Specialty chemicals maker Epigral delivered mixed first-quarter results with consolidated net profit declining 38% to ₹99.74 crore compared to ₹160.79 crore in the year-ago period. However, total income rose to ₹709.46 crore during the first quarter of FY26 from ₹614.79 crore in the corresponding quarter of the previous financial year. The company explained that the profit decline was primarily due to shifting to a new tax rate of 25.17% in April-June 2025-26, which resulted in a deferred tax liability reduction of ₹81 crore. Despite the headwinds, Epigral maintained a robust EBITDA margin of 25% and EBITDA grew 10% to ₹179 crore compared to ₹163 crore in the corresponding quarter of the previous financial year. The return on capital employed (ROCE) declined to 16% from 24% in the prior year quarter, primarily due to lower earnings before interest and tax (EBIT) in the trailing twelve months and significant capital work in progress. Net Debt/EBITDA stood at 0.8x as on June 30, 2026.
Epigral announced a significant strategic expansion into the epoxy resin and formulations business with a planned production capacity of 1,25,000 tonnes per annum (TPA). The company's board approved this entry along with a Multi-Purpose Plant (MPP), both projects expected to be commissioned during H2 FY28. As reported in the regulatory filing, the estimated capital expenditure for the project is around ₹600 crore. The expansion marks Epigral's forward integration into the advanced materials and specialty chemicals segment, targeting high-growth industries such as construction, renewable energy, automotive, electronics, infrastructure, marine, aerospace, industrial flooring, and semiconductors. Epoxy resin is widely used in applications including wind turbine blades, fiber-reinforced polymers, industrial coatings, tile adhesives, electrical insulation, chemical storage systems, marine structures, and automotive components. The company expects demand in India to remain strong, driven by infrastructure development, manufacturing growth, and increasing adoption of high-performance materials. A key advantage for Epigral is its integrated manufacturing complex at Dahej, where it already produces critical raw materials such as Epichlorohydrin (ECH) and Caustic Soda. The estimated capital expenditure for the project is around ₹600 crore, with more than 50% of raw material requirement by value for the new project to be sourced internally, enhancing cost efficiency and strengthening backward integration.
The proposed MPP will manufacture downstream products from the epichlorohydrin and chlorotoluenes value chains, catering to growing domestic demand for pharmaceutical intermediates, agrochemical intermediates and water-treatment chemicals. According to the regulatory filing, to de-risk the commercial rollout, Epigral is setting up a pilot facility for the epoxy resin and MPP businesses, expected to become operational by Q2 FY27. The pilot plant will help validate product quality, optimise manufacturing processes and secure customer approvals ahead of large-scale production. The company expects to commission both the epoxy resin facility and the MPP during the second half of FY28. Additionally, capex for enhancing CPVC Resin, ECH, and Wind Solar Hybrid Power Plant capacities is moving as per schedule and is expected to be commissioned within the timeline and budget. The CPVC Resin expansion will add 75,000 TPA, bringing total capacity to 1,50,000 TPA, while the ECH expansion will add 50,000 TPA, reaching 1,00,000 TPA, both expected to commission in Q2FY27. By leveraging its existing Chloro-Alkali infrastructure to venture downstream into high-value Epoxy Resins, the company is shielding its margins from primary chemical price cycles. The Indian specialty chemical space is experiencing a pivot toward deep integration, with Epoxy resins vital for automotive coatings, windmill blade manufacturing, electronics, and construction adhesives.
The company is strategically transitioning away from traditional chlor-alkali products toward derivatives and specialty chemicals constituting ~70% of revenue by FY28E. This transformation underscores the resilience of India's specialty chemicals sector amid macroeconomic volatility, including geopolitical tensions affecting raw material prices. Despite the headline net profit decline, Epigral's underlying financial strength remains excellent, as evidenced by robust core sales growth driven by better volumes and price realizations in the chlor-alkali and specialty segments. The divergence between revenue growth and ROCE highlights the impact of ongoing capital intensity on short-term returns, while the maintenance of a 25% EBITDA margin amidst geopolitical volatility underscores pricing power and operational leverage. In May 2026, Epigral posted its highest-ever quarterly revenue of ₹736 crore for Q4 FY26, which was up 17% year-on-year. On June 4, 2026, CRISIL Ratings reaffirmed its 'CRISIL AA/Stable/CRISIL A1+' ratings on Epigral's bank facilities, highlighting the company's strong capital structure and healthy debt protection metrics. The planned ₹600 crore capex aims to enhance this margin profile further through internal sourcing, where over half of the raw materials for the new Epoxy Resin unit will be produced in-house, reducing external dependency and cost variability.
