PCBL Chemical Navigates Headwinds, Eyes Future Growth in Q2 FY26

PCBL Chemical Limited, a prominent player in the specialty chemicals sector, reported a resilient performance in Q2 FY26, demonstrating strategic agility amidst a challenging global economic landscape. The company's consolidated revenue from operations stood at ₹2,164 crore, a slight increase from ₹2,163 crore in Q2 FY25. Consolidated EBITDA for the quarter was ₹278 crore, compared to ₹369 crore in the corresponding period last year, reflecting the impact of pricing pressures and external factors. Profit After Tax (PAT) for Q2 FY26 was ₹62 crore.

The quarter saw healthy growth in carbon black sales volumes, both year-on-year and quarter-on-quarter, with capacity utilization exceeding 99%. This operational efficiency underscores the company's robust manufacturing capabilities. The Aquapharm Chemical segment also contributed positively, with its specialty and solution segment witnessing a 10% improvement in gross margins, driven by a better product mix. However, the overall market environment remained soft, influenced by factors such as US tariffs on carbon black and temporary deferments in purchases following the GST rate cut in India.

Operational Resilience and Strategic Initiatives

PCBL Chemical's operational performance highlights its ability to optimize internal processes. The company achieved its highest-ever power generation and sales volume during the quarter, showcasing its integrated operational strengths. Furthermore, working capital management improved significantly, with the cycle shortening by 12 days in H1 FY26, releasing approximately ₹240 crore in cash. This disciplined financial management also led to a reduction in gross debt by over ₹300 crore since March 2025.

Strategic initiatives are a cornerstone of PCBL's future growth. The company is actively expanding its footprint in high-growth segments. A dedicated Specialty Black Line for super-conductive grades, with a capacity of 1,000 MTPA, is being commissioned in Palej, Gujarat, with commercial production expected to commence in November 2025. A brownfield expansion of 90 KTPA for the rubber line in Tamil Nadu is in its commissioning phase, slated to be operational in Q3 FY26. Additionally, the commissioning of another 20,000 MTPA Specialty Black Line in Mundra has been preponed to March 2026.

Foray into Battery Chemicals and Sustainability Focus

PCBL Chemical is making significant strides in the advanced battery chemicals space through its Nanovace initiative. The pilot plant project is on track, and the company has secured a process patent for nano-silicon for battery applications in the US, with patents anticipated in Japan, South Korea, and Europe. Patents have also been applied for carbon-silicon composites and battery-grade graphite from bio-sources. PCBL Chemical proudly stands as the first company globally to develop all three advanced battery chemical technologies: super-conductive carbons, nano-silicon, and acetylene black.

Sustainability remains a key focus, with the company achieving two significant milestones. It successfully registered under the International Renewable Energy Certificate (I-REC) platform, qualifying for credits for clean energy generated across its plants. Furthermore, PCBL Chemical was honored with the Gold Medal in the EcoVadis Sustainability Rating for FY2023-24, placing it among the top 5% of companies globally. These achievements underscore the company's commitment to sustainable growth and responsible operations.

Financial Performance Snapshot (Consolidated)

Outlook and Management Confidence

Despite the current headwinds, management expressed confidence in a steady recovery in profitability in the coming quarters. They anticipate domestic tyre demand to grow at 6-8% in FY26, driven by stronger replacement demand. The long-term outlook for carbon black demand-supply dynamics remains strong, supported by significant investments in the international tyre sector. PCBL Chemical is targeting a 50% capacity addition over the next five years across all product segments and aims to achieve an exit rate of ₹75 crore EBITDA for Aquapharm by the financial year-end. The long-term guidance for carbon black EBITDA per ton is ₹24,000-25,000, which the company remains on track to achieve.

PCBL Chemical Limited is strategically positioning itself as a multi-chemistry platform focused on innovation, scalability, and localization. By expanding capacity, leveraging digitalization, and partnering with global technology leaders, the company is creating future-ready solutions, reinforcing its commitment to sustained growth and long-term value creation for its stakeholders.