Laxmi Organic Industries (LXCHEM) Q2 25/26 earnings summary

Executive summary

• The company faced a challenging global chemical industry environment in Q2 FY26, with overcapacity, cost optimization, and subdued spreads impacting profitability, especially in the Specialties segment.

• Specialty business (ketene and diketene) has grown at 18%-20% CAGR since 2017, now holding 8%-9% market share in diketene derivatives.

• Production of Acetaldehyde commenced at the Dahej facility, with Phase I operational and Phase II underway; major contracts signed, including with Hitachi Energy for SF6 replacement gas.

• Board approved unaudited financial results for Q2 and H1 FY26, re-appointed an Independent Director, and reallocated QIP funds to the Dahej Project, targeting completion by June 30, 2026.

• Cash flow from operations in H1 FY26 was strong at INR 1,528 million, a significant improvement from H1 FY25.

Financial highlights

• Consolidated revenue for Q2 FY26 was INR 6,997 million, down 9% year-over-year; H1 FY26 revenue was INR 13,927 million, down 6%.

• Adjusted EBITDA for Q2 FY26 fell 47% to INR 394 million; EBITDA margin dropped to 5.3%-5.6% from 9.7% last year.

• PAT for Q2 FY26 declined to INR 110 million, down 61% year-over-year; H1 FY26 PAT was INR 324 million, down 48%.

• Gross margin for Q2 FY26 was 33.1%, up from 30.8% in Q1 but down from 35.8% last year.

• Cash flow from operations robust at INR 1,509 million in H1 FY26.

Outlook and guidance

• Deferred specialty deliveries are expected to materialize in H2 FY26.

• No change to FY2026 fluorochemical revenue outlook (targeting INR 80 crore); Dahej Phase II completion and operationalization is a key priority.

• Specialty margins expected to recover as new Dahej capacity ramps up and alternative products replace phased-out intermediates.

• CapEx cycle and borrowings to increase in H2, with term loans in the INR 400-500 crore range.