Pondy Oxides and Chemicals Limited: Q2 FY26 Shines with Record Performance and Strategic Expansion

Pondy Oxides and Chemicals Limited (POCL), a prominent player in the recycling sector, has reported its strongest-ever quarterly and half-yearly financial performance for Q2 and H1 FY26. The company’s robust results are a testament to its disciplined execution, enhanced operational efficiencies, and strategic focus on value-added products. For Q2 FY26, POCL’s standalone revenue increased by 11% year-on-year to INR 634.5 crore, while EBITDA surged by 84% to INR 55.1 crore. Profit After Tax (PAT) saw an impressive 105% rise to INR 35.6 crore. On a half-yearly basis (H1 FY26), standalone revenue grew 22% to INR 1,230.7 crore, EBITDA jumped 83% to INR 98.1 crore, and PAT soared 98% to INR 63.1 crore. This exceptional performance underscores POCL’s commitment to sustainable growth and profitability.

The company’s success is largely attributed to substantial growth in production and sales volumes across its key segments, particularly Lead and Copper. Exports played a significant role, contributing 61% to the total revenue, reaffirming POCL’s strong global footprint and customer trust. The Lead segment, in particular, saw its value-added products contribute approximately 70% of the revenue, a key driver for margin expansion. The management highlighted that the increased operational efficiencies in existing plants, coupled with the consistent sale of value-added products, have provided significant headroom for improved margins. This strategic emphasis has enabled POCL to achieve an EBITDA margin exceeding 8%, a significant milestone in its journey of sustained value creation.

Strategic Roadmap and Future Outlook

POCL is firmly aligned with its Target 2030 vision, which focuses on value creation and sustainable growth. The company is aggressively enhancing its lead and copper capacities while building a presence in adjacent non-ferrous segments. Key strategic priorities include delivering over 15% volume growth, sustaining a revenue CAGR above 20%, and significantly enhancing profitability. The management aims to maintain EBITDA margins above 8% and achieve a Return on Capital Employed (ROCE) exceeding 20%, with more than 60% of revenue generated from value-added products. The company also targets a 20% reduction in energy consumption, showcasing its commitment to environmental stewardship.

Capacity expansion is a cornerstone of this strategy. Phase 1 of the lead capacity expansion at the Thervoy Kandigai plant, adding 36,000 MTPA, commenced commercial production in Q1 FY26 and operated at 50-55% utilization in Q2 FY26, with a target to reach 70% utilization in the coming quarters. Phase 2, also 36,000 MTPA, is expected to be commissioned in H2 FY26 with an estimated CAPEX of INR 20 crore. For the copper segment, POCL plans an additional CAPEX of INR 35 crore in H2 FY26 and INR 55-60 crore in FY27, targeting a total capacity of 24,000 tons by the end of FY27. The company anticipates a top line of INR 900-1,000 crore from this copper CAPEX, driven by value-added products. The plastics unit is also being relocated to the TKD facility, with production starting in December and ABS compounding planned for Q4 FY26.

Diversification and Risk Management

POCL is actively exploring diversification opportunities, with a keen interest in Lithium-ion battery recycling. The company is collaborating with ACE Green Recycling for R&D and aims for full-fledged commercial operations by 2027. This move positions POCL to capitalize on the growing demand for electric vehicle battery recycling. The company also maintains a robust risk management framework, employing a complete hedge model for raw materials through the London Metal Exchange (LME) and for FOREX exposure through banks. This proactive approach ensures stable margins and mitigates commodity and currency risks, contributing to consistent financial performance.

Strong Financial Health and Future Prospects

POCL’s balance sheet has significantly strengthened, achieving a net cash position of INR 71 crore and zero net debt. This strong financial health provides a solid foundation for future investments and growth initiatives. The company’s disciplined operations, favorable regulatory environment, experienced leadership, and continuous stakeholder support position it for consistent, long-term growth. With a clear strategic roadmap, POCL is well-equipped to redefine recycling and reinvent tomorrow, driving value for its shareholders and contributing to a sustainable circular economy.