Epigral Q1 revenue jumps 16%; announces ₹600 crore epoxy resin foray

Specialty chemicals maker Epigral reported a mixed set of first-quarter numbers on Monday, with revenue and operating profit rising in double digits even as margins came under pressure. At the same time, the company announced a significant strategic expansion into the epoxy resin and formulations business with a planned investment of ₹600 crore.

Revenue from operations for the June quarter increased 16.3% year-on-year to ₹705.4 crore, while EBITDA rose 9.7% to ₹179.2 crore. However, EBITDA margin slipped to 25.4% from 26.9% a year earlier. Net profit declined 37.9% to ₹99.7 crore, reflecting a tougher operating environment and cost pressures during the quarter.

Management said the company delivered steady growth despite volatility caused by geopolitical tensions in West Asia, which led to fluctuations in raw material prices, higher freight costs and shipment delays. Sales volumes grew 5% year-on-year, while overall plant utilisation remained above 80%.

A new growth avenue

The bigger announcement, however, came from the boardroom. Epigral approved its entry into the Epoxy Resin & Formulations business with a planned production capacity of 1,25,000 tonnes per annum, along with the setting up of a Multi-Purpose Plant (MPP). Both projects are expected to be commissioned in H2 FY28.

Epoxy resin is widely used in applications such as wind turbine blades, industrial coatings, tile adhesives, electrical insulation and automotive components.

A key advantage for Epigral is that major raw materials required for epoxy resin manufacturing, including epichlorohydrin (ECH) and caustic soda, are already produced at its integrated Dahej complex. Management said more than 50% of the raw material value for the new project will be sourced internally, improving operational efficiencies and strengthening backward integration.

Balancing near-term pressure with long-term bets

The proposed MPP will manufacture downstream products from the epichlorohydrin and chlorotoluenes value chains, catering to growing domestic demand for pharmaceutical intermediates, agrochemical intermediates and water-treatment chemicals.

To de-risk the commercial rollout, Epigral is also setting up a pilot facility for the epoxy resin and MPP businesses, expected to become operational by Q2 FY27. The pilot plant will help validate product quality, optimise manufacturing processes and secure customer approvals ahead of large-scale production.

Chairman and Managing Director Maulik Patel said the company remains optimistic about the demand outlook despite geopolitical uncertainties. He added that the new investments are intended to diversify Epigral’s product portfolio while creating a more integrated manufacturing platform.

Investors initially reacted cautiously to the earnings announcement, with the stock falling to an intraday low of ₹1,111.20. It later recovered and traded higher at ₹1,175.50 on the NSE by mid-afternoon.