Epigral shares gain 9% post Q2 — Net profit up 27.5%; maintains positive outlook for H2 of FY27

Shares of Epigral gained 9% on Monday, November 2, after the company reported its second quarter results.

It reported a 27.5% increase in its consolidated net profit at ₹65 crore in the second quarter of FY27, compared with ₹51 crore in the corresponding quarter last year.

The company's revenue from operations rose 27.1% to ₹746 crore in the September quarter from ₹587 crore in the previous year.

The company's operating performance remained subdued, with its earnings before interest, taxes, depreciation and amortisation (EBITDA) increasing 2.9% to ₹136.2 crore, compared with ₹132.3 crore in the prior fiscal.

Its EBITDA margin contracted 420 basis points to 18.3% in the second quarter from 22.5% in the year-ago period, and the company cited elevated raw material prices for the same.

The company's chairman and managing director Maulik Patel said Epigral delivered revenue growth of 28% during the quarter, driven by higher volumes and improved realisations, despite a challenging operating environment.

"With the second half of the fiscal traditionally delivering stronger performance than the first, we maintain positive outlook for the second half of FY27," Patel said.

Epigral expansion projects

The company said its capacity expansion projects in chlorinated polyvinyl chloride (CPVC) resin and epichlorohydrin (ECH), along with its wind-solar hybrid power plant, are in the final stages. These projects are expected to be commissioned within a quarter.

The CPVC resin expansion involves an additional capacity of 75,000 tonnes per annum (TPA), taking the total capacity to 1.5 lakh TPA. The expanded facility is expected to be commissioned in Q3FY27.

Similarly, the ECH expansion will add 50,000 TPA of capacity, taking the total to 1 lakh TPA. This project is also expected to be commissioned in the third quarter of this fiscal.

Epigral said demand for CPVC in India is expected to grow at a compound annual growth rate (CAGR) of around 12-13%, while ECH demand is projected to expand at a high double-digit rate.

Separately, the company's board has approved capital expenditure for two new projects at its existing complex in Dahej, Gujarat.

These include an epoxy resin and formulations plant with a capacity of 1.25 lakh TPA and a multi-purpose plant (MPP) catering to the downstream ECH and chlorotoluene value chains. Both projects are expected to be commissioned by the second half of FY28.

The epoxy resin project is aimed at tapping growing domestic demand, which the company expects to expand at a double-digit rate. Its products will cater to industries such as construction, renewable energy, automotive, electronics, infrastructure, marine, aerospace and industrial flooring.

The MPP project will focus on import-substitute products and cater to demand from agrochemical and pharmaceutical intermediates, as well as water treatment chemicals.

Epigral said its derivatives and specialty chemicals business contributed 57% of revenue during the period. This contribution is expected to increase further as the new projects become operational.

Stock reaction

Shares of Epigral gained 9% to hit an intraday high of ₹953 per share. The stock was up 8.6% at 949 apiece at 2.50 pm. The stock has fallen 6.6% in the past month and is down 26.7% this year, so far.

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