NGL Fine-Chem Q2 revenue rises 32%, EBITDA climbs 64% year-on-year

NGL Fine-Chem Limited increased Q2FY27 revenue from operations by 31.97% year on year to Rs 158.71 crore and EBITDA by 63.52% to Rs 28.06 crore, while profit after tax declined 11.68% sequentially to Rs 16.25 crore. EBITDA margin expanded by 341 basis points year on year to 17.68%.

Why did NGL Fine-Chem's Q2FY27 revenue and EBITDA grow?

NGL Fine-Chem's Q2FY27 operating revenue grew on robust demand across product segments and geographies, with growth led by volumes, according to Managing Director Rahul Nachane. Revenue from operations reached Rs 158.71 crore, up Rs 38.45 crore from Rs 120.26 crore in Q2FY26 and Rs 19.55 crore from Rs 139.16 crore in Q1FY27.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by Rs 10.90 crore year on year and Rs 4.77 crore quarter on quarter. The EBITDA margin was 17.68% in Q2FY27, compared with 14.27% in Q2FY26 and 16.73% in Q1FY27. This represented expansion of 341 basis points (bps) year on year and 94 bps sequentially, while operating expenses rose 26.71% year on year, below the 31.97% revenue increase.

Why did NGL Fine-Chem's profit after tax fall from Q1FY27?

NGL Fine-Chem's profit after tax declined sequentially as other income fell to Rs 1.20 crore in Q2FY27 from Rs 7.43 crore in Q1FY27, while depreciation and amortisation increased to Rs 6.55 crore. Total income therefore rose 9.09% quarter on quarter to Rs 159.91 crore, despite a 14.05% increase in revenue from operations.

Profit before tax declined 11.76% from Rs 24.48 crore in Q1FY27 to Rs 21.60 crore in Q2FY27, while profit after tax decreased 11.68% from Rs 18.40 crore to Rs 16.25 crore. Finance cost rose 13.13% sequentially to Rs 1.12 crore. Profit after tax nevertheless exceeded Q2FY26 by Rs 6.62 crore, representing year-on-year growth of 68.74%.

How did capacity expansion affect NGL Fine-Chem's balance sheet and cash flow?

NGL Fine-Chem's H1FY27 balance sheet showed a Rs 121.61 crore increase in net block to Rs 285.70 crore from Rs 164.09 crore at FY26 end. Total assets rose Rs 82.25 crore to Rs 627.75 crore, while inventories increased Rs 48.10 crore to Rs 118.38 crore and trade receivables increased Rs 5.88 crore to Rs 136.76 crore.

Short-term borrowings rose Rs 19.41 crore to Rs 71.43 crore, while long-term borrowings decreased Rs 5.72 crore to Rs 50.68 crore. Cash flow from operating activities was Rs 35.80 crore in H1FY27 and cash flow from investing activities was negative Rs 44.05 crore. These are half-year figures and are not directly comparable with FY26 operating cash flow of Rs 43.32 crore or negative investing cash flow of Rs 70.59 crore. The cash flow statement reported cash at the end of H1FY27 of Rs 5.05 crore, versus Rs 2.81 crore at FY26 end.

What did NGL Fine-Chem's sales mix show in Q2FY27?

NGL Fine-Chem remained predominantly an animal active pharmaceutical ingredient (API) supplier in Q2FY27, with animal API accounting for 95% of revenue. Human API represented 3% and intermediates 1%, unchanged from Q1FY27, while formulations contributed 0%. Animal API's share was 5 percentage points above the 90% recorded in Q2FY26.

NGL Fine-Chem reported lower product and customer concentration than in Q1FY27. Its top three products represented 29% of Q2FY27 sales, down from 31%, while the top 10 products accounted for 65%, down from 68%. The top three customers' share fell from 18% to 11%, and the top 10 customers' share declined from 38% to 26%. Asia represented 41% of sales, India 22%, rest of world 28%, Europe 9% and the United States 0%.

What does NGL Fine-Chem expect from Phase II?

NGL Fine-Chem commissioned Phase II during Q2FY27 on its communicated timeline and said the facility is fully staffed. Management said employee costs, interest and depreciation from the operating plant will begin to flow through the profit and loss statement. It expects these costs to weigh on margins over the next few quarters as utilisation builds, although management expects absolute profits to rise as volumes increase.

Management expects Phase II utilisation to reach 30% to 40% over the next two to three quarters, initially serving unregulated markets. NGL Fine-Chem has started transferring European registrations to the facility and expects the process to finish by the end of 2027. For the United States, it has filed Veterinary Master Files for nine products; management said its customer is expected to complete filings by December 2026, after which a United States Food and Drug Administration inspection could follow.

Conclusion

NGL Fine-Chem's Q2FY27 results combined volume-led revenue growth, a higher EBITDA margin and substantially higher year-on-year profit with lower sequential profit. Revenue growth of 31.97% exceeded the 26.71% increase in operating expenses, supporting EBITDA growth, while lower other income and higher depreciation reduced sequential profit after tax.

The next disclosed milestones are Phase II utilisation against management's 30% to 40% target over the next two to three quarters, customer filings in the United States expected by December 2026, and completion of European registration transfers by the end of 2027.