Lords Chloro Alkali Limited: Powering Growth with Green Chemistry and Strategic Expansion

Lords Chloro Alkali Limited, a prominent player in the Indian chemical sector, has reported an exceptional financial performance for the second quarter and half-year ended September 30, 2025. The company's results highlight a period of robust growth and strategic execution, underscoring its successful transition towards a more sustainable and efficient operating model. With a strong focus on green chemistry and significant investments in renewable energy, Lords Chloro Alkali is not only achieving impressive financial milestones but also setting new benchmarks for environmental responsibility within the industry.

For the half-year (H1 FY26), the company's total income surged by 59.22% year-on-year, reaching an impressive INR 201.24 crore. This growth was primarily fueled by higher sales volumes and stronger price realizations for its core products, including Caustic Soda Lye and Chlorinated Paraffin Wax (CPW). The EBITDA for H1 FY26 stood at INR 41.78 crore, marking an extraordinary year-on-year growth of 378.47%, with EBITDA margins expanding significantly to 20.76%. Profit After Tax (PAT) also witnessed a remarkable increase of 743.12% year-on-year, reaching INR 19.49 crore. The second quarter (Q2 FY26) alone contributed significantly to these figures, with total income at INR 100.77 crore and EBITDA at INR 21.09 crore, demonstrating consistent quarterly performance.

Financial Highlights

Note: EBITDA includes other income. All figures are in INR Crore unless otherwise specified.

Strategic Pillars: Green Energy and Capacity Expansion

The impressive financial performance is deeply rooted in Lords Chloro Alkali's strategic initiatives, particularly its aggressive adoption of renewable energy. The company has successfully reduced its power and fuel charges from 51% of production costs in FY25 to 39% in H1 FY26. This significant reduction is a direct result of commissioning a 16 MW solar plant in Bikaner during FY25, which now meets approximately 10% of its power requirements and generates annual savings of INR 12 crore while reducing carbon emissions by 17,000 tons. Building on this success, the company acquired a 26% equity stake in a 10 MW hybrid wind-solar project with Continuum Green Energy, further boosting its renewable energy footprint to about 25%.

Looking ahead, Lords Chloro Alkali has announced a new strategic capital expenditure plan of INR 165 crore for FY26-FY28. This comprehensive plan includes expanding caustic soda capacity from 300 TPD to a net 360 TPD (after decommissioning an older 40 TPD plant), establishing a new 100 TPD sulphuric acid unit, and adding another 21 MW captive solar plant. These investments are projected to increase the company's renewable energy share to 40-50% of its total power consumption, further stabilizing margins and reducing exposure to volatile energy prices. The expansion of CPW capacity from 50 TPD to 100 TPD by FY27 end is also crucial for enhancing captive chlorine utilization and strengthening the revenue contribution from downstream products.

Market Dynamics and Future Outlook

Lords Chloro Alkali operates in the Indian caustic soda market, which has a total capacity of approximately 6 million tons and operates at a healthy 80-85% utilization rate. The demand for caustic soda is growing at 5-6% annually, driven by various end-user industries like paper, alumina, textiles, soaps, and pharmaceuticals. India is also emerging as a net exporter of caustic soda, benefiting from European capacity shutdowns due to high energy costs. The company's strategic location in North India provides a significant freight advantage, protecting its pricing power in the region.

Management anticipates that the caustic soda market will remain stable in the coming quarters, with potential for an upsurge in prices. The company's disciplined capital allocation, focusing on internal accruals and manageable debt (targeting a debt-to-equity ratio of 1-1.2), ensures balance sheet strength while funding growth. The payback period for solar investments is expected to be less than five years, highlighting the economic viability of its green initiatives.

Conclusion: A Green Chemical Powerhouse in the Making

Lords Chloro Alkali Limited is clearly on a transformative journey, evolving into a modern, efficient, and sustainability-driven enterprise. The Q2 and H1 FY26 results, coupled with ambitious strategic capex plans, demonstrate a clear commitment to growth, operational excellence, and environmental stewardship. By embedding renewable energy into its core operations and expanding its value-added product portfolio, the company is not only enhancing its financial resilience but also positioning itself as a leading 'Green Chemical Company' in India. This strategic clarity and disciplined execution are expected to drive sustained growth and value creation for stakeholders in the years to come.