20 Microns targets ₹8 crore annual EBITDA from 9 MW solar

20 Microns Limited is investing ₹100 crore in specialty-product capacity, captive solar and mineral supply, with a 9 megawatt solar project expected by management to add about ₹8 crore of annual EBITDA. The company had deployed ₹30 crore by H1 FY27 and expects deployment to reach nearly 47% by the end of Q3 FY27.

What will 20 Microns’ ₹100 crore programme fund?

20 Microns is directing its ₹100 crore programme towards specialty and value-added products, captive solar and raw-material security. Management said the capacity expansion includes Malaysian operations and the Sievert joint venture, with applications extending beyond paints into plastics, polymers, rubber and adhesives. Funding is to be phased over 24 months through internal accruals and selective debt.

The programme supports 20 Microns’ stated plan to increase the share of specialty and functional products through FY2030. The company classifies functional additives and nano products as its fastest-growing and highest-value-added tier, alongside performance and specialty minerals and industrial minerals. It does not disclose a product-by-product allocation of the ₹100 crore programme, including the amounts for Malaysian operations or the Sievert joint venture.

Functional additives represented 25% of revenue and comprised more than 250 specialised grades sold to more than 100 customers, compared with fillers’ 75% revenue share, more than 150 grades and more than 800 customers. The company had more than 50 specialty products in its current portfolio and commercialised four breakthrough innovations in FY26 through its Department of Scientific and Industrial Research-recognised research and development centre in Vadodara.

How much of 20 Microns’ capex programme has been deployed?

20 Microns had deployed ₹30 crore, or 30% of the ₹100 crore programme, by its H1 FY27 update and expected deployment to approach 47% by the end of Q3 FY27. The disclosed deployed sum includes ₹12 crore for captive solar and ₹7 crore for two mine acquisitions. Management planned a further ₹17 crore of spending in Q3 FY27, entirely for solar, taking cumulative solar investment to ₹29 crore.

The mine acquisitions add supply security to the expansion programme. For total consideration of ₹7 crore, 20 Microns acquired captive mineral assets in Rajasthan and Andhra Pradesh, covering talc at Anantapur and quartz and feldspar at Bhilwara. Production from the acquired mines is targeted from December 2026, while the Bhilwara transaction included a 99.99% partnership interest in M/s Shree Shrest Minerals and its mining lease.

The company reported 13.5 million tonnes of mining leases across six sites in four states. It said the acquired mine would add captive talc from December 2026 after Uttarakhand talc mining had been paused since January 2025. The presentation also noted that exports of barytes above specified gravity 4 have needed a licence since April 2026, although domestic sales are unaffected.

What is the expected benefit from 20 Microns’ solar project?

20 Microns expects its 9 megawatt captive solar project to meet about 40% of power needs and add about ₹8 crore of annual EBITDA, according to management estimates. The project comprises 5.5 megawatts in Rajasthan and 3.5 megawatts in Gujarat. Commissioning is targeted in Q4 FY27, so the presentation does not state that the full annual benefit will be recognised in FY27.

The planned ₹17 crore Q3 FY27 outlay makes solar the largest specifically quantified near-term element of the spending schedule, lifting cumulative solar investment to ₹29 crore. Management cited lower energy costs and a smaller carbon footprint as the rationale. The company cautioned that capex amounts, timelines and expected benefits are estimates that may change.

The energy project follows a half year in which higher energy and freight costs affected profitability. H1 FY27 EBITDA, or earnings before interest, tax, depreciation and amortisation, was ₹60.13 crore, down 5.5% year on year, while EBITDA margin declined by 85 basis points to 12.5%. Gross margin rose by 79 basis points to 48.3%, which management attributed to a richer product mix and better raw-material use.

Can 20 Microns finance the expansion from its current position?

20 Microns plans to finance the ₹100 crore programme with internal accruals and selective debt, while management cited net debt-to-equity of 0.16 times in H1 FY27. Finance cost fell 11.3% year on year to ₹8.11 crore in H1 FY27 from ₹9.14 crore in H1 FY26. The company described faster customer collections as another factor supporting its funding position.

Revenue from operations rose 1.0% to ₹482.88 crore in H1 FY27, while profit after tax fell 8.3% to ₹31.38 crore. The second quarter returned to growth, with revenue up 3.2% year on year to ₹238.16 crore, after management described Q1 as flat. Management’s H2 FY27 priorities are to recover operating margins through pricing and efficiency and to execute the capex plan on schedule.

Management’s medium-term targets, announced with FY26 results, include 18% revenue compound annual growth over three years, EBITDA-margin expansion of 200 to 250 basis points, return on capital employed of 18% to 20%, and more than 20% market share in high-value products by FY2030. These are management targets rather than reported outcomes. For comparison, FY26 revenue was ₹953.80 crore, EBITDA was ₹123.10 crore, return on capital employed was 16.4%, and net debt-to-equity was 0.13 times.

Conclusion

The ₹100 crore programme combines specialty-product expansion with energy-cost reduction and captive mineral sourcing. Of the ₹30 crore deployed by H1 FY27, disclosed solar and mine-acquisition spending accounted for ₹19 crore. Functional additives already contributed 25% of revenue, while the proposed solar capacity gives management a quantified mechanism to reduce power exposure and target about ₹8 crore of annual EBITDA.

The next disclosed milestones are the ₹17 crore Q3 FY27 solar outlay, nearly 47% programme deployment by the end of Q3 FY27, solar commissioning in Q4 FY27 and mine production from December 2026. Progress on these steps, and on management’s stated H2 FY27 objective of recovering margins through pricing and efficiency, will determine how the plan develops.