Lords Chloro Alkali Ltd | Q4FY26

Full-Year FY26 Highlights

• Total Income: Reached ₹393.1 crores, representing a robust year-on-year growth of 44.62%.

• Profit After Tax (PAT): Stood at ₹28.49 crores, marking an exponential increase of 360.9% compared to FY25.

• EBITDA: Came in at ₹66.38 crores, a 159% surge year-on-year, with an EBITDA margin improvement of 747 basis points.

  
  

Q4 FY26 Specifics

• Total Income: Registered at ₹97.75 crores, up 22.3% year-on-year.

• PAT: Reported at ₹4.39 crores, increasing by ₹68.64 crores over Q4 FY25.

• EBITDA: Stood at ₹13.72 crores with a margin of 14.03%. This reflects a sequential margin recovery of 247 basis points over Q3 FY26, driven by operational efficiencies, though partially offset by higher grid electricity rates that took effect in October 2025.

• Revenue Drivers: Chlorinated Paraffin Wax contributed meaningfully to revenues alongside steady volumetric growth in Caustic Soda Lye.

  
  

Operational Performance & Volume Growth

• Annual Volume: Caustic Soda Lye sales volume achieved a record 84,690 metric tons, growing 29.7% over FY25.

• Quarterly Volume: Q4 FY26 volumes reached 20,935 metric tons, up 8.72% year-on-year.

• Demand Sectors: Growth was sustained by robust demand from key end-user segments, including aluminum, paper, textiles, and pharmaceuticals.

• Capacity Utilization: The company is currently operating at approximately 80% to 85% capacity utilization.

  
  

Balance Sheet & Capital Structure

• Shareholders' Funds: Increased to ₹242.52 crores as of March 31, 2026, compared to ₹181.67 crores in the previous year, bolstered by strong earnings acceleration and the successful completion of a warrant issue.

• Total Assets: Stood at ₹478.7 crores.

• Debt Position: Long-term debt was reported at ₹96.37 crores and short-term borrowings at ₹65.58 crores.

• Leverage: The debt-to-equity ratio remains healthy at approximately 0.67x.

  
  

Energy Integration & Cost Reduction

Energy is the company’s largest single cost component. Management has actively transitioned to renewable energy to insulate margins:

• Cost Transition: Power and fuel costs accounted for 61% of production costs in FY25. Following the commissioning of a 16 MW solar plant in Bikaner and a 10 MW hybrid wind-solar group captive project in Jaisalmer, this ratio was brought down to approximately 42% in FY26.

• Upcoming Solar Project: A 21 MW solar plant in Rajasthan is scheduled for commissioning around mid-June 2026.

• Target Renewable Share: Once this new plant is operational, total captive renewable capacity will cross 47 MW (37 MW captive + 10 MW group captive), shifting the company's renewable energy share to 40%–45% of its total power requirements.

  
  

Capital Expenditure (CapEx) & Capacity Expansion

The company’s total CapEx outlay of ₹315 crores spanning FY24 to FY27/28 remains on track.

• Phase 1 (Completed): Included the initial Caustic Soda expansion, the 16 MW solar plant, and equity infusion into the 10 MW hybrid project.

• Phase 2 (Ongoing): Includes the execution of the 21 MW solar plant, expanding Chlorinated Paraffin Wax (CPW) capacity from 50 to 100 tons per day, and a further 100 tons per day expansion of the Caustic Soda plant.

• Net Capacity Output: Post-expansion, total installed capacity will reach 360 tons per day (reflecting the addition of 100 tons per day and the decommissioning of an older, inefficient 40-ton plant). This new capacity is expected to come online toward the end of FY27.

  
  

Strategic Outlook & Q&A Insights

• Regional Advantage: Management emphasized their competitive edge in the North Indian market, where favorable freight economics protect their pricing power. No other local competitors have announced capacity expansions for the next 15 to 18 months.

• Sufuric Acid Project Deferral: Management has put the previously announced sulfuric acid project on the back burner. This decision was driven by extreme global volatility in sulfur prices over the last 6 to 9 months, aligning with their commitment to prudent capital allocation.

• Group Captive Shortfall: Addressing a query regarding a 97 lakh unit shortfall in energy from their group captive consortium, management explained that delays in the wind energy infrastructure caused the deficit. However, solar operations are fully online, 65 MW of the broader 100 MW wind project is commissioned, and full execution is expected by next month, resolving any future unit deficits.

• Global and Domestic Pricing: While global commodity lines spiked significantly around March due to geopolitical tensions, they have normalized slightly but remain 12% to 15% higher than pre-war levels. Export demand from Europe is recovering as shipping and freight blockages begin to ease.