Rossari Biotech Sees Strong Revenue Growth, But Faces Pricing Pressures

• Revenue: INR 586.1 Crores, a growth of 18% year on year.

• EBITDA: INR 71.9 Crores with a margin of 12.3%, compared to 13.2% in Q2 last year.

• Export Growth: 36% year on year in Q2 and 27% in H1.

• HPPC, TSC, and AHN Growth: 16%, 21%, and 29% year on year, respectively.

• Institutional and B2C Business Growth: 1% year on year and 7% quarter on quarter.

• Net Working Capital: 102 days, compared to 95 days in March.

• CapEx Plan: Total planned capital outlay of 192 Crores.

Release Date: October 17, 2025

Positive Points

• Rossari Biotech Ltd (BOM:543213) reported an 18% year‑on‑year revenue growth for Q2 FY26, driven by healthy volume expansion across its business segments.

• The company’s international business showed robust growth, with exports rising 36% year‑on‑year in Q2 and 27% in H1, highlighting the expanding scale of its international franchise.

• Successful commissioning of an additional 20,000 metric tons per annum capacity at their facility and 15,000 metric tons per annum of oxylation capacity at Unitor marks a significant milestone in strengthening their manufacturing base.

• Rossari Biotech Ltd (BOM:543213) has developed new products guided by green chemistry principles, enhancing their technology pipeline and ability to address emerging global trends.

• The company maintains a strong balance sheet with healthy liquidity, conservative leverage, and sufficient headroom to support ongoing growth initiatives.

Negative Points

• The pricing environment remained subdued, impacting realizations and putting pressure on profitability despite volume growth.

• Institutional and B2C business segments showed soft growth, with only a 1% year‑on‑year increase, indicating challenges in these areas.

• EBITDA margin decreased to 12.3% from 13.2% in the previous year, reflecting the impact of subdued pricing and continued investments.

• Working capital was stretched, with net working capital days increasing to 102 days from 95 days in March, due to tight business conditions and long payment cycles.

• The company faces uncertainties in global markets, including tariff issues and pricing pressures, which could impact future growth and profitability.

Q & A Highlights

Q: Could you share how the new capacity expansion will ramp up and its revenue potential? A: The new plant has not yet been capitalized this quarter. The scale‑up is expected over the next two to three years, with peak utilisation anticipated by FY28.

Q: How do you plan to manage working capital and maintain a healthy leverage profile amid multiple capacity expansions? A: Capacity expansions are phased, and we are mindful of leverage. Some initiatives are exploratory and will be assessed for feasibility before proceeding.

Q: Which geographies are driving export growth, and what are the emerging markets? A: We are targeting geographies beyond the Americas and Europe, such as the Far East, Southeast Asia, and the MENA region, where we have seen growth.

Q: Can you provide a breakdown of the increase in other expenses this quarter? A: Major increases were in freight and travel expenses, along with maintenance costs of around INR 3.5 Crores.

Q: What is the strategy for the new facility until the new Reliance plant is operational? A: We will focus on manufacturing non‑ethylene oxide products, with around 50 products in the pipeline for production.

Q: How are tariffs affecting the textile chemicals business? A: Tariffs on textile exports to the US are creating headwinds, impacting sales and margins. Suppliers are sharing risks based on tariff changes.

Q: What is the revenue potential with the current CapEx? A: The CapEx is expected to deliver an asset turn of about four times at peak utilisation.

Q: How will the US sanctions on Iranian imports affect your business? A: The impact is minimal as our methanol and acetic acid imports from Iran are negligible.