Tega Industries: Strong Q2 and H1 FY26 Performance Driven by Operational Efficiency and Strategic Expansion

Tega Industries Limited has reported a robust financial performance for the second quarter and first half of the fiscal year 2026, showcasing significant growth in revenue and profitability. The company's consolidated revenue for Q2 FY26 reached INR421.1 crore, marking a 15% year-on-year increase. For the first half (H1 FY26), the consolidated revenue stood at INR792.7 crore, reflecting a 10% year-on-year growth. This impressive performance was underpinned by strong demand and efficient operational execution across its business segments.

Profitability also saw a substantial uplift, with EBITDA for Q2 FY26 soaring to INR84.9 crore, a remarkable 78% increase compared to the previous year. The EBITDA for H1 FY26 was INR156.1 crore, up 26% year-on-year. The company successfully maintained healthy EBITDA margins of approximately 20%, demonstrating its continued focus on operational efficiency despite various market challenges. Profit After Tax (PAT) for Q2 FY26 surged by 523% to INR44.9 crore, and for H1 FY26, it increased by 83% to INR80.3 crore, highlighting strong bottom-line growth.

Segmental Performance and Growth Drivers

The company's growth was primarily driven by its two core business segments: consumables and equipment. In Q2 FY26, the consumables business segment reported revenues of INR338.9 crore, contributing 83% to the total revenue from operations. This segment saw a marginal increase of 10% compared to the same period last year, indicating steady demand for its products.

The equipment business segment demonstrated exceptional growth, with revenues reaching INR70.7 crore in Q2 FY26, a significant 55% increase year-on-year. This segment's robust performance exceeded management's initial guidance of 25% growth for FY26, underscoring strong execution and a healthy order book. The improved EBITDA margin for the equipment business, rising from approximately 5% last year to 14% this quarter, further highlights the success of process improvements and the execution of high-margin orders.

Financial Summary (INR Crore)

Strategic Initiatives and Future Outlook

Tega Industries is actively pursuing strategic initiatives to sustain its growth trajectory and enhance its global footprint. A key development is the ongoing Molycop acquisition, which is progressing through regulatory approvals. The company anticipates the transaction to close between December 2025 and January 2026, with the first consolidation expected in Q4 FY26. This acquisition is poised to generate significant revenue synergies and cross-sell benefits, further strengthening Tega's market position.

To mitigate risks associated with tariffs and supply chain disruptions, particularly in the U.S. market, Tega Industries is advancing its Chile capex project. This project, with an estimated investment of $30 million to$35 million, is on track for commercial production by Q2 FY27, establishing alternate manufacturing capabilities. Additionally, the company is undertaking a debottlenecking project at Dahej to optimize production and efficiency.

Management remains confident in achieving its FY26 earnings guidance, supported by a robust order book of INR1155.6 crore as of September 30, 2025, with INR730.6 crore scheduled for execution within the next 12 months. This provides strong visibility into near-term revenues. The company expects its consumables business to grow by approximately 15% and the equipment business to grow by 25% and above for FY26. Furthermore, the McNally equipment business is projected to reach an INR1000 crore run rate within the next 3 to 4 years.

Navigating Global Challenges with Resilience

Tega Industries acknowledges the prevailing global macroeconomic headwinds, political developments, and supply chain disruptions. However, its diversified portfolio, resilient balance sheet, and customer-first approach enable it to navigate these challenges effectively. The company has implemented proactive measures, such as advanced placement of raw material orders, developing alternate vendors, and optimizing shipping routes, to ensure supply chain stability. The strategic establishment of alternate manufacturing in Chile also serves as a crucial derisking plan against U.S. tariffs.

In conclusion, Tega Industries Limited has demonstrated strong financial and operational performance in Q2 and H1 FY26. Its strategic initiatives, including the Molycop acquisition and key capex projects, are well-positioned to drive future growth. With a proactive approach to risk management and a clear focus on operational efficiency, the company is set to continue its trajectory of sustainable growth and value creation for its stakeholders.