Gandhar Oil Q3 Profit Soars 68% on Record Revenue in 2026

Introduction

Gandhar Oil Refinery (India) Ltd announced its financial results for the third quarter ending December 31, 2025, on Friday, January 23, 2026. The company reported a significant 67.9% year-on-year (YoY) increase in its consolidated net profit, which stood at ₹32.4 crore. This growth was primarily driven by its highest-ever quarterly revenue, reflecting sustained domestic demand and a strategic focus on high-margin products. However, the results also highlight ongoing challenges with profitability and margin pressures.

Q3 FY26 Financial Performance

Gandhar Oil's performance in the third quarter of fiscal year 2026 showcased robust top-line growth. Revenue from operations reached a record ₹1,167 crore, a notable increase from ₹1,005.3 crore in the same quarter of the previous year. Sequentially, revenue grew 10.11% from ₹1,059.9 crore in Q2 FY26. This performance underscores the company's ability to expand its market presence amidst a challenging economic environment.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 39.3% YoY to ₹59 crore. The EBITDA margin improved to 5.0% from 4.2% in Q3 FY25, indicating better operational efficiency compared to the previous year. Despite this annual improvement, the operating margin of 5.07% marked a contraction from the 6.21% reported in the preceding quarter (Q2 FY26), suggesting rising input costs or pricing pressures.

Consolidated Nine-Month Performance

For the nine months ended December 31, 2025 (9MFY26), Gandhar Oil's consolidated performance remained strong. The company's manufacturing sales volumes grew by 10% to 4,09,974 KL compared to the same period last year. Consolidated revenues for 9MFY26 reached ₹3,129.9 crore. Profit After Tax (PAT) for this period increased to ₹100.2 crore from ₹71.2 crore a year earlier, while EBITDA rose to ₹170.9 crore.

Segment Contribution and Management Commentary

The revenue breakdown for the first nine months of FY26 highlights the importance of the Personal Care, Health Care and Performance Oil (PHPO) segment, which contributed 50% of the total revenue. This was followed by Lubricants (26.8%), Channel Partners (13.7%), and PIO (9.5%).

Aslesh Parekh, Joint Managing Director, commented on the results, stating, "We delivered a strong performance in Q3 FY26, supported by sustained domestic demand and our strategic focus on high-margin PHPO products. Despite global macroeconomic headwinds and logistical disruptions, we recorded sequential growth across all major financial indicators."

Quarterly Financial Snapshot

Operational Challenges and Profitability Concerns

Despite the positive YoY growth, a closer look at Gandhar Oil's financials reveals underlying concerns. The company's profitability metrics have been volatile. The sequential decline in net profit by 10.15% in Q3 raises questions about the sustainability of its earnings growth. Furthermore, the company's return on equity (ROE) stands at a modest 7.98%, which is below the industry standard for capital-intensive businesses and indicates suboptimal capital efficiency.

Annual data shows a concerning trend. After a peak net profit of ₹213 crore in FY23, earnings declined significantly in subsequent years, with the PAT margin for FY25 standing at just 2.1%. This long-term trend of margin compression remains a key risk factor for investors.

Annual Financial Performance

Market Reaction and Outlook

Following the announcement of the results, the market reacted positively. Shares of Gandhar Oil Refinery ended the trading day at ₹163.15 on the BSE, up by ₹4.00, or 2.51%. This short-term gain contrasts with the stock's longer-term performance, where it has underperformed its sector.

Looking ahead, the outlook for Gandhar Oil is mixed. Positive catalysts include the potential for margin recovery if cost pressures ease and continued revenue momentum driven by strong domestic demand. However, the company must address its deteriorating return ratios and structural challenges related to long-term growth to build sustained investor confidence. Any improvement in return on capital employed (ROCE) and an increase in institutional holdings would be positive signals for the company's future.