Epigral Q1 FY27 Profit Rises 25% to ₹99 Crore; Board Approves Entry into Epoxy Resin with Two New Plants
Epigral Ltd, an integrated chemical manufacturer that makes chlor-alkali products and specialty chemicals like CPVC resin for hot-water pipes and epichlorohydrin for wind turbine blades, reported a 25% year-on-year rise in net profit to ₹99 crore for the quarter ended June 2026. Revenue grew 15% to ₹709 crore, driven by a 5% volume increase and improved realizations. The board also approved two new strategic projects — a 1,25,000-tonne Epoxy Resin & Formulations plant and a Multi-Purpose Plant (MPP) — both to be commissioned by the second half of FY28, marking the company's entry into a new downstream chemistry that deepens its integrated manufacturing model.
Q1 FY27 Performance: Steady Growth Despite Geopolitical Headwinds
The quarter was marked by raw material and finished goods price fluctuations, elevated freight costs, and shipment delays linked to geopolitical tensions in West Asia. Despite this, Epigral's diversified product mix helped it navigate the volatility.
| Metric (₹ Crore) | Q1 FY27 | Q1 FY26 | YoY Change | Q4 FY26 | QoQ Change |
|---|---|---|---|---|---|
| Total Revenue | 709 | 615 | 15% | 736 | -4% |
| EBITDA | 179 | 163 | 10% | 169 | 6% |
| EBITDA Margin | 25% | 27% | — | 23% | — |
| PAT | 99 | 79 | 25% | 82 | 21% |
| PAT Margin | 14% | 13% | — | 11% | — |
Q1 FY26 PAT adjusted to exclude an ₹81 crore one-time deferred tax liability benefit from shifting to the new 25.17% tax rate. Reported PAT was ₹160 crore. ()
Gross margin stood at 39% in Q1 FY27, recovering from 37% in Q4 FY26 but still below the 42% recorded in Q1 FY26. The sequential improvement was supported by better plant utilization — which remained above 80% — and normalized inventory costs. ()
Finance costs dropped sharply to ₹7 crore, down 69% from ₹23 crore in Q1 FY26 and 54% from ₹16 crore in Q4 FY26. This decline reflects a reduction in the mark-to-market impact on foreign exchange derivative swaps that had inflated interest costs in the prior year. In the Q4 FY26 earnings call, management had explained that the Indian rupee's depreciation beyond historical averages had caused a one-time hit, and that if the currency depreciates within a 2-3% range going forward, the impact would be minimal. ()
Margin Trajectory: Recovery from FY26 Lows
Epigral's margins compressed through much of FY26 before beginning to recover. The EBITDA margin fell from 28% in Q4 FY25 to a trough of 17% in Q3 FY26, pressured by lower realizations, elevated raw material costs, and high-cost inventory — particularly in CPVC, where a sharp decline in PVC prices created a lag effect on selling prices. The recovery to 25% in Q1 FY27 marks the second consecutive quarter of improvement. ()
| Quarter | EBITDA Margin | Gross Margin |
|---|---|---|
| Q1 FY26 | 27% | 42% |
| Q2 FY26 | 23% | 37% |
| Q3 FY26 | 17% | 33% |
| Q4 FY26 | 23% | 37% |
| Q1 FY27 | 25% | 39% |
Management had guided in the Q4 FY26 call that they expected to maintain EBITDA margins in the range achieved so far, and the Q1 FY27 print of 25% sits at the upper end of that band. ()
The Big Bet: Epoxy Resin and Multi-Purpose Plant
The board approved two new projects at the existing Dahej complex, both expected to commission by H2 FY28. The Epoxy Resin & Formulations plant will have a capacity of 1,25,000 tonnes per annum, while the Multi-Purpose Plant will produce downstream derivatives of Epichlorohydrin (ECH) and the Chlorotoluenes Value Chain. ()
The Epoxy Resin plant represents a significant forward integration move. It will consume internally produced ECH and Caustic Soda as raw materials, strengthening the integrated complex. The product caters to industries including renewable energy, construction, automotive, electronics, and aerospace — all sectors where Indian demand is expected to grow at double-digit rates. The MPP, meanwhile, will produce import-substitute intermediates for pharmaceuticals, agrochemicals, and water treatment chemicals. ()
This is a notable strategic shift. As recently as the Q3 FY26 earnings call in January 2026, Chairman Maulik Patel had stated that the company had "no plan to going into the forward integration" from ECH into epoxy, citing sufficient demand for ECH itself. The decision to now enter epoxy resin suggests management sees an opportunity to capture more value from its existing ECH output while de-risking through integration. ()
The company is setting up pilot plants for both projects to optimize manufacturing processes, validate product quality, and secure customer approvals ahead of commercial-scale production — a deliberate approach to de-risk the entry. ()
The presentation does not disclose the total estimated capital expenditure for these two projects. A chart shows projected capex spends of ₹195 crore in FY25, ₹394 crore in FY26, and ₹338 crore in FY27, but this covers all ongoing and new projects combined. As of June 30, 2026, Net Debt to EBITDA stood at 0.8x, indicating relatively low leverage entering this capex cycle. ()
Existing Expansions On Track for Q2 FY27
The previously announced capacity expansions are progressing as scheduled. The CPVC Resin capacity is being doubled by an additional 75,000 tonnes to a total of 1,50,000 tonnes — which the company says will be the world's largest plant by capacity. The Epichlorohydrin capacity is being expanded by 50,000 tonnes to 1,00,000 tonnes, making it India's largest. A 19.80 MW Wind-Solar Hybrid Power Plant addition is also on track. All three are expected to commission in Q2 FY27. ()
Domestic demand for CPVC is expected to grow at 12-13% CAGR, driven by plumbing applications in residential and commercial construction. India remains a net importer of CPVC. For ECH, demand is expected to grow at around 15% CAGR, with the product serving as a domestic alternative to what was a 100% imported product. ()
Once these capacities ramp up to optimum utilization — expected by FY28, with CPVC at around 75% and ECH at around 80% — the company's captive chlorine consumption is projected to rise from the current 75% to 90-95%, further strengthening the integrated model. ()
Revenue Mix Shifting Toward Specialty Chemicals
Epigral is executing a deliberate transition toward higher-value derivatives. In FY26, the Derivatives & Specialty segment contributed 52% of revenue, with Chlor-Alkali at 48%. By Q4 FY26, the derivatives share had risen to 54%. The company's stated target is for derivatives and specialty chemicals to contribute approximately 70% of revenue by FY28, driven by the ramp-up of CPVC, ECH, Chlorotoluenes, and the newly announced Epoxy Resin and MPP projects. ()
The Chlorotoluenes Value Chain, commissioned in March 2025 as India's first such facility, is still in the early stages of customer approvals and ramp-up. Management indicated in the Q4 FY26 call that FY27 would see a "sizeable contribution" from this segment, with optimum utilization of 70-75% expected by FY28. The plant produces intermediates for pharmaceutical and agrochemical active ingredients — a fully imported product category that Epigral is now domesticating. ()
Financial Position: Manageable Leverage, Heavy Capex Pipeline
Return on Capital Employed (ROCE) stood at 16% in Q1 FY27, unchanged from Q4 FY26 but down from 24% in Q1 FY26. The decline reflects lower trailing twelve-month EBIT and a sizeable capital work in progress of ₹451 crore as of March 2026, which has since grown as the expansion projects advance. Net Debt to EBITDA was 0.8x as of June 30, 2026, compared to 0.6x a year ago and 0.9x in March 2026. ()
| Metric | FY22 | FY23 | FY24 | FY25 | FY26 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,555 | 2,196 | 1,936 | 2,565 | 2,542 |
| EBITDA Margin | 33% | 31% | 25% | 28% | 22% |
| ROCE | 29% | 32% | 17% | 25% | 16% |
| Net Debt/EBITDA | 1.9x | 1.3x | 2.0x | 0.7x | 0.9x |
The company generated ₹436 crore from operations in FY26 and spent ₹394 crore on capex. Free cash flow (operating cash flow minus capex) was ₹41 crore, down sharply from ₹246 crore in FY25, reflecting the heavy investment phase. ()
Management has maintained a disciplined, step-by-step approach to capex — announcing the next round of projects only as the current ones near completion. The Epoxy Resin and MPP approvals fit this pattern, coming just as the CPVC and ECH expansions approach their Q2 FY27 commissioning. ()
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