Summary
Kiri Industries Limited - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026 11:00 AM
Event Participants
Executives 4 Jayesh Hirani, Manish Kiri, Ranjit Singh Chugh, Suresh Gondalia
Analysts 9 Bharat Kumar, Bhavesh Khandelwal, Buram Shetty Suresh, Govind Goyal, Harshit Gada, Kevin Gandhi, Manoj Bhura, Tanay Desai, Yashwant Rajput
Financials & KPIs (Standalone & Consolidated)
| Metric | Reported | Commentary |
|---|---|---|
| Exceptional Gain (Consol) | ₹5,854 crores | Net gain from DyStar share sale; includes legal cost reimbursement. |
| Revenue (Consol) | ₹174 crores | Sequential decline; impacted by lower volumes and subdued global demand. |
| Revenue (Standalone) | ₹162 crores | +3.0% YoY; subdued demand and competitive pricing pressures. |
| 9M FY26 Revenue (Consol) | ₹589 crores | +10.0% YoY; supported by JV performance and steady domestic demand. |
| EBITDA (Consol) | ₹53 crores | Driven by dividend income and legal cost reimbursements. |
| EBITDA (Standalone) | ₹58 crores | Impacted positively by one-time receipts despite operational headwinds. |
| DyStar Settlement | $689.03 million | Final remittance received Dec 31, 2025, ending 11-year legal dispute. |
| Pending Warrants | ₹93 crores | 5% of warrants remain pending for conversion in April 2026. |
Geographic & Segment Commentary
- Dyes & Dyes Intermediates: The segment faced challenging conditions including input cost volatility and limited pricing flexibility. Management prioritized margin protection over volume, leading to a selective approach in production and order execution.
- Lonsen Kiri (JV): Continued to deliver healthy operational and financial performance. Results were bolstered by improved capacity utilization and steady domestic demand within the region.
- Copper & Fertilizer (Upcoming): Greenfield project in Gujarat is in the site development phase. Focus is on 100% import substitution for the domestic market, utilizing renewable energy and zero liquid discharge technology.
Company-Specific & Strategic Commentary
- DyStar Resolution: The receipt of ₹5,854 crores marks a “practical reset” for the company. Funds are earmarked for capital gains tax (due March 15, 2026), debt repayment, and equity infusion for new projects.
- Copper Expansion: Phase 1 target is 5 lakh tonnes of LME grade copper (3.5 lakh via smelting, 1.5 lakh via scrap). Downstream products like copper tubes and rods will precede the smelter operation.
- Fertilizer Integration: Integrated project to convert spent sulfuric acid (smelter waste) into 1.1 million tonnes of phosphatic fertilizers (DAP/NPK). Trading of branded fertilizers will commence in 2026 to build market presence ahead of production.
- Strategic Investments: Management is exploring a 20%-40% equity stake in Makilala Mining (Celsius Resources) to secure long-term copper concentrate off-take, though project viability is not dependent on this deal.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Project Capex | ₹12,000 - ₹13,000 crores | To be deployed across FY27 and FY28 for copper and fertilizer units. |
| Revenue (Phase 1) | ₹20,000 - ₹25,000 crores | Target for FY28 (full first year of copper downstream operations). |
| Long-term EBITDA | ₹4,500 - ₹5,000 crores | Projected target once both phases are fully operational by FY30. |
| Financial Closure | By March 31, 2026 | Seeking 70:30 or 65:35 debt-to-equity ratio; currently in active progress. |
| Operational Start | April 1, 2027 | Target for downstream copper products; Smelter/Fertilizer by late 2028. |
Risks & Constraints
| Risk | Context |
|---|---|
| Execution Risk | Greenfield projects of this scale (₹13k cr) face technical and commissioning risks. Management has appointed Tata Consulting Engineers to mitigate this. |
| Environmental/Social | Smelting is historically sensitive to pollution concerns. Management is mitigating this via Zero Liquid Discharge, renewable energy use, and converting waste to fertilizer. |
| Capital Allocation | High capex requirement could strain liquidity if debt terms are unfavorable. The company is using the DyStar windfall to provide a massive equity cushion. |
| Market Volatility | Dyes business remains pressured by global demand slowdown. Recovery is contingent on textile market improvements and removal of legal cost burdens. |
Q&A Highlights
Copper Project Timelines
- Question: When will revenue start from the copper plant and what is the target? (Yashwant Rajput)
- Answer: First phase operations target April 1, 2027, with ₹20,000-₹25,000 crore revenue expected in FY28. Full EBITDA scaling to ₹4,500-₹5,000 crore within 3-4 years (Manish Kiri).
Capital Allocation & Dividends
- Question: Why not declare dividends or buybacks given the large cash receipt? (Manoj Bhura)
- Answer: The board prioritized growth after a 15-year hiatus. Funds are needed for the ₹13,000 crore capex, reaching financial closure, and paying capital gains tax (Manish Kiri).
Raw Material Sourcing
- Question: Where will copper concentrate be sourced from? (Viraj Mahadeva)
- Answer: Sourcing ties are in progress with miners in Chile, Peru, Africa, and Australia. 1 million tonnes of indicative supply is already confirmed (Manish Kiri).
Competition & Demand
- Question: Is there a risk of overcapacity with other players entering copper? (Kevin Gandhi)
- Answer: No; India’s requirement is ~1.8 million tonnes vs production of ~0.8 million. By 2030, demand will hit 3 million tonnes, leaving ample room even with Birla/Adani expansions (Ranjit Singh Chugh).
Key Takeaway
Kiri Industries reached a historic milestone in Q3 FY26 with the final resolution of the DyStar dispute, receiving ₹5,854 crores. While the core dyes business remains pressured by global macro headwinds and competitive pricing, the settlement has transformed the company’s balance sheet, allowing for the full repayment of judgment funding debt. Strategic focus has now shifted entirely to the execution of a massive ₹13,000 crore integrated copper and fertilizer project in Gujarat. This initiative aims for 100% import substitution, targeting a ₹25,000 crore top-line addition by FY28. Despite investor requests for dividends, management is firm on retaining capital to maintain a 70:30 debt-equity ratio and fund the greenfield expansion. Success now hinges on the timely execution of downstream plants by April 2027 and achieving financial closure for the remaining debt component by March 2026.
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