Shanti Inorganics’ FY26 profit rose despite 114% SO2 price rise

Shanti Inorganics Limited increased profit after tax by 27.85% to Rs 10.22 crore in FY26 despite sulphur dioxide, or SO2, rising 113.71% to Rs 22.97 per kg. Higher sales quantity, a Rs 0.53-per-kg increase in finished-product prices, and lower administrative, selling and finance costs offset the input-price increase.

How did Shanti Inorganics’ FY26 profit rise despite the SO2 price rise?

Shanti Inorganics’ FY26 profit rose because total income increased faster than total expenses. Total income rose 24.76% to Rs 72.93 crore in the year ended March 31, 2026, while total expenses increased 23.95% to Rs 59.11 crore. Profit before tax increased to Rs 13.83 crore from Rs 10.77 crore in FY25, and profit after tax increased from Rs 7.99 crore to Rs 10.22 crore.

Profit after tax, or PAT, is profit remaining after tax expense. Shanti Inorganics’ PAT margin, measured as PAT divided by total income, increased to 14.01% in FY26 from 13.67% in FY25, even as tax expense rose to Rs 3.61 crore from Rs 2.78 crore and purchases of stock-in-trade reached Rs 7.04 crore from nil.

What happened to Shanti Inorganics’ SO2 and material costs in FY26?

SO2 recorded the largest disclosed average-price increase among Shanti Inorganics’ principal raw materials in FY26. Shanti Inorganics purchased 57,55,500 kg of SO2, 21.59% less than 73,40,400 kg in FY25, but the average price rose to Rs 22.97 per kg from Rs 10.75 per kg. Consequently, SO2 spending rose 67.53% to Rs 13.22 crore from Rs 7.89 crore.

The total materials outcome also reflected changes in the wider input mix. Caustic lye purchase quantity rose 77.26% to 9,58,831 kg, with spending increasing to Rs 3.77 crore from Rs 2.09 crore. In contrast, caustic soda flakes quantity declined 80.32% to 1,20,000 kg, while soda ash spending fell 16.42% to Rs 4.44 crore as its average price declined 12.02% to Rs 25.38 per kg.

Cost of materials consumed increased 18.74% to Rs 28.29 crore in FY26 from Rs 23.83 crore in FY25. However, that cost fell to 38.79% of total income from 40.76%, showing that the increase in income exceeded the rise in materials consumed. This relationship depended on the product mix, sales revenue and prices paid across the raw-material basket, rather than on the SO2 price alone.

Did sales volumes and selling prices offset the input increase?

Shanti Inorganics increased disclosed sales quantity by 35.83% to about 23,135.77 metric tonnes per annum, or MTPA, in FY26 from about 18,815.00 MTPA in FY25. Revenue from operations increased 24.72% to Rs 71.22 crore from Rs 57.11 crore, while freight recovered on sales rose to Rs 24.03 lakh from Rs 16.20 lakh. Revenue from operations accounted for 97.65% of FY26 total income.

Average selling price of finished products increased 1.77% to Rs 30.49 per kg in FY26 from Rs 29.96 per kg in FY25. The selling-price increase was much smaller than the 113.71% increase in SO2’s purchase price, indicating that volume growth, the lower materials-to-income ratio and lower costs outside materials contributed to the margin change.

FY26 followed an earlier growth year for Shanti Inorganics. Sales quantity increased 18.21% to about 18,815.00 MTPA in FY25 from about 15,916.80 metric tonnes in FY24, while average selling price rose 7.06% to Rs 29.96 per kg from Rs 27.98 per kg. Shanti Inorganics attributed FY26 profitability partly to phase I of its Bavla Unit operating for all 12 months, after commencing production in FY25.

Which expenses improved Shanti Inorganics’ FY26 earnings outcome?

Administrative, selling and other expenses declined 10.74% to Rs 13.35 crore in FY26 from Rs 14.96 crore in FY25. The category fell to 18.31% of total income from 25.59%, led by export freight, clearing, forwarding and other expenses declining to Rs 7.80 crore from Rs 9.96 crore. Rent, rates and taxes also declined to Rs 18.84 lakh from Rs 23.24 lakh.

Finance costs declined 25.71% to Rs 1.37 crore in FY26 from Rs 1.84 crore in FY25. Shanti Inorganics attributed the change to lower working-capital utilisation and repayment of unsecured business loans from banks and non-banking financial companies, or NBFCs. Interest on working-capital and term loans declined to Rs 97.04 lakh from Rs 1.13 crore, while interest on business loans fell to Rs 19.15 lakh from Rs 34.05 lakh.

The savings occurred alongside higher operating costs. Employee-benefit expense increased 37.97% to Rs 3.43 crore as operations at phase I of the Bavla Unit increased, while manufacturing expense rose 23.70% to Rs 5.80 crore. Depreciation and amortisation increased 140.64% to Rs 1.91 crore after additions of plant, machinery, factory building and other assets totalling Rs 4.72 crore in FY26.

What conditions could affect Shanti Inorganics’ future profitability?

Shanti Inorganics’ asset base and borrowing position make capacity utilisation and financing relevant to future earnings. Total assets rose to Rs 97.04 crore at March 31, 2026 from Rs 66.04 crore a year earlier, including property, plant and equipment of Rs 39.97 crore. At May 31, 2026, total borrowings were Rs 34.85 crore and total equity was Rs 50.74 crore, producing a total-borrowings-to-equity ratio of 0.69.

Shanti Inorganics identifies raw-material supply and costs, customer dependence, installed-capacity utilisation, competition, currency movements and execution of its growth expansion plan as factors affecting results. Short-term borrowings increased to Rs 14.97 crore at May 31, 2026 from Rs 9.74 crore at March 31, 2026, while long-term borrowings declined to Rs 19.87 crore from Rs 20.93 crore. The FY26 result therefore depends in part on continued volume generation, input-cost management and working-capital use.

Conclusion

Shanti Inorganics converted a 24.72% increase in revenue from operations and a 35.83% increase in sales quantity into a 27.85% increase in FY26 PAT. Material costs increased 18.74%, below the 24.76% increase in total income, while administrative, selling and other expenses and finance costs both declined.

The next results will show whether full-year operations at phase I of the Bavla Unit can sustain sales quantity and whether SO2 and other input costs can be absorbed within the product mix. Shanti Inorganics has identified growth expansion execution and optimum capacity utilisation as factors affecting results, while its Rs 34.85 crore borrowings at May 31, 2026 leave working-capital utilisation and debt costs relevant to subsequent margins.