Sudarshan Chemical Industries (506655) Q2 25/26 earnings summary

Executive summary

• Q2 was weaker than expected amid soft global demand and customer destocking, despite consolidated sales growth of 2.2% year over year and 13% sequentially.

• Heubach integration is progressing, but FY26 EBITDA guidance was reduced to €25–30 million; the three-to-four-year outlook remains unchanged.

• Unaudited standalone and consolidated results for the quarter and half year ended September 30, 2025, were approved; auditor review reported no material misstatements.

Financial highlights

• Q2 FY26 consolidated sales were ₹2,387 crore, adjusted EBITDA ₹116 crore at a 4.9% margin, and PBT ₹82 crore.

• H1 FY26 consolidated sales were ₹4,894 crore, adjusted EBITDA ₹281 crore at a 5.8% margin, and PBT ₹112 crore.

• H1 legacy Sudarshan, including Rieco, sales were ₹1,340 crore versus ₹1,330 crore; legacy pigment revenue was ₹1,229 crore, down 1.6%, with EBITDA of ₹172 crore at a 14% margin.

• H1 Heubach EBITDA was €10.3 million (₹103 crore), at a 3% margin; FY26 EBITDA guidance was revised to €25–30 million from €35 million.

• H1 standalone revenue was ₹1,255.6 crore and net profit ₹102.3 crore; consolidated net profit was ₹59.4 crore versus ₹60.3 crore year over year.

Outlook and guidance

• Q3 Heubach performance is expected near Q2 levels; customer buying and demand are expected to recover from Q4, with January orders anticipated as inventories deplete.

• Legacy domestic performance is expected to be strong in H2; exports are expected to remain subdued in Q3 and improve from Q4.

• The three-to-four-year outlook is unchanged; legacy pigment EBITDA margin is expected to return to 14–15% as operating conditions normalize.

• Mid-term performance outlook remains healthy, supported by customer trust, cost reductions and working-capital improvements.