Galaxy Surfactants Navigates Q2 & H1 FY26 Amidst Global Headwinds and Strategic Shifts

Galaxy Surfactants Limited, a prominent global supplier in the chemical industry, recently announced its financial results for the second quarter and half year ended September 30, 2025. The period was characterized by what management described as "short-term turbulence" across markets, necessitating tactical adjustments while maintaining a focus on long-term opportunities. The company reported a consolidated total revenue of ₹2,621.1 crore for H1 FY26, with Performance Surfactants contributing ₹1,681.4 crore (64%) and Specialty Care Products accounting for ₹939.7 crore (36%). Despite the revenue figures, the company's EBITDA experienced a decline of 5% year-on-year in H1 FY26 and 15% quarter-on-quarter in Q2 FY26, reflecting the challenging operating environment.

The decline in profitability was primarily attributed to a confluence of factors, including global tariff headwinds, particularly the imposition of 50% US tariffs on exports from India. These tariffs not only impacted existing businesses but also caused delays in pipeline projects. Elevated raw material feedstock prices, especially fatty alcohol, remained buoyant due to lower-than-expected Palm Kernel Oil output, further squeezing margins and prompting customer reformulation efforts. Domestically, India's performance faced temporary headwinds as a GST rate reduction on FMCG products led to inventory recalibration by large players, resulting in softer uptake and subdued volumes. Despite these challenges, the company's non-Tier 1 customers in India demonstrated robust growth, partially offsetting the softness from Tier-1 customers.

Strategic Responses to Market Dynamics

In response to the evolving market landscape, Galaxy Surfactants has initiated several strategic measures. The company is actively developing commercial capabilities for petrochemical-based alternate surfactants. This move aims to address the shift in customer preferences driven by elevated fatty alcohol prices and to regain market share lost to competitors focused on petrochemical-based offerings. Approvals for these new products are anticipated in Q3 FY26, with commercialization expected to commence from Q4 FY26. This initiative underscores the company's commitment to diversifying its product portfolio and ensuring resilience in a dynamic market.

Geographically, the Rest-of-World segment, particularly Latin America (LATAM) and Asia Pacific (APAC), demonstrated strong growth, achieving double-digit year-on-year gains across both Performance and Specialty segments. To further capitalize on these high-growth markets and mitigate the impact of challenges in other regions, Galaxy Surfactants is aggressively building project pipelines for its Specialty Ingredients business in LATAM, APAC, and Europe. This strategic redirection of resources aims to sustain growth momentum and partially offset margin pressures experienced in North America due to tariffs and in AMET (Africa, Middle East, Turkey) due to intensified local competition.

Innovation and Outlook

Innovation remains a cornerstone of Galaxy Surfactants' strategy. The company recently launched five new products in the Sun Care range, specifically second-generation sunscreen molecules, at the in-cosmetics event in Bangkok in November 2025. These new launches have received a positive initial response from customers, and the company expects a clearer view on their market take-off in the next quarter. This focus on high-value, specialty products aligns with the company's efforts to fortify its portfolio in the beauty and personal care segments.

Looking ahead, management anticipates Q3 FY26 performance to be similar to Q2, citing continued market volatility and the lingering impact of the festive season. However, there is cautious optimism for India's industry demand growth, which is expected to pick up from Q4 FY26 as inventory adjustments normalize and the market adapts to GST reforms. While the near-term outlook appears muted due to global business challenges and margin pressures, Galaxy Surfactants remains confident in its core fundamentals and long-term consumption story. The company's strategic focus on tactical adjustments, operational agility, and portfolio strengthening is designed to ensure sustained relevance and growth in an evolving market landscape.