Vishnu Chemicals Limited Q3 FY26 Earnings Call Summary

Summary

Vishnu Chemicals Limited - Q3 FY26 Earnings Call Summary Friday, February 06, 2026 4:00 PM

Event Participants

Executives 2 Hanumant Bhansali (VP Finance), Siddartha Cherukuri (Joint Managing Director)

Analysts 6 Harshal, Kush Joshi, Mahek, Nirali Gopani, Raghav, Sagar Jethwani

Financials & KPIs

Geographic & Segment Commentary

• Domestic Market: Remained resilient with volume growth across electroplating, wood preservative, and pigment sectors despite unfavorable macro conditions.
• North America: Exposure currently stands at 9%; management targets 14-15% revenue share as US tariffs on chrome chemicals have dropped from 53%, facilitating volume recovery.
• European Union: Significant opportunity identified in Barium Carbonate following the EU’s 84% anti-dumping duty on Chinese imports, leading to a strong order pipeline and 10-15% price increases.
• South Africa: Acquisition of a mining complex completed; integration is underway with phased operations expected to commence in Q1 FY27 to secure raw material supply.

Company-Specific & Strategic Commentary

• Strontium Carbonate (VSPL): Successfully commercialized in Q2 FY26 with 10,000 MT capacity; acting as an import substitute for magnets/ceramics with expected regular sales from Q1 FY27.
• Backward Integration: The South African mine acquisition is the third in 3 years, aimed at stabilizing long-term margins and raw material security.
• Forward Integration (DMSO): Initiated plans for a 10,000 MT Dimethyl Sulfoxide (DMSO) plant; will be India’s only producer, targeting 12-13% market growth in agro/pharma sectors by end of FY27.
• Specialty Chemicals: Focus on niche products like Chrome Metal (6,000 MT) and Chrome Oxide Green (20,000 MT) expansion to drive higher blended EBITDA margins.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Strontium Carbonate Strategy

• Question: What is the revenue potential and competitive landscape for Strontium Carbonate? (Raghav)
• Answer: At 80% utilization, asset turns are expected at 1.5x-1.8x with gross margins of 50-52%. While a German producer holds 70% global share, VCL is the first Indian manufacturer and benefits from the removal of customs duty on celestite ore (Siddartha Cherukuri).

EU Anti-Dumping Duties

• Question: How does the 84% EU duty on Chinese Barium Carbonate impact VCL? (Sagar Jethwani)
• Answer: VCL has already seen 10-15% price increases and a strong order book. The company will raise prices in tranches to maintain customer relationships (Siddartha Cherukuri).

New Product Timelines

• Question: When will DMSO and Chrome Metal contribute to the top line? (Nirali Gopani)
• Answer: DMSO is expected to commercialize by end of FY27. Chrome Metal (6,000 MT) is linked to the Chrome Oxide expansion and is slated for FY28 (Siddartha Cherukuri).

Margin Recovery

• Question: Why have EBITDA margins been stagnant at 15% and how will they reach 20%? (Mahek)
• Answer: Margins were suppressed by high ore prices and global demand. Recovery to 20% will be driven by the South African mine (effective FY27), value-added products like DMSO, and better economies of scale (Siddartha Cherukuri).

Key Takeaway

Vishnu Chemicals delivered a steady Q3 FY26 with consolidated revenue of ₹411.3 crores and a 170-bps expansion in gross margins. The company is undergoing a significant transformation from a pure-play chrome chemical manufacturer to a diversified specialty chemicals player, highlighted by the successful launch of Strontium Carbonate and the upcoming 10,000 MT DMSO plant. Strategic moves include the acquisition of a South African mining complex to hedge against volatile chrome ore prices and a planned ₹300 crore CAPEX for FY27 to expand Chrome Oxide and Metal capacities. Management remains focused on import substitution and maximizing geographic opportunities, particularly in the EU following anti-dumping duties on Chinese competitors. With a targeted EBITDA margin of 20% by FY28, the company is positioning itself for a higher margin profile as backward integration and new product lines stabilize.