Gandhar Oil Refinery Navigates Dynamic Markets with Strong Q3 FY26 Performance

Gandhar Oil Refinery India Limited, a prominent player in the specialty oils sector, has reported a robust financial performance for the third quarter and nine months ended December 31, 2025. Despite a challenging macroeconomic environment marked by pricing volatility and logistical disruptions, the company demonstrated resilience and strategic acumen, achieving healthy year-on-year and sequential growth in its consolidated revenue.

For Q3 FY26, Gandhar Oil recorded a consolidated revenue of INR 1,167 crores, reflecting a significant 16% year-on-year improvement compared to Q3 FY25 and a 10% quarter-on-quarter growth over Q2 FY26. The nine-month period saw consolidated revenue reach INR 3,130 crores, driven by steady volumes and consistent demand across its diverse markets. EBITDA for Q3 FY26 stood at INR 59 crores, a moderation from Q2 FY26 but significantly higher year-on-year. The nine-month EBITDA reached INR 171 crores, underscoring operational resilience. Profit After Tax (PAT) for Q3 FY26 was INR 34 crores, contributing to a nine-month PAT of INR 100 crores, a strong improvement over the previous year.

Segmental Performance and Global Footprint

Gandhar Oil's revenue mix remains well-diversified, with its Personal Care, Healthcare, and Performance Oils (PHPO) division being the largest contributor. For the nine months of FY26, PHPO accounted for 50% of the consolidated revenue from finished goods sold. Lubricants contributed 26.8%, and Process Oils (PIO) made up 9.5%. The company also leverages channel partners, who contributed 13.7% of the consolidated revenue by selling products to end-users.

This diversification is complemented by a strong international presence, with overseas sales contributing approximately 45% of the consolidated revenue during the nine-month period. Gandhar Oil operates in over 100 countries across six continents, highlighting its extensive global footprint. The company's manufacturing facilities are strategically located in Taloja (Maharashtra), Silvassa (Dadra and Nagar Haveli) in India, and Sharjah (UAE), with a total capacity of 597,403 kL. The R&D facility in Silvassa, registered with DSIR, supports specialized product development and quality testing.

Strategic Initiatives and Risk Management

Gandhar Oil is actively pursuing several strategic initiatives to fuel future growth. The company is focused on strengthening its customer base by increasing its share of business with existing clients and acquiring new ones, particularly in the high-growth consumer and healthcare end-industries. It is also expanding its product portfolio and leveraging existing customer relationships to penetrate new geographies like Indonesia, Europe, and the United States, building on the success of its Texol plant in UAE.

To support its long-term expansion strategy, the Board of Directors recently approved the purchase of a land parcel admeasuring 453.55 decimals adjacent to its existing factory locations at Silvassa and Taloja. This acquisition is a crucial step for future capacity additions, with new capex expected by the end of FY26 or FY27. The company is also investing in new product development, with several specific formulations currently undergoing R&D trials with multinational customers.

Gandhar Oil employs a prudent risk management framework to navigate market volatilities. This includes adopting price pass-through contracts for certain clients, maintaining just-in-time inventory to reduce commodity price fluctuations, and incorporating index-linked pricing in supplier arrangements. Foreign exchange risk is managed through hedging policies, forward contracts, and natural hedges from overseas sales.

Outlook and Management Commentary

Management expressed optimism about future performance, anticipating continued growth in EBITDA margins. The global white oil market is projected to grow at a CAGR of approximately 3% from 2025 to 2034, reaching an estimated $4.66 billion. The PHPO and cosmetic industries are expected to grow at high single digits, both domestically and internationally. The company aims to increase its volumes quarter-on-quarter over the next 1.5 to 2 years, even without the new land, and expects export growth of 5-10% in the short to medium term, potentially reaching 50-55% of total revenues.

While acknowledging the contraction in gross margin spread and challenges in certain segments like transformer oil's debtor collection, management highlighted proactive measures such as freight rate pass-through to customers and a focus on FOB shipments. The company's commitment to transparent disclosures and consistent communication, including quarterly conference calls, reinforces investor confidence. The declaration of an interim dividend of INR 0.75 per equity share further demonstrates a shareholder-friendly approach.