’s diversified product portfolio is illustrated in this technology pyramid:

In the rubber and specialty blacks segment, PCBL reported volume growth across key categories. Particularly impressive is the company’s progress in specialty blacks, which now constitute over 10% of the product mix, up from less than 1% in 2015.

The operational performance across segments is detailed in the following chart:

Green power generation continues to be a bright spot for PCBL, with production increasing by 11% year-over-year to 215 MU and sales volume growing by 14%. The net realization from power sales stood at ₹4.7/kWh during the quarter.

Aquapharm Chemical Performance

Aquapharm Chemical, part of PCBL’s portfolio, delivered strong results with revenue of ₹382 Cr, up 6% due to better demand and increased exports. The division reported EBITDA of ₹50 Cr and achieved an 8.7% year-over-year increase in sales volume to 26,523 tons.

The following chart provides a detailed breakdown of Aquapharm’s financial and operational metrics:

Aquapharm’s revenue is geographically diversified with North America accounting for 53%, Europe 19%, India 16%, and the rest of the world 12%. The division has successfully expanded its geographical reach in Latin America, the US, and the Middle East, and recently commissioned a new polymer line at its Mahad plant with a capacity of 11,500 MTPA.

Strategic Initiatives and Expansion Plans

PCBL is actively pursuing several strategic initiatives to drive future growth. The company is conducting trial runs for its brownfield expansion of 30,000 MTPA at its Tamil Nadu facility and is planning to establish a new specialty black line with 20,000 MTPA capacity.

Additionally, PCBL is acquiring 116 acres of land in Andhra Pradesh to set up a greenfield carbon black manufacturing unit, reinforcing its commitment to reaching 1 million MTPA capacity in carbon black by FY28.

One of the most promising initiatives is the company’s venture into battery innovation through Nanovace Technologies, which recently received a process patent from the US Patent Office. Nanovace is focused on addressing key challenges in battery performance, cost, and sustainability.

As illustrated in this overview of Nanovace’s battery innovation strategy:

Nanovace aims to produce a unique technology platform for battery production that could potentially extend battery range by 25-100%, provide 2-5x longer battery life, enable 4x faster charging with no performance loss, and reduce CO2 emissions during production by 80%. The company plans to commission a pilot plant in Palej, Gujarat by Q3 FY26, positioning itself to capitalize on the expected 22-25% CAGR in global demand for lithium-ion batteries.

Forward-Looking Statements

PCBL Chemical’s management expressed confidence in the company’s growth trajectory, highlighting its strategic focus on specialty products and sustainable energy solutions. The expansion of green power generation capacity, currently at 122 MW, underscores the company’s commitment to sustainability.

With a clear roadmap for capacity expansion and innovation in high-growth areas like battery technology, PCBL is positioning itself for long-term growth despite short-term revenue challenges. The company’s global manufacturing footprint and diversified product portfolio provide resilience against market fluctuations, while its increasing focus on specialty chemicals offers potential for margin expansion.

As PCBL continues to execute its strategic initiatives, investors will be watching closely to see if the volume growth in specialty segments can offset revenue headwinds and drive improved financial performance in the coming quarters.

Full presentation:

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