Ladies and gentlemen, good day and welcome to Vinati Organics Limited Q4 FY 2026 earnings conference call, hosted by Nuvama Institutional Equities. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Archit Joshi from Nuvama Institutional Equities. Thank you, and over to you, sir.
Good afternoon, everyone. Thank you for joining the Q4 FY 2026 earnings conference call of Vinati Organics Limited. We have with us from the management today, the CEO and Managing Director of the company, Vinati Saraf Mutreja, CFO of the company, Gulshan Kumar Sakhuja, and AGM Corporate Finance, Aditya Churiwala. We will begin the call with opening remarks from the management, followed by a Q&A session. Before beginning the call, I would like to state that the conference call may contain forward-looking statements, which are subject to management's discretion and judgment and may not materialize as projected given the business risks associated. Now, without further ado, I would like to hand over the call to the management. Over to you, Gulshan. Thank you.
Thanks. Good afternoon, everyone, and thank you for joining us for FY 2026 results conference call. I will begin with an overview of our financial performance for the quarter and the fiscal year ended 31st March , 2026. On a standalone basis in Q4 FY 2026, net income including other income increased by 17%, rising from INR 538 crore in Q3 FY 2026 to INR 631 crore. EBITDA grew by 20% to INR 203 crore compared to INR 169 crore in the previous quarter. Profit after tax registered a strong growth of 27%, increasing from INR 108 crore to INR 137 crore. For the full year, net income including other income remained stable at INR 281 crore. However, EBITDA grew by 17% to INR 741 crore from INR 630 crore in FY 2025.
While PAT increased by 18% to INR 488 crore, compared to INR 415 crore in the previous year. On a consolidated basis in Q4 FY 2026, net income including other income increased by 16%, rising from INR 540 crore in Q3 FY 2026 to INR 624 crore. EBITDA grew by 15% to INR 191 crore compared to INR 165 crore in the previous quarter. Profit after tax registered a strong growth of 23%, increasing from INR 101 crore to INR 123 crore. For the full year, net income including other income remained stable at INR 280 crore. However, EBITDA grew by 13% to INR 707 crore from INR 625 crore in FY 2025.
While PAT increased by 9% to INR 404 crores compared to INR 405 crores in the previous year. Moving to operational performance, our business segments continued to perform resiliently in the context of prevailing market conditions, quoted by operational improvement and a strong customer-centric approach. Our global market share in ATBS remained robust, reinforcing our leadership in this segment. While demand softened from October 2025, impacting our ability to meet the full year target, we have witnessed a recovery and expect approximately 15%-20% volume growth in FY 2027. Butyl Phenol segment delivered steady performance in FY 2026, and we anticipate moderate growth in FY 2027, supported by improving demand conditions. IBB and HP-MTBE reported a stable performance during the year, and we expect both products to achieve double-digit growth in FY 2027. IBB volumes declined by approximately 20% compared to FY 2025.
This is partly attributed to the unavailability of key raw materials involved in the manufacturing of IBB on account of Iran war. This constraint has now been allied and production and sales are back on track. Our customized products segment recorded strong growth of 10% year-on-year, driven by increased customer demand. Our antioxidants business delivered an impressive 15% revenue growth in FY 2026, despite a challenging market environment. We expect this segment to maintain strong momentum in FY 2027, supported by market expansion and ongoing product development. Overall, we are targeting approximately 15% volume growth at the company level in FY 2027. Turning to capital expenditure, our investment strategy remains closely aligned with our long-term growth objectives. In FY 2026, we invested approximately INR 270 crores in CapEx, including investment in VOPL towards capacity expansion, new product development, and operational scalability.
We successfully completed our ATBS capacity expansion during the year, significantly enhancing our ability to meet growing demand. Our commitment to innovation remains strong. The R&D team is currently working on new products, which upon successful trials could form the basis for the next phase of capital investment in the coming quarters. Looking ahead, we have earmarked approximately INR 200 crores-INR 250 crores of CapEx for FY 2027, ensuring continued investment in capacity expansion, innovation, and operational efficiency. Under VOPL, a 100% subsidiary of VOL, a few projects require process re-engineering, which is expected to take approximately six months with revenue contribution anticipated from Q3 of FY 2027 onwards. We would like to highlight that our company has been achieving all its expansion goals through internal tools and it remains debt-free.
In addition, the company has a trading of approximately INR 190 crores as on 31st March 2026. The board of directors has recommended a dividend of INR 8.50 crores per equity share of face value of INR 1 crore for the financial year 2025-2026 subject to the approval of the shareholders at the ensuing AGM. Thank you. I now welcome your questions for the Q&A session. Over to you, Ajay.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Rohit Nagaraj from 360 ONE Capital. Please go ahead.
Thanks for the opportunity, and congrats on good set of numbers. First question is in terms of the new product that we are planning to introduce. These products, which particular user segment are being targeted and when do we expect the projects to be commissioned? As of now, beyond the current ATBS capacity expansion and few other products, we do not have any other projects which are under commissioning. Just a broader understanding on the future growth prospects from the products and CapEx perspective. Thank you.
Yeah. Good afternoon. Some of the products that are under implementation, most of them are downstream processes, as in downstream integration for our products, value-added products. They will be catering to segments such as the fragrance industry, such as personal care, antioxidants in the food additives business. Most of them, I think what is important, they are niche chemicals. We are targeting niche chemicals going forward. Some are also in the plastic segment.
Right. These particular projects will come online sometime during FY 2027, and slowly we will find the revenues coming from FY 2028?
In this current financial year, 2026-2027, you can expect two or three projects are in the pipeline, and it is expected to come in the second half of this financial year.
Yeah. Revenues in 2028. You are right.
Okay, perfect. Thanks. The second question is, if you can just provide us FY 2026 revenue breakup across the large number of products. That will be really helpful. Thank you.
If I go with the breakup in a percentage terms, you can say one-third approximately is attributable to the ATBS, and 45% you can say in that range. Around 15%-20% is in the form of antioxidants, AO. 10%-12% in the form of IBB. 10%-12% in Isobutylene. And rest others, that you can say the customized and other products.
Perfect. Just one last I have given. In terms of the raw material availability and supply chain, both in terms of imported product and our exports, what is the current situation that we are facing over the last couple of months? Any challenges thereof, and how have we mitigated them? Thank you.
At the initial stage, if I talk about when this war was started in the month of Feb, we earlier thought that there would be some challenges that would come in the form of availability of raw material and logistics. But somehow, in the initial stages, we saw some issues. But now overall everything has been cleared, and now we have been not facing any sort of non-availability of raw material, and as far as the logistics is concerned, it is stable.
Yeah. It's quite stable right now.
Perfect. Thanks a lot for answering all the questions, and all the best.
Thank you. Next question is from the line of Surya Narayan Patra from PhillipCapital. Go ahead.
Yeah, thanks for the opportunity, ma'am. My first question is on the ATBS side. We have seen indicated that there was some volume impact as well as price-related impact that we would have seen in the current fourth quarter. Can you give some sense that, obviously it seems that in the U.S. market, we would have seen the benefit of the pro-oil policy of the U.S. government, but it was looking like from the various data point that the volume demand in non-U.S. market, it was a bit slow or low. Any challenges that we are facing in terms of the ATBS volume in the non-U.S. market now? What would be our outlook?
The ATBS remains a stable product. Of course, there are fluctuations geographically and more related to stocking, destocking. Generally, I still think, given the oil prices, and I think this product is still on a growth path in a two-digit numbers annually. Having said that, we have expanded our capacity. There is one or two smaller capacity that has come up. Given all of that, I think, from an ATBS business purely, I would personally expect, say, 15% volume growth year on year, at least for the next three years, and which should take care of our expansion.
Regards ATBS again, the second phase of the expansion, whether that would be required in this current financial year or not?
Well, actually, it will come into effect by October. But yes, I think more utilization will happen next financial year, more in FY 2028.
Sure. One clarification, ma'am, whether you mentioned that Veeral Organics would not be contributing anything in this current financial year, FY 2027?
As far as our 100% subsidiary, VOPL is concerned, this year means there was hardly any sale, around INR 10 crore in that.
In 2026.
In 2026.
In 2027, we are expecting about INR 100 crore-INR 120 crores after the re-engineering is done.
So there-
Yeah, please. From third quarter onwards, you will see the revenue from our 100% subsidiary.
Correct.
Okay. There were two major project groups. It was like MEHQ, Guaiacol, the first one, which has already been commissioned. Would that revenue stream be coming active in this current financial year mark, for INR 100 crore revenues.
Yes, that is absolutely the main one.
Sure. This last one, you mentioned about the CapEx of around INR 250 odd crore. If you can just elaborate what are the kind of CapEx projects that you would be considering this year?
Earlier, there will be value-added products of our existing products, going into industries such as food additives, fragrance industry, plastic additives.
Okay. Which value chain basically, ma'am, that I wanted to know.
Okay. I'll tell you. We will be making a derivative of MEHQ. We will be making derivatives of Butyl Phenol. We will be adding a couple of antioxidants. Future, now, again, we have not announced part of this CapEx, but going forward, we may be looking at more monomers and polymers also, but that is not confirmed yet.
Okay. Just last one clarification from my side. You possibly somewhere mentioned that the Butyl Phenol capacity is fully utilized currently. Are we thinking of expanding that further from the current 50,000 odd ton capacity, or we are thinking of reducing the externalities here and using actively more so that our growth plans would be achieved?
I think Butyl Phenol capacity currently is around 70%-75% utilization. And honestly, I don't have space for increasing there. So if the AO demand goes up, it will be first used for CapEx, assuming that, cost of externalities, and then we will see.
Sure. Okay. Yeah. Thank you, ma'am. Wish you all the best.
Thank you. Next question is from the line of Dikshant Gupta from Geojit PMS. Please go ahead.
Good afternoon, ma'am, and thank you very much for the opportunity. So just first clarification was I wanted to know what is the use case of ATBS like EOR and water treatment and other uses?
You know the uses already. You are telling me.
No, I mean the percentage-wise.
No. See, it depends on the polymer. ATBS-based polymers, ATBS can be combined with acrylonitrile, it can be combined with acrylic acid, with other monomers. It can go up to 10% to 33% of these polymers can have ATBS or amps component. Those polymers, like in oil recovery, they are used for oil rigging. These polymers have other uses also, such as in super absorbent or personal care industry or detergents or the mining industry or water treatment also.
Do you see any big opportunity in LNG extraction since a lot of share is probably expected to shift to U.S. in that?
Are you talking about shale gas?
Yes.
It is used in fracking also, but see, we don't supply to these guys directly. We supply ATBS to the polymer manufacturers, and those polymer manufacturers would be combining it with other monomer, making a polymer, and then supplying to, say, ONGC or Halliburton or Schlumberger.
Okay. Have you seen any price changes in ATBS and ATB compared to the last year?
It remains stable. We follow our formula-based pricing mechanism, and that's where it is at.
Okay. Thank you so much. That's all from my side.
Thank you. Next question is from the line of Abhijit Akella from Kotak Institutional Equities. Please go ahead.
Yeah. Good afternoon. Thank you so much. Just to clarify, this capital work in progress of INR 210 crores approximately at the end of the year.
Yes.
Which specific projects would that pertain to right now? One extension is, of the INR 250 crore CapEx we are projecting for next year, FY 2027, how much of that would come in VOPL subsidiary?
If we back calculate this INR 250 crore that we have projected for FY 2026, 2027, in VOPL, it will go around INR 40 crore- INR 50 crore, not more than that. INR 200 crore would be under-
Vinati Organics
Vinati Organics, our main holding company. If I talk about the CWIP of INR 200 crore, out of that, INR 60 crore to INR 70 crore is yet to be capitalized under the capacity, 100% capacity, that is VOPL. The rest there are certain products which are under the implementation stage and under the CWIP, that is why it has been shown under CWIP. This INR 120 crore, INR 25 crore of CWIP in VOPL, this will get capitalized in this financial year.
Okay. ATBS capacity right now is 50,000 tons, is it, after the phase one commissioning?
Yes. See, again, it depends on which molecular weight we are talking about. Earlier it used to be the lower molecular weight was 50,000 tons. Today, the demand is more for the high purity. Then it becomes 40,000 tons. Yes, each phase is 10,000 tons.
Got it. Would it be possible to just sum up how much the two phases together are costing in terms of CapEx? I know we had given some number previously, but just to get an update on that number.
Vinny?
It is around INR 250 crore. You can say that.
I thought INR 300 crore, but anyway.
INR 250 crore, including second phase.
Okay.
Around INR 300 crore. Got it. Yeah. Thank you so much. Just one last thing from my side. With regard to the process re-engineering at VOPL, any further color you might be able to share, which products specifically and what exactly is required there in terms of taking it forward?
Initially, we went for a new process, and we faced some teething troubles there. Then we went to the main consultant and realizing some re-engineering is required. The plant is presently under re-engineering, and hence it should be done by September, and we expect production from October and so on and so forth.
Okay. The Anisole we are producing, proceeding to produce in-house or sourcing from outside?
Anisole we will be producing in-house.
Okay. Got it, ma'am. Thank you so much, and wish you all the best.
Thank you. Next question is from the line of Archit Joshi from Nuvama Institutional Equities. Please go ahead.
Ma'am, thanks for the opportunity. I have two quick questions. In VOPL, the line of products that you were planning earlier, within which I believe 4-MAP is facing certain challenges due to backward integration done by a few customers. That is what we heard. Have we made any plans to discontinue that, or would we be still going ahead with the same line of products? If yes, then where are we in commissioning 4-MAP and Iso Amylene derivatives?
Iso Amylene derivatives have been dropped. As of now, we are not pursuing. We are making a proper Actually, that is right. We are making a proper PA. Iso Amylene has been dropped, the tertiary amine alcohol as well as PTBP. 4-MAP also we will produce. I have not heard of any customer backward integrating. In fact, we may make something from that product. None of this is dropped. The plans remain the same.
Sure, ma'am. Also for the same kind of gross block addition that we were discussing earlier, roughly INR 500 odd crores, if I recall correctly, the asset turn you were planning earlier was around one time. Should that be the same in projections for us?
Yeah, it is between one to one.
Got it. One last final one on antioxidants, I believe that the plan that we had was obviously to consume Butyl Phenol internally, and that could have dropped the potential of Butyl Phenol's external sales, and in turn, we would have had a bit more extra on antioxidants, let's say around INR 700 crores, INR 800 crores kind of revenue of AO. Just wanted to clarify if that also is on track and if it's INR 700 crores, INR 800 odd crores, when do we plan to achieve that scale in revenues? That would be the last one. Thanks again.
It's on track, both AO and Butyl Phenol. If you do the range of INR 800 crore-INR 900 crore, we will see that in next two years.
Sure, sir. Thank you. Thanks.
Thank you. Next question is from the line of Niharika Kamani from CapGrow Capital. Please go ahead.
Hello. Hi. My first question is on the ATBS capacity utilization, front-end capacity utilization, and do we have any order backlog till now? My second question is more on the industry level. The sector had faced many headwinds in terms of channel destocking, pricing pressure, demand softness, Chinese overcapacity.
Sorry to interrupt, Niharika. Your voice is breaking. It is not very clear.
Can you hear me now?
Yes, please go ahead.
Hello.
Yes, clear.
My first question was on the ATBS capacity utilization, and is there any order backlog for ATBS? My second question is more on the industry level. The sector had faced many headwinds, such as channel destocking, pricing pressure, Chinese overcapacity, U.S. and demand softness. Where is the industry headed now and where does Vinati Organics stand among these parameters?
See, ATBS is, presently we are running at, I would say about 80% capacity utilization, 75% even after the expansion. We are doing pretty good in that regard. What was your second question? The industry growth I mentioned earlier, ATBS does see a double-digit industry growth year- on- year given its varied applications, as well as use in oil and gas.
Yeah. My second question was more in terms of sectoral headwinds that the company has been facing, say, for last couple of years. What are your views? How long will these headwinds continue? Are we on the recovery path in terms of channel de-stocking, pricing pressure, dumpings from China? What's your take on ADD on antioxidants, like is the matter still pending? Are we positive on it?
Sure. First of all, we did not hear back for the ADD on antioxidants, which means it was rejected. We have reapplied again for it, because we have a strong case. I believe in the period, about 80% or 90% applications of ADD were rejected, and the Ministry of Commerce and Industry is in talks with the Ministry of Finance to give an explanation. Nevertheless, we have reapplied, and if it is to come through, it will still take another six to eight months or nine months for us to hear anything. Talking about the headwinds, yes, the sector has seen a lot of cyclicality in the last few years. Cycles have shortened. People overreact, demand, supply. Suddenly the customers panic and they want to buy a lot, and then suddenly they realize they have overstock. The same with raw material pricing.
The fluctuations are steeper than it used to be earlier, as well as with logistics. I think on the whole, our company has managed these fluctuations quite well. Given that the products that we are in, we still have strong positions and we are able to maintain our margins. We're able to pass on the price decreases and increases, same for logistics costs. That puts us in a reasonably good position. We constantly keep adding products and we continue to do so without debt, and that will remain the policy going forward as well.
Understood. Thank you so much.
Thank you. Next follow-up question is from the line of Abhijit Akella from Kotak Institutional Equities. Please go ahead.
Yeah, thank you so much for the follow-up. Just one clarification on the margin trajectory. So we saw sharp expansion in margins through most of last year. How are we seeing the environment this year? What's the outlook for margins for the upcoming year? Thank you so much.
I think I'm maintaining the margin of 26%-27%, because given expansion, new products, raw material fluctuations, I think that's a reasonably achievable EBITDA margin on a long-term basis.
Okay, understood. Thank you so much.
Thank you. Next question is from the line of Prashant Shah from DAM Capital Advisors. Please go ahead.
Hello. Thank you so much for allowing me to ask the question. Is my voice audible?
Yes. Please proceed with your question.
Congratulations for such excellent numbers. Ma'am, as you mentioned that there is cyclicality that we are seeing in the past couple of years. From a longer term perspective, if you were to look at the business in the next, say, two to five years, are we looking to diversify in other type of chemicals or any organic expansion by taking on more debt? Or are we not looking to go a little bit aggressive?
We are looking at organic expansion. We have a good pipeline of products under commissioning, as well as products in the R&D phase. We do feel that every year we should be investing around INR 250 crore or INR 300 crore for the next three to five years. That's the growth trajectory that we are looking at.
Okay, thank you so much, ma'am. Just one more question. What is the current capacity utilization for the AO plant? I believe it was 50% when you posted a 70% revenue growth in FY 2025.
Yes. FY 2026 has been similar to FY 2025, maybe 5% growth or something.
Okay. I'm missing out on something. Why have you not been able to see the amount of growth that you were anticipating when you started?
There is competition from China in antioxidants and hence the applications for the ADD, and that situation hasn't changed. They are undercutting and selling quite aggressively.
Okay. Thank you so much, ma'am.
Thank you.
Thank you. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.
Yeah. Thank you. Thank you for taking the interest and asking probing questions. We look forward to hosting you again. Thank you.
Thank you.
Thank you so much, sir. On behalf of Nuvama Institutional Equities concludes this c onference, thank you all for joining us, and you may now disconnect your lines.