PCBL Chemical Limited Q3 FY26 Earnings Call Summary

Summary

PCBL Chemical Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 03, 2026 15:00 hrs India Time

Event Participants

Executives 4 Anand Kumar (Group Head, Investor Relations), Nilesh Koul (Managing Director), Pankaj Kedia (Executive Director, Investor Relations), Raj Gupta (Chief Financial Officer)

Analysts 6 Aditya Khetan (SMIFS Institutional Equities), Ashwini Singh (Santosh Finlease), Bharat Seth (Quest Investment Advisors), Disha (Sapphire Capital), Radha (B&K Securities), Sanil Jain (Ambit Capital), Sanjesh Jain (ICICI Securities), Shashank Kanodia (ICICI Securities), Suyash (Mangaldas Venichand)

Financials & KPIs

Geographic & Segment Commentary

• Domestic Market: Volume grew 6% YoY to 89,615 MT. Management expects robust single-digit growth (5-6%) driven by tyre industry investments and recent GST cuts improving affordability.
• International Market: Export volumes fell 13% YoY to 51,656 MT due to US tariff uncertainty (50% rate) and inventory destocking. Management anticipates a rebound following the India-US trade deal reducing tariffs to 18%.
• Specialty Carbon: Sales volume increased 17% YoY. Focus remains on high-margin grades for semiconductors, data centers, and AI applications, with a new 20,000 MTPA line pre-commissioning in Mundra.
• Aquapharm (Specialty Chemicals): Performance was impacted by a 23% QoQ decline in oil & gas due to lower US rig counts. Green chelates (GLDA/IDS) are seeing new allocations from P&G and Henkel.

Company-Specific & Strategic Commentary

• Cost Optimization Project: Launched a company-wide initiative targeting ₹200 crores in cumulative savings over two years. Focus areas include yield improvement (1-2% target), logistics, and procurement diversification.
• Feedstock Diversification: Evaluating coal tar as an alternative to CBFS to reduce concentration risk and leverage a current price differential of ~$200/ton.
• Battery Materials (Nanovace): 80-ton pilot plant for battery energy applications expected by March 2026. Management targets a ₹1,700 crore topline at full utilization from the planned 2,000-ton commercial plant.
• Capacity Expansion: Commissioned 60,000 MTPA brownfield rubber black in Tamil Nadu; total capacity now 850,000 MTPA.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

US Tariff Impact

• Question: How much volume was lost due to US tariffs? (Aditya Khetan)
• Answer: Hard to quantify, but customers were unwilling to commit due to uncertainty. The effective tariff is now ~8-9% after offsets, which will improve competitiveness against Asian peers (Nilesh Koul).

Aquapharm Recovery

• Question: Why has Aquapharm not ramped up as expected? (Aditya Khetan)
• Answer: Impacted by seasonality and lower oil rig counts in the US. However, 30% capacity was recently added. New orders from P&G and potential anti-dumping duties on HEDP/ATMP from China provide strong tailwinds (Pankaj Kedia).

Nanovace Commercialization

• Question: What is the timeline and revenue potential for Nanovace? (Suyash)
• Answer: Pilot live by March 2026. Commercial plant (2,000 tons) by end of FY28. At full utilization (FY29/30), it can generate ₹1,700 crore revenue with 50% EBITDA margins (Nilesh Koul/Raj Gupta).

Cost Savings Target

• Question: Can you elaborate on the ₹200 crore cost saving plan? (Radha)
• Answer: Multifaceted project involving refractory changes for 1-2% yield gain, digital analytics for productivity, and logistics optimization. Pilots are finished; horizontal deployment starts now (Nilesh Koul).

Key Takeaway

PCBL reported a challenging Q3 FY26, with consolidated EBITDA at ₹231 crores and carbon black volumes declining 2% YoY to 141,271 MT, primarily due to a 13% slump in exports linked to US tariff uncertainty and global destocking. Despite these headwinds, domestic demand remained resilient (+6% YoY), and specialty black volumes grew 17%. The company has pivotally secured a reduction in US tariffs from 50% to 18% and is embarking on a rigorous ₹200 crore cost-optimization program. Strategically, PCBL is diversifying into battery materials with its Nanovace pilot and expanding Aquapharm’s reach through new contracts with P&G and Henkel. Management maintains a long-term PAT guidance of ₹2,500 crores by FY29, supported by a healthy net debt reduction of ₹400 crores in 9M FY26. Improved trade relations via new FTAs and stabilized crude prices are expected to drive a recovery in margins and export volumes starting Q1 FY27.