Rossari Biotech: Navigating Growth and Innovation in Q2 FY26

Rossari Biotech Limited, a prominent specialty chemicals manufacturer, has reported a robust performance for the second quarter of Fiscal Year 2026. The company announced a significant 18% year-on-year increase in revenues, reaching Rs. 586.1 crore. This growth was primarily driven by healthy volume expansion across its core business segments: Home, Personal Care and Performance Chemicals (HPPC), Textile Specialty Chemicals (TSC), and Animal Health and Nutrition (AHN). Despite a dynamic operating environment and subdued pricing pressures, Rossari's diversified product mix and strategic initiatives helped cushion the overall impact on growth, demonstrating resilience in a challenging market.

Segment-wise, the HPPC division grew by 16%, TSC by 21%, and AHN by 29% year-on-year, reflecting sustained strength in their diversified portfolio and focused execution. The company's international business also delivered a strong performance, with exports rising 36% year-on-year in Q2 and 27% in the first half of FY26. This export growth was fueled by improved traction with key customers, increased wallet share with strategic partners, and deeper penetration into new geographies, particularly in the Far East, Southeast Asia, and the MENA region. Exports now contribute nearly 28% to Rossari's overall sales, highlighting its expanding global scale.

Strategic Capacity Expansion and Product Innovation

Innovation and Research & Development remain central to Rossari's growth strategy. Over the past six to nine months, the company's teams have developed new products, both Ethylene Oxide-based and non-EO-based, adhering to green chemistry principles. These developments strengthen Rossari's technology pipeline and enhance its ability to address global trends and export opportunities in advanced chemistries. New products include biosurfactants like sophorolipids and rhamnolipids, coco-aminopropyl butane (CAPB), CDEA, silicon block polymers, silicon surfactant, and an expanded range of spin finish products.

On the manufacturing front, Rossari successfully commissioned an additional 20,000 MTPA capacity at its Dahej facility, bringing the total installed capacity to 1,52,500 MTPA. Additionally, 15,000 MTPA of ethoxylation capacity was commissioned at Unitop, marking the first phase of a planned 30,000 MTPA expansion. The second phase of this expansion is expected to be commissioned by Q3 FY26. These capacity additions are crucial for scaling up operations across high-growth verticals such as personal care, agrochemicals, oil & gas, and pharma. The new continuous-loop ethoxylation technology at Unitop is expected to offer improved efficiency, higher throughput, and better product consistency.

Financial Health and Future Outlook

Rossari's EBITDA stood at Rs. 71.9 crore with a margin of 12.3% in Q2 FY26, compared to 13.2% in Q2 last year. Excluding the institutional and B2C verticals, the core EBITDA margin remained healthy at approximately 15%. The company acknowledged an increase in expenses, attributing it to growth initiatives, capacity expansion, and businesses in their growth phase. Management expressed confidence that as these initiatives scale up and reach operational maturity, they will contribute to margin improvement.

The net working capital was higher during the quarter, reaching 102 days compared to 95 days in March, due to stretched receivables and a long payment cycle for a major institutional sale. However, all receivables are considered good, and inventory levels were marginally high due to strategic stocking of raw materials. The company's balance sheet remains strong, supported by healthy liquidity and conservative leverage, providing sufficient headroom for ongoing growth initiatives. The total planned capital outlay of Rs. 192 crore for new capacities is expected to deliver 3-4x asset turns at full utilization, with peak utilization of the new Dahej capex anticipated by FY28.

Rossari's management is focused on disciplined execution, operational efficiency, and scaling innovation-led businesses. With investments in place, the company aims to prioritize enhancing capacity utilization, deepening market presence, and broadening its product portfolio to unlock new opportunities across customer segments and geographies. The company is committed to innovation, continuously developing tailored solutions, and expanding its global footprint through its own manufacturing setup and sales & distribution network overseas, reinforcing its confidence in delivering sustainable operational and financial performance and creating long-term value for stakeholders.