Laxmi Organic Industries (LXCHEM) Q3 25/26 earnings summary

Executive summary

• Q3 and 9M FY2026 saw continued challenges in the global chemical industry, with cost optimization, asset shutdowns, and supply chain restructuring prevalent worldwide.

• Demand from key customer industries like packaging, inks, adhesives, and pharmaceuticals remained stable, while agrochemicals were moderate and paints/coatings weak to moderate.

• The company maintained market share but faced financial pressure due to market price moderation, absence of a one-time campaign product, and phase-out of an agrochemical intermediate.

• The company focused on productivity, commercial excellence, execution, cost discipline, and growth projects.

• Unaudited standalone and consolidated financial results for Q3 and nine months ended December 31, 2025, were approved and reviewed by the Board and auditors.

Financial highlights

• Q3 revenue declined by nearly 9% year-over-year to INR 7,187 Mn; EBITDA fell 33% to INR 499 Mn; PAT was INR 254 Mn, down from INR 293 Mn.

• Adjusted EBITDA for the quarter was INR 140 Mn.

• One-time gain of INR 407 Mn from a favorable Supreme Court order on wheeling and transmission charges, offset by INR 38 Mn labor court provision and INR 9 Mn supply chain redesign costs.

• Employee costs rose to INR 460 Mn due to headcount increases and annual increments.

• Standalone Q3 FY26 profit after tax: INR 198.31 Mn; consolidated: INR 255.99 Mn.

Outlook and guidance

• Acetic acid prices, a key feedstock, have rebounded from unsustainable lows and are expected to stabilize between $330-$380/MT, supporting improved ethyl acetate spreads.

• Specialty segment margins are expected to gradually recover as new products ramp up and Dahej phase two comes online, with full ramp-up targeted for FY2028.

• Essential segment growth will be driven by new capacity additions, with domestic demand remaining robust.

• The Dahej facility project remains on track, with Phase 2 completion targeted by end of Q4.

• Deferred tax liabilities re-measured due to adoption of new tax rate (25.17%) under section 115BBA, with a reversal of INR 97.18 Mn.