/** blogpostTitle: "Ellenbarrie Industrial Gases FY26: Capacity Adds, Cleaner Power, and a Noisy Q4" blogpostSlug: "ellenbarrie-fy26" blogpostCoverImageUrl: null blogpostCoverImageDescription: "An ultra-realistic corporate financial cover image showing a clean executive dashboard on a desk: a line chart of FY24 to FY26 revenue rising from 2,695 to 3,416 (INR million), a bar chart of EBITDA around 1,118 to 1,166, and a separate panel showing capacity expansion from bulk 911 TPD and onsite 698 TPD to projected bulk 1,131 TPD and onsite 1,018 TPD. Include a small icon-style visual of a wind turbine and solar panels to represent the 25-year wind-solar power purchase agreement. Neutral office lighting, modern minimal style, no logos, no readable text labels." blogpostShortTitle: "Ellenbarrie FY26: Capacity ramps and margins" */

Ellenbarrie Industrial Gases FY26: Capacity Adds, Cleaner Power, and a Noisy Q4

Ellenbarrie Industrial Gases Limited ended FY26 with steady operating progress, a stronger profit line, and a balance sheet positioned for the next capex cycle. Revenue from operations for FY26 came in at INR 3,416 million, up from INR 3,125 million in FY25. EBITDA stood at INR 1,166 million with an EBITDA margin of 34%. Profit after tax increased to INR 1,044 million.

Q4 FY26, however, needs to be read with context. Reported EBITDA for the quarter was INR 258 million with an EBITDA margin near 30%. Management highlighted that the quarter included non-recurring items aggregating to INR 46 million. On an adjusted basis (management estimate), EBITDA would have been INR 304 million and the EBITDA margin would have been about 35%.

The period also closed with a visibly liquid balance sheet. As of 31 March 2026, the company reported net debt to equity of 0.03 and cash and equivalents of INR 4,694 million. For a capital-intensive industrial gases business, this combination of low leverage and high liquidity matters because it supports plant execution without forcing short-term funding choices.

Core gases did the heavy lifting

The FY26 narrative was led by the core gases business. The investor presentation shows core gases revenues of INR 3,340 million in FY26 versus INR 2,925 million in FY25, translating into 14.2% year-on-year growth. In Q4 FY26, core gases revenues were INR 860 million.

The gases division also posted meaningful margin expansion at the segment-result level. Segment result margin for gases was 38.4% in FY26, improving by 500 basis points over FY25. In Q4 FY26, the gases segment result margin reached 40.0%.

Management’s commentary framed argon as a key swing factor. The presentation explicitly noted that FY26 margins were impacted by softness in argon prices in H2 FY26. On the call, management added that argon prices were weak in Q3 due to a softer steel environment and oversupply from captive gas plants at steel producers. Prices recovered in Q4 from Q3 lows, although management noted they were still below H1 FY26 levels.

At the company level, Q4 profitability was also affected by one-time items. Management detailed three non-recurring factors: provisioning for employee leave encashment (INR 11 million), impairment on a legacy non-core investment (INR 20 million), and a one-time settlement with an on-site customer (INR 15 million). Importantly, management clarified that the on-site customer remains with the company under a long-term contract and that the settlement related to a start-up date dispute.

Financial summary

Capacity ramp-up is the bridge to the next growth phase

Ellenbarrie repeatedly linked growth to new capacity becoming operational and then ramping up. The most important operational event in Q4 FY26 was the commissioning of the Uluberia 2 merchant plant in West Bengal, a 220 TPD unit. Management stated that a new merchant plant typically takes about 18 months to reach optimal utilization, though Uluberia 2 could ramp relatively better because it is located in an established market with existing customer relationships.

The company also expects another near-term addition on the on-site side. The presentation states that a new on-site plant in East India is expected to be operational next month and that revenues are expected to start in H2 FY27. On the call, management reiterated the expected commissioning timeline and described on-site revenue as more stable due to long-term customer arrangements.

The capacity roadmap in the presentation provides a clear snapshot of where this is headed. Existing capacity is listed as bulk 911 TPD and on-site 698 TPD. For FY27 estimated, the deck indicates bulk capacity of 1,131 TPD and on-site capacity of 1,018 TPD. The facilities schedule also highlights a North India bulk plant of 220 TPD expected in H2 2027 and a Central India bulk facility planned for FY28 (capacity noted as TBD in the deck).

Management also addressed the project engineering vertical. The presentation notes that project engineering (non-core) revenue declined 62% as the division refocused on internal execution for new plant builds. In Q&A, management said it does not expect significant growth from this vertical because the internal project pipeline uses the team’s bandwidth, and internal execution does not generate external billing.

Power strategy: renewables as a cost lever from FY27

Power is structurally one of the largest input costs for air separation. Ellenbarrie’s FY26 materials show a deliberate move toward improving power cost visibility over time.

The company signed a 25-year power purchase agreement with Pattikonda Renewables to source power from a 6 MW wind-solar hybrid plant in Andhra Pradesh. The company is investing INR 70.8 million for a 26% stake. The investor presentation states that the impact on power costs is expected to begin in FY27.

In Q&A, management provided additional color. It noted that plants in West Bengal operate on grid power due to open access constraints. In the southern region, power is a mix of grid power and exchange power, with management indicating that exchange purchases can cover roughly half of demand in some months. It also stated that grid pricing is about 50% to 60% higher than PPA pricing, while exchange power is typically lower than grid.

This is not positioned as an immediate step-change in reported margins. But it is a structural initiative that can matter more as new, more efficient plants come online and as renewable sourcing expands to more locations.

Takeaways

FY26 for Ellenbarrie was a year where core gases performance remained strong, while consolidated margins faced headwinds from argon softness in H2 and some Q4 one-offs. The company ended the year with low leverage and high liquidity, supporting the next capex phase.

FY27 is shaping up to be an execution year. Uluberia 2 is in ramp-up, the East India on-site unit is expected to go live around June 2026 with revenue expected from H2 FY27, and the company has disclosed capex plans of INR 2,500 million in FY27 and INR 2,000 million in FY28. Management’s message across both the deck and the call was consistent: the next leg of growth depends on converting commissioned capacity into utilization, utilization into margins, and margins into cash flows.