Meghmani Organics Limited Q3 FY26 Earnings Call Summary

Summary

Meghmani Organics Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026, 4:00 PM IST

Event Participants

Executives Ankit Patel (Chairman and Managing Director), G. S. Chahal (Chief Financial Officer), Nishant Vyas (Investor Relations)

Analysts Anant Sharma (Individual Investor), Ankit Gupta (Bamboo Capital), Madhur Rathi (Counter Cyclical Investments), Nipun Sharma (VLS Finance), Praveen Sharma (Individual Investor), Rohit Sinha (Sunidhi Securities), Sunil Jain (Nirmal Bang Securities)

Financials & KPIs

Geographic & Segment Commentary

• Crop Protection: Revenue stood at ₹382 crores with a 15.3% EBITDA margin. Performance was pressured by a 14% volume decline due to 50% US tariffs on Indian 2,4-D and general export softening as overseas customers reduced inventory to avoid tariff risks. Technicals constitute 60% of the mix, while formulations have grown to 40%.
• Pigments: Reported revenue of ₹103 crores and a marginal EBITDA of ₹0.7 crores. The segment faces headwinds from a weak European economy and high energy costs, though management is implementing process automation and renewable energy shifts to improve margins to 8-9% by Q1 FY27.
• Titanium Dioxide (TiO2): Revenue was ₹19 crores with an EBIT loss of ₹20 crores. High raw material costs (Sulfuric Acid) and the temporary withdrawal of Anti-Dumping Duty (ADD) following a court challenge by the Indian Paint Association have made operations unviable, leading to a temporary plant shutdown in November 2025.
• Crop Nutrition (Nano Urea): Recorded a small revenue of ₹5 crores with a negative EBITDA of ₹0.4 crores. Management is focusing on international field trials and sample dispatches, expecting commercial scaling and 20-22% margins as utilization improves in FY27.

Company-Specific & Strategic Commentary

• Operational Rightsizing: Management has shut down the TiO2 plant to curb monthly losses and is focusing on maintenance until ADD is re-imposed and Sulfuric Acid prices normalize.
• Energy Cost Reduction: The company is transitioning to group captive renewable power (3.5 MW) starting Q2/Q3 FY27, expected to reduce electricity costs from ₹9.5 to ₹5.0 per unit.
• Product Diversification: Shifting focus from the US (25% of Agro revenue) to other geographies to mitigate tariff impacts and increasing the share of high-margin formulations.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Agrochemical Demand & US Tariffs

• Question: Why did volumes decline 14% and what is the US impact? (Ankit Gupta)
• Answer: Drop is seasonal but exacerbated by US tariff uncertainty. Customers are buying “hand-to-mouth” to avoid duty risks. Management is diversifying to non-US geographies to mitigate this (Ankit Patel).

Titanium Dioxide (TiO2) Loss Recovery

• Question: Why not shut the TiO2 business given incremental losses equal revenue? (Madhur Rathi)
• Answer: The plant was shut down in late November to reduce losses. Re-start is only planned when ADD is re-imposed and Sulfuric Acid prices fall (Ankit Patel).

Anti-Dumping Duty (ADD) Timeline

• Question: When will ADD be re-imposed? (Nipun Sharma)
• Answer: DGTR has completed the re-investigation and hearing process. A final order is expected shortly, followed by Finance Ministry notification within a few months (Ankit Patel).

Nano Urea Prospects

• Question: What is the target for Nano Urea? (Sunil Jain)
• Answer: It is early for specific volume targets, but commercial orders have started. Steady-state EBITDA margins are projected at 20-22% once revenue hits ₹10-12 crores per quarter (Ankit Patel).

Key Takeaway

Meghmani Organics faced a challenging Q3 FY26, with consolidated EBITDA margins suppressed to 7.4% due to severe macro headwinds and operational losses in the Titanium Dioxide segment. While the Crop Protection business maintained a resilient 15.3% EBITDA margin despite a 14% volume drop caused by US tariff uncertainties, the TiO2 segment remained a significant drag, leading to a tactical plant shutdown in November 2025. Strategically, the company is pivoting toward a 40% formulation mix in Agrochemicals and aggressive cost-cutting in Pigments via a 50% reduction in power costs through renewable energy. With a deleveraged balance sheet (₹128 crore YTD repayment) and no major CAPEX planned, management expects a recovery in TiO2 by Q2 FY27 and a steady-state 15-17% margin in the core Agro business as it diversifies away from the US market.