Summary
Privi Speciality Chemicals Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026 4:00 PM
Event Participants
Executives 5 Ashwini Shah (Company Secretary), Mahesh Babani (Chairman and Managing Director), Narayan Iyer (Chief Financial Officer), R. S. Rajan (President), Sanjeev Patil (Executive Vice President, Strategy and Biotechnology)
Analysts 8 Anupam Agarwal, Jaiprakash, Mann, Mohit Jain, Nikhil, Pankit, Punit Jagdish, Rohit Nagraj, Rohit Sinha, Sudhir Bheda
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹611.15 crores | +25% YoY; reported strong growth despite subdued market conditions and seasonal Q3 softness. |
| EBITDA | ₹158.00 crores | +37% YoY; margins reached 25.8% vs. 20%+ levels in the previous year. |
| PAT (Adjusted) | ₹82.00 crores | +86% YoY; adjusted for one-time Labour Code implementation and non-controlling interest. |
| 9M Revenue | ₹1,857.00 crores | +24% YoY; consistent performance across three quarters of the fiscal year. |
| 9M EBITDA Margin | 25.9% | +47% YoY growth in absolute EBITDA; driven by operational efficiencies and yield improvements. |
| Production Capacity | 48,000 MT | Current level; on track to reach 54,000 MT by March/April 2026. |
| Net Debt/EBITDA | 1.6x | Remains well within internal ceiling of 2.5x despite ongoing capex. |
| Export Mix | ~70% | High export orientation provides natural hedge and benefits from INR depreciation. |
Geographic & Segment Commentary
- International Markets: Management highlighted a significant competitive advantage over China due to confirmed 18% duty structures in certain corridors and 0% in others. Strengthening trade ties between India, the US, and Europe are expected to drive volume growth between 11-15% as global customers seek diversified, compliant supply chains.
- Domestic/Incentives: The company recognized ~₹10 crores in state incentives for 9M FY26. Management is targeting “Ultra Mega Project” status in Maharashtra by investing ₹1,500 crores by March 2027, which would provide a 9% GST benefit for 20 years.
Company-Specific & Strategic Commentary
- Prigiv JV (Givaudan): The JV achieved positive EBITDA in Q3; Givaudan is providing a ₹150 crore interest-free trade advance to reduce debt. A new ₹50 crore equity-funded capex is planned to add products via 51:49 funding.
- Multi-Phase Expansion (5k:1k Plan): A ₹1,200 crore roadmap is underway (Phase 1: ₹300cr, Phase 2: ₹600cr, Phase 3: ₹300cr) to reach ₹5,000 crore revenue and ₹1,000 crore EBITDA by FY29.
- Biotechnology & Renewable Feedstock: Developing proprietary technology to convert biowaste into value-added products like Cyclopentanone via a bio-route. Management expects to launch a 20,000-ton capacity biomass project by 2028.
- Product Innovation: First-time Indian manufacturing of Maltol and Ethyl Maltol is planned, following a “China Plus One” strategy.
- Mergers: Amalgamation of Privi Fine Sciences and Privi Biotechnologies is in progress with the NCLT, expected to conclude by late 2026, adding ~₹400 crores to top-line capacity.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹5,000 crores by FY29 | Driven by 18,000 MT addition in speciality chemicals and PFS merger. |
| EBITDA Margin | 20% to 27% | Long-term sustainable floor of 20%; cautious due to VUCA world but aiming for 25%+. |
| Volume Growth | 7% to 15% for FY27 | 7% base expectation, potentially reaching 15% as new capacities stabilize. |
| Net Profit (JV) | Positive by FY27 | Driven by debt reduction and interest savings from Givaudan’s trade advance. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical/Trade | Global tariff uncertainties and wars could impact export demand, though current duty structures favor India over China. |
| Raw Material Volatility | GTO (Gum Turpentine Oil) prices are dynamic; the company mitigates this via backward integration into CST (Crude Sulfate Turpentine). |
| Project Execution | Large ₹1,200 crore capex requires timely commissioning; FY28 is noted as a “transition year” for stabilization before the FY29 scale-up. |
Q&A Highlights
Joint Venture Economics
- Question: Will the losses in the JV be bridged next year with the Givaudan advance? (Sudhir Bheda)
- Answer: Yes, the ₹150 crore interest-free advance will significantly reduce interest costs, allowing the JV to achieve net profit in the next financial year (Sanjeev Patil/Mahesh Babani).
Product Strategy & Competition
- Question: What is the competitive landscape for the new products like Maltol and Cyclopentanone? (Rohit Nagraj)
- Answer: Privi will be the first Indian manufacturer for these products. Cyclopentanone will be produced via a world-first renewable bio-route rather than petrochemicals (Sanjeev Patil/Mahesh Babani).
Financial Strategy & Debt
- Question: Is there a cap on debt for the ₹1,200 crore capex? (Jaiprakash)
- Answer: We intend to keep Debt-to-EBITDA below 2.5x. Currently, it is 1.6x, and we expect internal accruals and bank borrowings to suffice without equity dilution (Narayan Iyer).
Margin Sustainability
- Question: Can we sustain 24-25% margins given the value-added product mix? (Rohit Sinha)
- Answer: While we guide for 20%+ to be conservative in a VUCA world, we have delivered 25%+ for three quarters and aim to maintain this through process yields and utility conservation (Narayan Iyer/Sanjeev Patil).
Key Takeaway
Privi Speciality Chemicals delivered a resilient Q3 FY26, maintaining EBITDA margins above 25% for the third consecutive quarter despite seasonal export softness. The company is executing a ₹1,200 crore three-phase expansion plan designed to catapult revenues to ₹5,000 crores and EBITDA to ₹1,000 crores by FY29. Strategic highlights include the turnaround of the Givaudan JV (Prigiv) aided by interest-free advances and a pioneering shift toward biomass-based chemistry for products like Cyclopentanone. While management remains cautious regarding global geopolitical volatility, the strengthening “China Plus One” sentiment and favorable duty structures in the US and Europe position Privi as a primary beneficiary. The upcoming merger of Privi Fine Sciences will further consolidate high-margin speciality capacities, supporting a long-term target of 20% CAGR.
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