Q2 24/25

Nov 12, 2025

Summary

Q2 EBITDA margin improved to 19% as revenue was INR 341 crore and PAT INR 37 crore. Management expects H2 volume traction from approvals and new capacity, with next-FY growth dependent on commissioning and customer demand.

And gentlemen, good day and welcome to Balaji Amines Limited Q2 FY26 earnings call hosted by Elara Securities India Private Limited. As a reminder, all participants line 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 will now hand the conference over to Mr. Gagan Dixit. Thank you, and over to you, sir. A very warm welcome to everyone to discuss Balaji Amines Q2 FY26 result. It is our pleasure to be able to bring to you the management of Balaji Amines Limited, led by Mr. D. Ram Reddy, who is the managing director. With these words, I would now hand over the conference to the Balaji Amines management. Over to you, sir. Good afternoon, everyone. I extend a warm welcome to all our investors and stakeholders joining us to discuss the performance of Balaji Amines Limited for the quarter and half year ended September 30, 2025. During Q2 and H1 FY26, our performance reflected stability amidst evolving demand dynamics across end-user sectors. The quarter witnessed a mixed operating environment characterized by steady commodity prices and moderated demand in select pharma and agri-chem segments. Despite these external challenges, we sustained healthy margins and maintained volumes at levels comparable at last year's, underscoring the strength of our diversified product portfolio and efficient operations. On a consolidated basis, revenue from operations from Q2 FY26 stood at INR 341 crore as compared to INR 358 crore in Q1 FY26, and EBITDA came in at INR 67 crore with margins improving to 19% against 17% in Q1 FY26. Profit after tax was INR 37 crore as compared to INR 37 crore in the previous quarter. For H1 FY26, consolidated revenue stood at INR 715 crore, while EBITDA was INR 131 crore, translating into an EBITDA margin of 18%. PAT for the half year stood at INR 74 crore with PAT margin at 10%. Operationally, total volumes for Q2 FY26 were 26,165 metric ton. Broadly steady year-on-year. Within this, amines volumes were 7,068 metric ton, amines derivatives at 8,374 metric ton, and specialty chemicals at 10,107 metric ton on stand-alone basis. We continue to remain a zero-debt company with a healthy cash position and prudent working capital management. Looking ahead, we anticipate a gradual improvement in operating performance over the coming quarters as new capacities move closer to commissioning. Our DME plant at Unit 4 and N-methylmorpholine projects are advancing well and are expected to be commissioned during financial year 2025 and 2026. While the acetonitrile expansion based on an improved process is on track for commissioning in FY 2026, 2027. All ongoing projects are being funded through internal accruals, reinforcing our strong balance sheet and prudent financial management. Our subsidiary, Balaji Speciality Chemicals Limited, is making steady progress on its INR 750 crore expansion plan, which has been granted mega project status under the Maharashtra government's Package Scheme of Incentives 2019. The expansion encompasses a wide range of specialty products, including hydrogen cyanide, sodium cyanide, and EDTA and EDTA-2Na, among others. The Unit 1 brownfield expansion for EDA-based products is expected to be commissioned by September 2026, while the Unit 2 greenfield project at Chincholi is progressing with equipment installation underway and expected commissioning by December 2026. On the capacity front, the ramp-up of our electronic-grade DMC and pharma-grade propylene glycol lines remains a key strategic lever. While the financial contribution from these new segments is expected to be more visible in the coming quarters, they are aligned with the broader import substitution theme in India and will strengthen our long-term growth visibility. Given the prevailing global uncertainties near term utilization levels for some of our newly commissioned assets may remain below optimum. However, the medium to long-term outlook remains positive, supported by expanding applications in downstream sectors, import substitution opportunities, and India's growing demand for specialty intermediates. Our near-term focus remains on operational execution and achieving stable realizations, while our long-term growth strategy is anchored around product diversification, process innovation, and sustainable manufacturing practices. We continue to prioritize high-value products, disciplined capital allocation, and capacity utilization as key drivers of growth and margin resilience. In summary, while FY26 began with a measured basis, the second half is expected to reflect gradual traction as new capacities are commissioned and demand from core end markets strengthens. Our investments in R&D, cost optimization, and green chemistry initiatives continue to fortify our positioning as one of India's leading manufacturers of specialty chemicals. Now, I will leave the forum for the question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shilkumar Shah from Samiksha Capital. Please go ahead. Yeah. Hello. Thank you. Thank you for the opportunity. Am I audible? Yeah. Yeah. My first question is on the DME. What is the status of our LPG blending? See, the LPG blending we already given to the government. It is in the moving table to table in the government of India phase. In the meantime, we are also taking the PESO approvals for the cylinder as well as road tankers. Okay. How much DME is required in aerosol industry? It's approximately about 30,000-35,000 tonnes we are estimating presently. We hope this being a greener gas, we hope there will be good opportunities in the aerosol. Okay. Have we received any acceptance or approval from other? See, that is once we receive the cylinder approval, that is just recently we received that PESO approval for the cylinders about 15 days back. We expect that in coming two or three weeks, that cylinder permission will receive. The moment we receive the cylinder permission, the plant will be commissioned, then the sample in the cylinders will be submitted to the aerosol customers. Yeah. Okay. Understood. My other questions are on DMC and PG side. What is the capacity utilization on our EV-based products? See, DMC, again, these battery manufacturer are yet to take the into full swing. So we are operating at 20% capacity, which is to other fields other than the battery front. PG, we are presently giving technical and food-grade PG to various customers. We have applied for the pharma grade PG. So the moment we get the license, we will start the manufacturing of the pharma grade. What about NMP? N? NMP. NMP. NMP, we are already there. That we are ready with the battery grade NMP, and we have given some trial batches also to the one or two battery manufacturers. Okay. What are the challenges faced by our domestic EV battery manufacturers? Why they are not able to ramp up? It's very difficult to tell to me. We will have to understand from them only. In fact, we are also waiting for their gearing up into full swing. The moment they start, we are ready with all our manufacturing battery grade NMP and even battery grade DMC also. Okay. Any expectations in terms of timeline? They are saying that somebody says that by December and somebody says that from April onwards, they will be requiring bulk quantities. We are just waiting for their quick start. Understood. My last question is on acetonitrile prices. How they have moved in the last six months? See, we have existing plant. We are running on and off because we are doing the modifications in the existing plant. Right. One by one, we are doing it, and we are not operating. Hardly, we are doing about 5% or 10% because we are changing the equipment for the latest technology. As per the latest technology, we are going to produce the very high purity material at a low manufacturing cost, which will take at least first quarter of the next financial year. Okay, but has the pricing improved or has remained stable, or what's the status there in terms of pricing? It's stable, around INR 140 to INR 150. Okay, understood. Thank you so much. Thank you. Thank you. The next question is from the line of Ashish Menon from Value Research. Please go ahead. Yeah. Hi, am I audible? Yes. Just a second. Yeah. In the previous earnings call, you had stated that we would be expecting at least 10%-12% volume growth for FY 2026. Given that in the first half, the volumes have declined by 1%, how confident are you of achieving the 10% volume growth for the full year? Also, could you shed some light on what makes you confident of clear signs of inflection emerging in the second half of the year? See, we were waiting for these approvals for the two things. One is the dimethyl ether PESO approvals and other blending applications. The moment that comes, we will commission the plant before end of this quarter. Secondly, the DMC, which goes to the battery, that also we were expecting that the battery manufacturers will go in full swing, but not yet started. Thirdly, PG for pharma, we are waiting for the approval from the authority, the moment we get. These were the three things which we expected that to get the at least minimum 8%-10% growth. However, we expect these things will come in this quarter, and I hope that definitely 8%-10% volume growth should be there in this next half year. Okay, Ashish. In Balaji Specialty, once the Unit 1 brownfield project is completed, would the entire 37,000 tons per annum capacity of EDA be utilized for value-added products, assuming there is no demand challenges, or would there still be some volumes which is left that you would need to sell in the market? We are going to sell present 22,000 tons of the EDA. We will be utilizing almost 15,000-16,000 tons. There will be hardly 6,000 tons available for the selling into the market. Okay. Is there any update on the anti-dumping investigation that is going on regarding EDA? Has the oral hearings Yes, we had the oral hearing and there was this thing. One officer is retired. The officer who was investigating this has retired. Now the case has been allotted to a new officer. Probably this month then we should get another hearing, and maybe by end of the next month, we should be in a position to get some result on the anti-dumping for the EDA. Okay. So one of your pharma customers, they have backward integrated into methylamines for captive consumption. With the excess that they have, they will be selling into the market. How much does that impact your revenues as well as the overall pricing and demand in the market? I have not seen a major impact as of now. I do not know whether they have commissioned the plant. They are yet to commission the plant. But we have not seen any major impact to us. Secondly, that plant, locationally, it is in Gujarat. Our major customers towards this Maharashtra and South. Okay. So we have not seen any major impact as of now, even price point of view and the capacity point of view also. Okay, Ashish. Another thing regarding ethylenediamine. Have you considered using ethylene oxide route instead of the ethylene dichloride route for making EDA? I am thinking more from the cost perspective in order to remain competitive. In fact, we are using ethylene oxide route only. We use the ethanolamine, which is manufactured with ethylene oxide, not what you are talking, the EDC. This is ethylene oxide only. Okay, Ashish. In your opening remarks, you mentioned something about green chemistry initiatives. Could you shed some light on Yeah. See, green chemistry, as of now, we have installed a solar on the rooftop, as well as we have a separate solar park for the company. As of now, almost 80% of the manufacturing will take care of by the solar power. Okay, Ashish. That's all the questions I have. Thank you. Thank you for answering. Thank you, Ashish. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Viral Jain from SMMG Finance. Please go ahead. Yeah, hi. Thank you for the opportunity. My first question was regarding the international markets. Could you give us a more clear picture on the export momentum and whether there was any logistical or pricing challenge that was affecting the competitiveness in the overseas market? Yes. There was some period where we were facing the higher freight hit for the logistics for the exports. But as of now, it is now stable and because of some of the pharma and agro industries, a little lower, we could not achieve what we expected. But we expect in the coming quarters, definitely it should move further for the export market also. Got it. Are we seeing any long-term contracts or supply agreement being renewed or expanded in the international market? Yes, some of the contracts which we are doing like U.S. and Europe, we have continued or we got the signals for the continuity coming financial year also, for the exports to the U.S. and Europe. Okay. My last question was with regarding the financial aspect. What is the current working capital cycle and are we facing any issues with the receivable or inventory building up given the demand normalization? No. It is almost normal only. We are just not facing any problem as of now. A normal 60-90 days cycle is taking place, which is very normal in the pharma and agro market. We don't see any difficulties. Okay, sir. Got it. Thank you for the answers. That's all from my end. Thank you. Thank you. The next question is from the line of Varun Mishra from SK Investments. Please go ahead. Hello. Hello, sir. Am I audible? Yes. Yes. Yeah. Yeah. I wanted to ask a couple of questions. What is the current utilization level at our Unit 4 plant and any new plants of our specialty chemical segment? The one that major is methylamines, which is almost 80, 85% is utilization is there. Methylamines, we had to take full swing and ethylamines, presently it is used about 30, 32%. As I said earlier, for the dimethyl carbonate and PG, that is about 20% to 30% because the battery manufacturing units had to start their manufacturing in full swing. All right, sir. Could you provide an update on the progress, like any commissioning timeline upon the upcoming projects, particularly any greenfield expansions are we planning or any backward integration initiatives that we're taking? I will tell you. Number one, that N-methylmorpholine, which will be commissioned by the end of this current quarter. Number two, dimethyl carbonate is again ready for the commissioning. This is also commissioned by the first week of the next quarter. These are the two in the pipeline ready for the commissioning. Of course, DMC electronic grade, we just recently, battery grade recently commissioned, but we are waiting for the customers to start their end. All right, sir. Upon all the expansions are operational, we see in the next two quarters, we can expect that. So what could be the company's overall capacity in terms of production and what could be the incremental potential revenue as per you, if you could just guide on that? There should be, if we all plants commission and all plants run at the optimum capacity levels, there should be minimum 15% growth, values and as well as volumes also. Growth in terms of as of FY 2026 or within a year span, how is it? Next coming year, I am talking. See, because most of the plants commissioning will take place by the end of this financial year. Next financial year, there will be minimum 15% growth you can see. All right, sir. Great. I will have some questions I will follow back in the queue. Thank you so much, sir. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Dheeraj Shah from RJ Investment. Please go ahead. Hello. Am I audible? Yeah, Mr. Dheeraj. Yes. Thank you for the opportunity, sir. Congratulations on decent set of numbers. I have couple of questions. Firstly, how are your realizations trending across your major product lines, given the volatility in raw material prices, especially in methanol and ammonia? Yeah. Thank you. Thank you for understanding there, Mr. Dheeraj Shah. Very sensible question you asked. See, there is a volatility in the methanol in the recent days and even ammonia also. In spite of all these things, we could do the average out because there was some raw materials were in the pipeline at the lower cost. Now the methanol prices have started settling around below INR 30. Ammonia is also somewhere INR 48, INR 47. I think we should continue with this trend. Even methanol goes down further, we will have the doors open for the more international markets where we get more of the volumes exported, and even the margins also can be improved in the coming quarters. Understood. Also, are you witnessing any pricing pressures from particularly Chinese imports, and how are you defending margins in such a competitive environment? See, majority of the products we do not compete, only one or two products we compete with them. We are still competing. That is one dimethylformamide. We are competing for last several years, and we will continue to compete with them. On and off, as you rightly said, sometimes it is going down and sometimes prices opportunity we are getting it. Until otherwise you are there continuous in the market, you will not get those opportunities to encash. All other products, there is no problem. Only dimethylformamide we are facing little problems in the competition. Understood. Lastly, sir, if you see gross margins have fluctuated in recent quarters. What is the sustainable EBITDA margin range you expect in the near term, given current input costs and capacity utilization level? Could you guide us on that? That would be helpful. See, with the reasonable EBITDAs, we should be in a position to maintain 20%-22%. With the lowest, it should be 17.5%-18%, and maximum is 24%, what we can see it in the current competitive environment. Understood. That's all from my side. Thank you for answering the questions. All the best for the future quarter. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question is from the line of Vivek Gupta from Star Investment. Please go ahead. Yeah, hi. Am I audible? Yeah, Mr. Vivek. Yeah. Hi, sir. Could you please elaborate on the current demand environment across your key products categories like amines, derivatives, and specialty chemicals, both in the domestic as well as the export markets? The domestic market on the main products like amines and intermediates, it is stable what we can see. In the exports, there is a little volatility because of in some of the products, direct tariff and some of the product indirect tariff for the end users in the domestic market. But overall, we can see the 80%-90% stable market we are seeing. Okay. Also, sir, have you started witnessing signs of recovery in customer offtake, particularly from pharma and agrochemical segments, which are muted over the past few quarters? Yeah. Slowly it is picking up. We hope that it should pick up to the normal level unlike last one, two quarters. As you rightly said, it was very slow in the pharma front. Since it has started improving slowly, we expect in coming quarters there should be improvement and come back to the normal levels. Okay. Thank you. That is from my side and all the best for the future. Thank you, Mr. Vivek. Thank you. The next question is from the line of Nilesh Ghuge from HDFC Securities. Please go ahead. Yeah, hi. Good afternoon, Ram, sir. Good afternoon, Nilesh. Yeah. Sir, my question is on our Balaji Specialty. What is the current plant utilization, and how do you see it is panning out, let's say, in second half of FY 2026 and FY 2027? The current utilization is very low because the brownfield work is going on the plant. The brownfield activities are on the same plant. That's the reason we are running 15 days and 20 days we are working on the expansions and the modification in the plant. This will continue for this quarter and end of the next quarter also. We expect that starting of the next financial year, this brownfield will finish. Then we will see the actual capacity utilization of the unit one. Also, in the second quarter of the next financial year, we expect the unit two expansions will start. At least one or two plants will start commencing the production. Okay. If I look at the first half revenue from your subsidiary, it's about, let's say, INR 70 crore plus or minus INR 1 crore here and there. How do you see in FY 2026, because of this brownfield expansion and everything, where do you see that subsidiary revenue? Any ballpark number. It will be same, whatever we have done half-yearly. Okay. If something goes good and that anti-dumping comes, there may be improvement in the bottom line and all. Otherwise, the real benefits you will see only after completing these modifications, whereby we get all the value-added products manufactured and the margins, and even the sales also will improve in the coming financial year. You mean the cyanide and the downstream products, that is what you mean, right? No, even in the brownfield also. Brownfield also, that TETA, TEPA- Okay and the data LAP. Yes. Okay. And sir, on this acetonitrile, there is an anti-dumping imposition by ministry. Have you seen any change in the prices, and how do you see the demand? I know that your expansion is coming next year, but still you must be I will tell you, there also story is the same, because we are running the 10 days, and we are doing the modifications work in the same plant every Yeah 10 days we just stop the plant, and 20 days you work on it, another 10 days you start the manufacturing. The prices are the same around INR 140, INR 150 level prices are there. We are maintaining the inventory, producing the tenders and maintaining the inventory. We expect once this is done, because of the new technology, we expect the very cost-effective product will be produced in that plant. Even the quality point of view and the cost point of view also. We expect there should be good margins to come from the ACN in the next financial year. Okay. The margin compared to the domestic or any other player because of this process innovation, different process, right? Is my understanding correct? You are right. Cool. You are right, Mr. Rajesh. Yeah. Sir, anything on this demand? See, particularly there is a news articles on the acetonitrile demand because of this new GLP-1 drugs. So have you seen that demand or maybe the inquiries from pharmaceutical companies on this acetonitrile, and do you see that volume uptake? Not maybe in six months or nine months, but maybe you are going ahead, let's say FY 2028, 2029, with the new products, drug- Definitely. Coming up. Definitely what we can see, even not only that. Because of this cost-effective product, it is a user-friendly solvent for the pharma industry. So definitely we expect that there will be minimum growth of 7%-8% consumption point of view for the acetonitrile in the domestic market. Okay. But you are not looking at the export market. Are we open for that or? Yeah. We are doing very small. We are just doing the seed marketing. Okay. We are doing exports also. If you see the data, we are doing monthly one or two ISO tanks because we are doing very small quantity because of this brownfield modifications. Okay. Once we commence that 60 tons per day capacity, then definitely you will see the exports as well as domestic also. Okay. Yeah. Thanks a lot, sir. Thanks for answering all my questions. Thank you. Thank you, Mr. Rajesh. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I would now like to hand the conference over to management for closing remarks. Thank you very much to all our shareholders, stakeholders who have shown the interest, who are along with the company, who have given the confidence on us. We will definitely do well in the coming quarters. Thank you once again being with us. Thank you very much. On the behalf of Elara Securities India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Yeah. Thanks everyone.