Dai-ichi Karkaria Q2 revenue rose 26%, loss hits Rs 35 lakh

Dai-ichi Karkaria Limited reported 26% year-on-year revenue growth to Rs 54.11 crore in the quarter ended 30 September 2026, but recorded a Rs 35 lakh loss. Management attributed the margin pressure to higher crude-linked feedstock and export freight costs, while material costs reached Rs 38.11 crore and the operating margin fell to 2%.

How much did Dai-ichi Karkaria’s Q2 revenue grow?

Dai-ichi Karkaria’s Q2 FY26-27 revenue rose by approximately 26% year on year to Rs 54.11 crore, from Rs 42.79 crore in the quarter ended 30 September 2025. The company said growth was broad based across its business segments, while its largest business, Oilfield Chemicals, benefited from steady international demand and the commercialisation of new products.

The quarterly result was lower sequentially: revenue declined by Rs 3.73 crore from Rs 57.84 crore in the quarter ended 30 June 2026. For the half year ended 30 September 2026, however, revenue increased approximately 36% to Rs 111.95 crore from Rs 82.24 crore a year earlier, showing that the first-quarter sales level remained important to first-half growth.

Home & Personal Care was a notable contributor in Q2, with revenue nearly three times that of the corresponding prior-year quarter, according to management. The company attributed that increase to sustained export demand, while Paints & Coatings and Textiles recovered from the first quarter and Agrochemicals followed its usual seasonal pattern after a strong first quarter.

Why did Dai-ichi Karkaria report a Q2 loss despite higher sales?

Dai-ichi Karkaria reported a Rs 35 lakh loss for Q2 FY26-27 because cost increases reduced operating earnings to Rs 97 lakh, even as revenue rose to Rs 54.11 crore. Operating earnings before interest, tax, depreciation and amortisation, or EBITDA, were Rs 1.79 crore in Q2 FY25-26 and Rs 5.99 crore in the preceding quarter, while the Q2 FY26-27 EBITDA margin was 2%.

Cost of material consumed and changes in inventory reached Rs 38.11 crore in Q2, compared with Rs 28.10 crore a year earlier and Rs 37.31 crore in the preceding quarter. Management said renewed Middle East geopolitical tensions pushed crude oil prices higher during the quarter, increasing costs for petrochemical feedstocks including ethylene oxide, a key input for its operations.

Other expenses increased to Rs 8.01 crore from Rs 6.42 crore in Q2 FY25-26 and Rs 7.40 crore in Q1 FY26-27. The company linked the increase to disruption in regional shipping routes, reduced vessel capacity and port congestion, which it said significantly raised ocean freight rates on export shipments.

How did costs affect Dai-ichi Karkaria’s operating and net margins?

Dai-ichi Karkaria’s operating margin fell to 2% in Q2 FY26-27 from 4% in Q2 FY25-26 and 10% in Q1 FY26-27, reflecting the mismatch between revenue growth and the rise in materials and freight-related costs. Employee benefits expenses were Rs 7.02 crore, slightly below Rs 7.14 crore in the preceding quarter but above Rs 6.48 crore a year earlier.

Depreciation and amortisation was Rs 2.69 crore in Q2 FY26-27, versus Rs 2.67 crore in Q1 and Rs 2.55 crore a year earlier. Combined with finance costs of Rs 37 lakh, compared with Rs 33 lakh in Q1 and Rs 24 lakh a year earlier, this produced a loss before exceptional items and tax of Rs 74 lakh, against profit before tax of Rs 64 lakh in Q2 FY25-26.

The reported net loss was marginally wider than the Rs 34 lakh loss in the corresponding quarter, and followed net profit of Rs 6.09 crore in Q1 FY26-27. Deferred tax was a Rs 46 lakh credit in Q2, while current tax was Rs 11 lakh and an adjustment of earlier years was a Rs 4 lakh credit; after these items, the net profit margin after tax was negative 1%.

What does Dai-ichi Karkaria’s first-half performance show?

Dai-ichi Karkaria remained profitable for the first half despite the Q2 loss, reporting profit after tax of Rs 5.74 crore for the six months ended 30 September 2026, compared with Rs 1.85 crore a year earlier. First-half operating earnings were Rs 6.96 crore, more than double Rs 3.07 crore in the corresponding period, and the EBITDA margin increased to 6% from 4%.

First-half material costs rose to Rs 75.42 crore from Rs 53.26 crore as revenue expanded to Rs 111.95 crore from Rs 82.24 crore. Other expenses also rose to Rs 15.41 crore from Rs 12.94 crore, while employee benefits expenses increased to Rs 14.16 crore from Rs 12.97 crore, indicating that the improved half-year profit was earned before the full impact of the second-quarter margin squeeze.

Earnings before interest and tax, or EBIT, for the first half was Rs 8.46 crore, compared with Rs 3.13 crore in the previous first half, and the EBIT margin was 8% against 4%. That period comparison differs sharply from Q2 alone, where EBIT turned into a Rs 37 lakh loss after a Rs 88 lakh profit in Q2 FY25-26.

What is Dai-ichi Karkaria doing to manage production and cost pressure?

Dai-ichi Karkaria said its Dahej facility achieved record ethoxylation production during Q2 FY26-27, and the capacity expansion commissioned in Q1 is now being utilised. The company did not disclose the added capacity or output volume, but the update connects the Q1 project commissioning with production during the quarter in which revenue reached Rs 54.11 crore.

Management said it is working with customers on pricing and optimising sourcing and logistics to manage higher feedstock and ocean-freight costs. Its operational response follows Q2 material costs of Rs 38.11 crore and other expenses of Rs 8.01 crore, while it also reported progress on its Responsible Care safety and sustainability programme.

The company said it intends to build on first-half momentum, deepen customer relationships across segments and pursue sustainable, profitable growth. That stated focus comes after a half-year profit of Rs 5.74 crore, but the presentation does not provide a numerical margin target, pricing timetable or forecast for freight and petrochemical input costs.

Conclusion

Dai-ichi Karkaria combined a 26% rise in Q2 revenue with a Rs 35 lakh loss because higher crude-linked feedstock costs and freight charges compressed EBITDA to Rs 97 lakh and the operating margin to 2%. The first half remained profitable, with revenue of Rs 111.95 crore and profit after tax of Rs 5.74 crore, supported by the stronger first quarter.

Next, readers should watch whether customer pricing discussions, sourcing and logistics optimisation offset the cost pressure identified in Q2. Management also said the Dahej expansion commissioned in Q1 is now being utilised after record ethoxylation production in Q2, but it gave no specific capacity, margin or freight-cost target.