RAIN third-quarter EBITDA rises 32% as Carbon offsets Cement loss

RAIN reported third-quarter 2026 Adjusted EBITDA, or earnings before interest, tax, depreciation and amortisation, of Rs 857 crore, up 32% year on year, as Carbon EBITDA rose 38% and Advanced Materials EBITDA rose 42%. Cement recorded an Rs 11 crore Adjusted EBITDA loss after higher energy, raw-material and transportation costs outweighed revenue growth.

What drove RAIN’s third-quarter earnings increase?

RAIN’s consolidated revenue rose Rs 989 crore year on year to Rs 5,424 crore in the third quarter of 2026, while Adjusted EBITDA increased Rs 209 crore to Rs 857 crore. Carbon accounted for Rs 711 crore of the revenue increase and Rs 203 crore of the EBITDA increase, making it the principal contributor to the group’s earnings growth.

Advanced Materials added Rs 245 crore of revenue and Rs 37 crore of Adjusted EBITDA during the third quarter of 2026. Cement added Rs 33 crore of revenue but reduced group EBITDA by Rs 31 crore, reflecting the difference between higher sales volumes and rising operating costs. Currency also aided reported performance, with the US dollar and euro appreciating 9.5% and 7.8%, respectively, against the Indian rupee from the third quarter of 2025.

RAIN’s earnings mix shifted sharply across its three segments in the third quarter of 2026. Carbon produced Rs 3,979 crore of revenue and expanded its margin, while Cement generated Rs 309 crore of revenue but made an Rs 11 crore EBITDA loss. The contrast shows that the group’s Rs 209 crore EBITDA increase came from Carbon and Advanced Materials rather than a broad improvement in every division.

How did Carbon improve RAIN’s margins?

RAIN’s Carbon revenue rose 21.8% year on year to Rs 3,979 crore in the third quarter of 2026, while segment Adjusted EBITDA increased Rs 203 crore, or 38%. The Carbon Adjusted EBITDA margin rose to 18.7% from 16.5%, a 2.2-percentage-point expansion driven by improved realisations in the Calcination and Distillation businesses.

Management said lower-cost inventory held early in the third quarter of 2026 made a positive margin contribution, alongside cost management and favourable currency movements. Calcination volumes were lower because of shipment timing, so Carbon’s Rs 711 crore revenue increase was driven primarily by pricing and realisation gains rather than by higher Calcination volume.

The market setting for Carbon remained disrupted during the quarter. RAIN said shipping through the Strait of Hormuz and Bab al-Mandab had increased during periodic lulls in hostilities, but flows remained below pre-conflict levels. Several Middle East aluminium smelters remained at least partly offline, while idle smelting capacity in the United States and Europe showed signs of ramping up, which management said could support demand for Carbon products.

Commodity prices also remained volatile in the third quarter of 2026, according to management. Crude oil, natural gas, naphtha and fuel oil ended the quarter higher, while benzene ended significantly lower. Carbon’s 18.7% margin was therefore achieved amid volatility in energy and raw-material markets, not through a reported broad decline in input costs.

Why did RAIN’s Cement segment report a loss?

RAIN’s Cement segment recorded an Adjusted EBITDA loss of Rs 11 crore in the third quarter of 2026 because higher raw-material, energy and transportation costs outweighed higher volumes and realisations. Revenue increased 12.0% year on year to Rs 309 crore, but EBITDA declined Rs 31 crore from the comparable quarter of 2025.

The Cement result contrasted with Carbon’s 18.7% Adjusted EBITDA margin and Advanced Materials’ 11.1% margin in the same quarter. Management cited heightened competition in South India after recent acquisitions by pan-India players, adding a market constraint to rising freight and energy costs.

Management said RAIN is focused on cost and pricing discipline and on maintaining volume momentum from the Priya Cement brand relaunch and direct support to end-users. The transcript gave no Cement margin target or timetable for a return to profitability, leaving the recovery dependent on costs, pricing and competition.

What do RAIN’s debt and cash-flow figures show?

RAIN ended the third quarter of 2026 with gross debt of US$102.4 crore, including US$21.7 crore of working-capital borrowings, and net debt of US$85.1 crore. Based on last-twelve-month EBITDA of US$33.7 crore, its net debt-to-EBITDA ratio improved to 2.53 times.

Working capital deployed across RAIN’s three segments rose from US$49.3 crore at the beginning of 2026 to US$58.8 crore at the end of the third quarter. Management attributed the increase primarily to higher inventory, including safety stock built because of supply-chain uncertainty, and said a moderate release had begun in the current quarter.

Operating cash inflow was Rs 149 crore in the third quarter of 2026, as higher profitability more than offset increased working-capital use. Investing cash outflow was Rs 7 crore, consisting mainly of Rs 44 crore of maintenance capital expenditure, partly offset by Rs 36 crore of net maturities and interest income from fixed deposits.

Financing cash outflow was Rs 87 crore, including the prepayment of €3.2 crore of Germany’s Term Loan B during the quarter, alongside interest and lease payments. Management said it expects working-capital release to continue through year-end, subject to market conditions and logistics normalisation, and described maintaining liquidity and balance-sheet flexibility as priorities.

Conclusion

RAIN’s third-quarter 2026 earnings recovery was concentrated in Carbon and, to a lesser extent, Advanced Materials. Consolidated Adjusted EBITDA rose Rs 209 crore to Rs 857 crore as Carbon’s margin increased to 18.7% and Advanced Materials’ margin reached 11.1%, while Cement’s Rs 11 crore loss demonstrated the effect of energy and transportation inflation on the group’s domestic cement business.

The next disclosed financing point is March 2027, when management said prepayment charges on Senior Secured Notes are expected to fall to about 3% and RAIN plans to evaluate refinancing its High Yield Bonds. Investors can also watch whether working capital falls from US$58.8 crore through year-end and whether battery-anode and energy-storage material programmes using LIONCOAT carbon-coating technology advance through customer qualification.