PCBLNSEQ4 FY26April 30, 2026

PCBL Chemical Limited

7,456words
94turns
6analyst exchanges
4executives
Management on call
Nilesh Koul
MANAGING DIRECTOR – PCBL CHEMICAL LIMITED
Raj Gupta
CHIEF FINANCIAL OFFICER – PCBL CHEMICAL LIMITED
Pankaj Kedia
EXECUTIVE DIRECTOR – INVESTOR RELATIONS
Sanjesh Jain
ICICI SECURITIES LIMITED
Key numbers — 40 extracted
1.8 million
y business are firming up and the ratification of the India-EU FTA opens up a duty-free access to 1.8 million tons of carbon black market. We expect this recovery to consolidate progressively over the next 2
75%
ficant disruptions across our value chain and substantial increases in cost. With approximately 75% of our raw materials sourced from the U.S. Gulf Coast and around 40% of our business driven by ex
40%
n cost. With approximately 75% of our raw materials sourced from the U.S. Gulf Coast and around 40% of our business driven by exports across geographies, we have significant dependence on global su
rs,
of materials going forward. Global tyre majors are increasingly building strategic inventory buffers, transitioning from just- in-time to a more resilient just-in-case approach in order to mitigate sup
INR200
eld improvement, throughput enhancement and feedstock diversification are on track to unlock over INR200-250 crores of savings over the next 4-6 quarters. We have also begun introducing agentic AI sol
250 crore
rovement, throughput enhancement and feedstock diversification are on track to unlock over INR200-250 crores of savings over the next 4-6 quarters. We have also begun introducing agentic AI solutions on th
INR454 crore
Importantly, we have used this period to strengthen the balance sheet. Net borrowings reduced by INR454 crores to INR4,536 crores during FY26, even while we funded INR750 crores of capex. Our working capital
INR4,536 crore
have used this period to strengthen the balance sheet. Net borrowings reduced by INR454 crores to INR4,536 crores during FY26, even while we funded INR750 crores of capex. Our working capital cycle has tightene
INR750 crore
eet. Net borrowings reduced by INR454 crores to INR4,536 crores during FY26, even while we funded INR750 crores of capex. Our working capital cycle has tightened further. The platform we are entering FY27 wit
1,000 MT
tal installed capacity is now 880,000 tons per annum. The superconductive specialty black line of 1,000 MTPA at Palej, Gujarat is mechanically ready for commissioning. However, commissioning has been dela
8%
formance, during the quarter, our consolidated sales volume in carbon black business increased by 8% YoY to 1,61,865 MT. Consolidated revenue from operations during the quarter was INR2,066 crores a
1,61,865 MT
during the quarter, our consolidated sales volume in carbon black business increased by 8% YoY to 1,61,865 MT. Consolidated revenue from operations during the quarter was INR2,066 crores and consolidated E
Guidance — 20 items
Nilesh Koul
opening
“Most of these pressures persisted through the fourth quarter and FY26 whole has truly tested our resilience and our business amid a challenging microeconomic and industry environment.”
Nilesh Koul
opening
“We expect this recovery to consolidate progressively over the next 2-3 quarters.”
Nilesh Koul
opening
“Given that price contracts carry an inherent quarterly lag effect, the full impact of cost pass- through will reflect in our numbers by Q2 FY27, at which point our margins profile should normalize.”
Nilesh Koul
opening
“We are seeing a trend of stocking up at the customer level, which appears to be driven by uncertainty regarding the availability of materials going forward.”
Nilesh Koul
opening
“We expect this transition to translate into an incremental demand environment driven by restocking of carbon black across the region.”
Nilesh Koul
opening
“With supply chain stabilizing, we expect both domestic and export growth to continue in the coming quarters.”
Nilesh Koul
opening
“We are deepening our presence through a service-led model in Europe and Japan, aiming to drive volume and market-shared growth through customized solutions with key players in these markets.”
Nilesh Koul
opening
“The Indian tyre sector in FY27 is poised for robust, high single-digit growth.”
Nilesh Koul
opening
“Cost initiatives across yield improvement, throughput enhancement and feedstock diversification are on track to unlock over INR200-250 crores of savings over the next 4-6 quarters.”
Nilesh Koul
opening
“Faster decision making is already visible and we expect this to translate into improved up-time, better quality and more consistent operations.”
Risks & concerns — 12 flagged
Gulf Coast, raw material prices have risen, packing material costs have moved up materially and freight costs have escalated sharply, exerting significant pressure on our margins during the period.
— Nilesh Koul
Given that price contracts carry an inherent quarterly lag effect, the full impact of cost pass- through will reflect in our numbers by Q2 FY27, at which point our margins profile should normalize.
— Nilesh Koul
Our water solutions business also faced headwinds, resulting in a 12% YoY decline.
— Nilesh Koul
Lower oil prices pre-war led to more cautious customer behavior and an indirect impact on realizations.
— Nilesh Koul
And therefore, there's a little bit of reduced pressure on the prices in India.
— Nilesh Koul
So, the real impact of all the initiatives which Nilesh just spoke about is yet to come.
— Raj Gupta
Considering there is a sharp increase in the feedstock prices, that will put significant pressure on working capital and hence on the net debt position, which already appears to be stretched in correct profitability situation.
— Sanjesh Jain
We believe that maybe in a quarter's time, we'll see crude soften back to that 80-90 level.
— Raj Gupta
As I said in March itself, we had started taking prices up and price increases have gone through because obviously, the entire industry is facing the same challenge.
— Nilesh Koul
So, you see some improvement in volumes being exported out of India, which therefore reduces the pressure on pricing in India.
— Nilesh Koul
So, we are seeing positive traction beyond the immediate impact of inventory increase.
— Nilesh Koul
The challenge is not the target market or the size of the market.
— Pankaj Kedia
Q&A — 6 exchanges
Q
Yes, thank you. Thanks for taking my questions and for this opportunity. I got a few across the businesses. First on the carbon black, what is benefiting us because the profitability in the segment has gone up? It's purely because U.S. tariff has changed ways. We were struggling or there is a lower import coming from Russia, thanks to the Middle East crisis? I can also sense inventory gains during the quarter, considering that there was a sharp increase in prices across commodities, which should have benefited. In this backdrop, how do you see FY27 panning out, both from a volume perspective a
Nilesh Koul
I think, first U.S. tariff reduction has definitely improved prospects, which also means that more players are exporting material outside of India. And therefore, there's a little bit of reduced pressure on the prices in India. While the tyre business is based on pass-through, in the non-tyre business in India, we have been successful in increasing prices over the last few months. Of course, after the West Asia crisis, we were forced to increase even more prices, but structurally we have been able to improve some pricing in that area. That's one. Going forward, I think we are optimistic on bot
Q
Yes. Thank you for taking my question, sir. So already some of my questions have been answered. Just a few from my side. One is, as sir, in the opening remark indicated about this price increase pass-on would be majorly reflecting from Q2 onwards, I guess. So just wanted to understand how this pricing pass-on would be, I mean, being out in the different segments for us for carbon black as well as for the Aquapharm also. And I think from March onwards, we have some higher prices which came down in mid-April. But again, again it started moving up and probably there would be some adjustment in th
Nilesh Koul
So, as you said, different segments in our market have different pricing linkages. So, in case of tyres, for example, there is a structure where pricing can be linked to and we have different types of contracts with tyre consumers. Some are Q minus 1, some are M minus 1. So, there are different pass-through mechanisms. So those will come into effect as and when the contract terms move along with it. There is also a significant piece of volume which is based on spot pricing. There we have anticipated and taken price increase early. As I said in March itself, we had started taking prices up and
Q
Thank you, sir, for the opportunity. Just a couple of questions. Sir, you mentioned in your opening remarks on the carbon black spreads bottoming out. So, what are the indicators like if you can highlight and what is giving you that confidence that this has bottomed out? And what are the triggers wherein it can improve apart from what we say that tyre demand will grow? Any structural change in the business we can see okay now this has bottomed out and sir compared with last quarter actually spreads look much lower here, adjusting for the inventory gains. So, what has changed and what is giving
Nilesh Koul
For the Indian players, some of the positive things that we are seeing is because the US tariff issue is to some extent sorted out. So, the additional volume coming into the Indian market is now moving towards US as well. So, you see some improvement in volumes being exported out of India, which therefore reduces the pressure on pricing in India. That's number one. I think we are also continuing to see some inventory built up by our customers as well, which is a little bit of an additional demand coming through and again should allow us to start charging a little bit more premium. Third, of co
Q
Yes, thank you. My question is back to the EBITDA per ton for FY27. So, if I understand, you said you are expecting double-digit growth on EBITDA. So, should I assume that the 14,900 odd per ton, we should see at least about a 14-15% increase on this number? Is that what this leads to?
Nilesh Koul
We should easily see that, yes. Just to clarify it's a mix of both. We expect pricing to move up and we also are taking significant initiatives on cost. So, combination of that should definitely deliver that. And here you are coming to this number based on two factors, one being the volume growth of high single digits of 7-10% and the value growth of the remainder to get to this number. Is again my understanding, correct? So let me recapture. So, there's three elements. One is, of course, the volume growth. Second is a product mix change. We are getting higher value-added products coming throu
Q
Yes. Sir, in the last call, we had mentioned that Aquapharm received incremental allocation from customers like P&G, Henkel. So, could you quantify the potential volume growth expected from these two allocations over the next 1-2 years? Also, regarding the recent, the removal of 13% VAT, the export debate which you were talking with benefit in China. So specific to PBTC product, so within the Aquapharm the overall volume mix, what proportion of volume is currently derived from PBTC product and what about the operating profit growth that we are expecting in Aquapharm?
Pankaj Kedia
So, Sailesh, specifically, if you talk about the green chelates portfolio, where we last quarter also mentioned that we have started receiving trial orders and supplies have started to both P&G and Henkel. There, I think, from Q2 and Q3 onwards, we see significant increase in the expected sales revenue as we get product approvals. So, from a potential perspective, potential is large. We ourselves have limited capacity, our overall green chelates capacity is 4,000 tons. And we have been looking at expanding that capacity, but we have been waiting for product approvals to come in so that we don'
Q
Yes, good afternoon. Thank you for the opportunity. So given the current crude prices, what kind of blended carbon by regulations should we look for Q1, F27, given that you clock closer to INR105 to a kg in Q4?
Nilesh Koul
Sorry, I couldn't get the question. If you can say that again, please. Yes. So, what kind of blended carbon black realisation should we expect in Q1, F27, given the crude prices that they are currently hovering at? Around $1,400-1,500. Okay. And that is true for Indian markets as well, right? Yes, I'm talking about average blended, both domestic and international. Right. And sir at the current level of crude prices, how is the CBO versus CBFS profitability? So, do we see more of Chinese supply getting into the market at the current crude prices, which is coal-type based or CBFS as a root is st
Speaking time
Nilesh Koul
26
Shashank Kanodia
12
Sanjesh Jain
10
Raj Gupta
9
Moderator
8
Aditya Khetan
8
Pankaj Kedia
7
Sailesh Raja
6
Rohit Sinha
4
Prit Nagersheth
4
Opening remarks
Sanjesh Jain
Thanks, Renju. Good afternoon, everyone. Thank you for joining the PCBL Chemical Limited Q4 FY26 Results Conference call. We have PCBL Chemical Management on the call represented by Mr. Nilesh Koul-Managing Director, Mr. Raj Gupta-Chief Financial Officer, Mr. Pankaj Kedia-Executive Director, Investor Relations. I would like to invite Mr. Nilesh to initiate the call with his opening remarks, post which we will have a Q&A session. Over to you, sir.
Nilesh Koul
Hi, good afternoon, everyone and a warm welcome to you on the PCBL's Q4 and Full year 26 Earnings Conference call. When we last connected at the Q3 Earnings call, we had outlined the headwinds shaping our business, softer global benchmark spreads, surplus domestic capacity, geopolitical uncertainty and a sharp inventory adjustment by international customers. Most of these pressures persisted through the fourth quarter and FY26 whole has truly tested our resilience and our business amid a challenging microeconomic and industry environment. That said, while we faced significant headwinds last year, the broad industry dynamics have now started to show clear signs of recovery. Spread appear to have found a floor, exit quarter momentum has turned positive, the recent rationalization of U.S. tariffs has restored a meaningful cost advantage for Indian exports. Customer pipelines in our specialty business are firming up and the ratification of the India-EU FTA opens up a duty-free access to 1.
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