Lords Chloro Alkali Q2 revenue rises 15%, margin falls 464 bps

Lords Chloro Alkali Limited reported Q2 FY27 total income of Rs 115.51 crore, up 14.62% year on year, while earnings before interest, tax, depreciation and amortisation, or EBITDA, margin fell 464 basis points to 16.29%. Higher caustic soda lye and Chlorinated Paraffin Wax volumes lifted sales, but lower caustic soda realisations reduced operating profitability.

Why did Lords Chloro Alkali’s Q2 FY27 revenue increase?

Lords Chloro Alkali’s Q2 FY27 revenue increased because higher sales volumes of caustic soda lye and Chlorinated Paraffin Wax, or CPW, outweighed lower caustic soda realisations. Income from operations rose 17.34% year on year to Rs 115.40 crore from Rs 98.34 crore, while total income rose to Rs 115.51 crore from Rs 100.77 crore. Other income declined to Rs 0.11 crore from Rs 2.43 crore, causing total income to grow more slowly than operating income.

Caustic soda lye sales volume rose 9.24% year on year to 23,309 tonnes in Q2 FY27 from 21,337 tonnes in Q2 FY26. It also increased by 3,356 tonnes from 19,953 tonnes in Q1 FY27. Management said CPW sales volume grew 40.38% year on year and that improved CPW realisations, together with higher sales volumes, supported revenue despite the moderation in caustic soda pricing.

The quarterly comparison shows that total income rose Rs 8.95 crore from Q1 FY27, while EBITDA fell Rs 4.01 crore. Against Q2 FY26, EBITDA declined 10.78% from Rs 21.09 crore to Rs 18.82 crore even as total income increased by Rs 14.74 crore. Management attributed the divergence primarily to lower caustic soda realisations and said the quarter’s cost movements also affected operating profitability.

Why did Lords Chloro Alkali’s EBITDA margin fall in Q2 FY27?

Lords Chloro Alkali’s EBITDA margin fell because total expenditure rose faster than total income while lower caustic soda realisations constrained operating profit. EBITDA was Rs 18.82 crore in Q2 FY27, compared with Rs 21.09 crore a year earlier, and margin declined to 16.29% from 20.93%. The 464-basis-point movement equals 4.64 percentage points, with one basis point equal to one-hundredth of a percentage point.

Total expenditure increased to Rs 96.69 crore in Q2 FY27 from Rs 79.68 crore in Q2 FY26, a rise of Rs 17.01 crore, compared with a Rs 14.74 crore increase in total income. Raw-material cost rose to Rs 36.69 crore from Rs 26.75 crore and employee cost increased to Rs 8.17 crore from Rs 7.03 crore. Inventory changes became an expense of Rs 6.41 crore, compared with a Rs 0.98 crore reduction a year earlier.

Power and fuel charges declined year on year to Rs 37.79 crore from Rs 39.19 crore and fell Rs 5.03 crore from Rs 42.82 crore in Q1 FY27. Management said the sequential reduction in power and fuel expense partly offset the impact of lower caustic soda realisations. However, EBITDA margin was still 5.13 percentage points below Q1 FY27’s 21.42%, as raw-material cost rose by Rs 6.01 crore sequentially and inventory changes moved from a Rs 3.93 crore reduction to a Rs 6.41 crore expense.

How did Lords Chloro Alkali’s profit and first-half performance compare?

Lords Chloro Alkali’s Q2 FY27 profit after tax was broadly unchanged at Rs 9.02 crore, while H1 FY27 profit after tax increased 23.01% to Rs 23.97 crore. Quarterly profit before tax fell 16.63% to Rs 11.78 crore from Rs 14.13 crore, but the tax expense declined to Rs 2.76 crore from Rs 5.09 crore. Basic earnings per share declined 12.26% to Rs 3.15 from Rs 3.59.

For H1 FY27, total income was Rs 222.08 crore, up 10.36% from Rs 201.24 crore in H1 FY26. EBITDA was nearly unchanged at Rs 41.64 crore against Rs 41.78 crore, as total expenditure increased 13.15% to Rs 180.44 crore. Consequently, the H1 EBITDA margin declined 201 basis points to 18.75% from 20.76%.

The half-year profit outcome differed from the quarterly comparison because tax expense fell to Rs 4.09 crore in H1 FY27 from Rs 8.67 crore in H1 FY26. Profit before tax was almost unchanged at Rs 28.06 crore compared with Rs 28.16 crore, while basic earnings per share increased 7.87% to Rs 8.36 from Rs 7.75. Revenue growth in the first half therefore did not produce an increase in EBITDA, but lower tax expense increased reported profit after tax.

What renewable-energy and capacity projects is Lords Chloro Alkali pursuing?

Lords Chloro Alkali commissioned a 14.5-megawatt alternating-current, or 21-megawatt direct-current, captive solar power plant with a Battery Energy Storage System at Bikaner, Rajasthan, during Q2 FY27. Management said this increased total installed captive and group-captive renewable capacity to 47 megawatts direct current. The company said its shift to solar had started reducing power costs from Q4 FY25.

Management is targeting 40% to 45% renewable energy in the short term and 80% in the medium term. Its stated Rs 165 crore capital-expenditure plan for FY26-FY27 includes a further 21-megawatt captive-use plant. On completion, the plan provides for 37 megawatts of captive capacity plus 10 megawatts of group-captive capacity, intended to reduce dependence on grid power and lower energy costs.

The plan also includes a 100-tonnes-per-day capacity addition, taking installed capacity to 360 tonnes per day after decommissioning a 40-tonnes-per-day plant, and 50 tonnes per day of CPW capacity. Lords Chloro Alkali said existing capacity was operating above 80% utilisation. Separately, management cited Rs 30 crore of approved CPW expansion capital expenditure, scheduled for commissioning by the end of FY27, after Rs 150 crore of capital expenditure in FY24 and FY25 increased capacity by about 40%.

Conclusion

Lords Chloro Alkali’s Q2 FY27 results show that higher caustic soda lye and CPW volumes increased total income to Rs 115.51 crore, but price and cost effects reduced EBITDA to Rs 18.82 crore. The resulting 16.29% EBITDA margin was below both the 20.93% reported in Q2 FY26 and the 21.42% recorded in Q1 FY27, while reported quarterly profit after tax remained near the prior-year level at Rs 9.02 crore.

The disclosed items to watch are execution of the Rs 165 crore FY26-FY27 capital plan and commissioning of the Rs 30 crore CPW expansion by the end of FY27. Management’s renewable-energy targets, including 40% to 45% in the short term, and the 47-megawatt direct-current renewable base will be relevant to future power and fuel charges, which were Rs 37.79 crore in Q2 FY27.