28-Oct-2026 15:32:48
GANDHAR OIL REFINERY Q2 CONCALL: RECORD REVENUE UP 73% YOY, EBITDA SURGES 337%, PAT JUMPS 368%, GROSS SPREADS HIT EXCEPTIONAL LEVELS & CAPACITY EXPANSION SUPPORTS GROWTH
• MANAGEMENT REMAINS OPTIMISTIC ABOUT SUSTAINING ELEVATED GROSS SPREADS DURING Q3–Q4 FY27, SUPPORTED BY BASE OIL SUPPLY CONSTRAINTS, DISCIPLINED SOURCING, STRONG PRICING & HEALTHY DOMESTIC DEMAND • MANAGEMENT CONTINUES TO WORK TOWARD EARLIER FY27 VOLUME GROWTH GUIDANCE OF 8–11%, ALTHOUGH WEST ASIA GEOPOLITICAL DISRUPTIONS & WEAKER UAE EXPORT VOLUMES REMAIN KEY UNCERTAINTIES • MANAGEMENT EXPECTS STRONG PROCESS & INSULATING OILS DEMAND TO CONTINUE, DRIVEN BY TRANSFORMERS, POWER INFRASTRUCTURE, RUBBER INDUSTRIES & DATA-CENTER INVESTMENTS • MANAGEMENT EXPECTS IMPROVED CAPACITY UTILISATION DURING Q3–Q4, SUPPORTED BY RECENT DEBOTTLENECKING, CAPACITY EXPANSION & HIGHER DOMESTIC PRODUCTION • MANAGEMENT EXPECTS TEXOL UAE EXPORT VOLUME RECOVERY AS WEST ASIA SHIPPING & RAW MATERIAL SUPPLY DISRUPTIONS EASE, WHILE HIGHER FREIGHT & INSURANCE COSTS ARE BEING PASSED ON TO CUSTOMERS • MANAGEMENT EXPECTS LONG-TERM GROSS SPREADS TO MODERATE FROM CURRENT EXCEPTIONAL LEVELS AS SUPPLY CONDITIONS NORMALISE, BUT BELIEVES THEY COULD REMAIN ABOVE HISTORICAL ₹8,000–9,000/KL LEVELS • Q2 REVENUE SURGED 73% YOY TO A RECORD ₹1,847 CR, WHILE EBITDA JUMPED 337% TO ₹288 CR & NET PROFIT INCREASED 368% TO ₹186 CR • Q2 EBITDA MARGIN EXPANDED SHARPLY TO 15.6% VS 6.2% LAST YEAR, WHILE GROSS PROFIT REACHED ₹388 CR WITH GROSS MARGIN AT 21% • Q2 GROSS SPREAD REACHED ₹29,128/KL, SUPPORTED BY ELEVATED SELLING PRICES, TIGHT BASE OIL SUPPLY & EFFICIENT PROCUREMENT • CURRENT SELLING REALISATIONS INCREASED TO APPROXIMATELY ₹1.35 LAKH/KL VS ₹80,000/KL AT FY26-END, REFLECTING SIGNIFICANT PRICING IMPROVEMENT • H1 REVENUE SURGED 82% YOY TO ₹3,579 CR, WHILE EBITDA REACHED ₹569 CR & NET PROFIT STOOD AT ₹392 CR • H1 FY27 NET PROFIT WAS APPROXIMATELY 2.9 TIMES THE ENTIRE FY26 PROFIT, REFLECTING EXCEPTIONALLY STRONG MARGIN EXPANSION & EARNINGS GROWTH • PROCESS & INSULATING OILS VOLUMES GREW 23% YOY IN H1, SUPPORTED BY STRONG DEMAND FROM POWER TRANSMISSION, TRANSFORMERS, INDUSTRIAL APPLICATIONS & DATA CENTERS • PERSONAL CARE, HEALTHCARE & PERFORMANCE OILS VOLUMES REMAINED BROADLY FLAT IN H1, WITH WEAKER PERSONAL CARE DEMAND OFFSET BY STABLE HEALTHCARE & PHARMACEUTICAL REQUIREMENTS • LUBRICANT VOLUMES REMAINED BROADLY STABLE YOY BUT INCREASED APPROXIMATELY 9% QOQ, WHILE STANDALONE BUSINESS VOLUMES GREW AROUND 16% YOY IN H1 • TOTAL INSTALLED CAPACITY REACHED APPROXIMATELY 8.39 LAKH KL, INCLUDING 6.02 LAKH KL IN INDIA & 2.36 LAKH KL AT TEXOL UAE, FOLLOWING APPROXIMATELY 2.40 LAKH KL OF CAPACITY ENHANCEMENTS • INDIA CAPACITY UTILISATION STOOD AT APPROXIMATELY 82%, WHILE CONSOLIDATED UTILISATION WAS AROUND 61%, PROVIDING ADDITIONAL HEADROOM FOR VOLUME GROWTH • OVERSEAS REVENUE INCLUDING TEXOL REACHED ₹1,721 CR IN H1, CONTRIBUTING APPROXIMATELY 48% OF CONSOLIDATED REVENUE, DESPITE EXPORT VOLUME DISRUPTIONS • WEST ASIA CONFLICT & STRAIT OF HORMUZ DISRUPTIONS AFFECTED UAE RAW MATERIAL AVAILABILITY & EXPORT VOLUMES, WHILE SOUTH KOREAN SOURCING REMAINED STABLE & LIMITED GULF SUPPLIES RESUMED • STANDALONE BUSINESS REMAINED DEBT-FREE, WHILE CONSOLIDATED BORROWINGS DECLINED TO ₹85 CR VS ₹168 CR IN MARCH 2026, WITH CASH BALANCES OF APPROXIMATELY ₹135 CR • CONSOLIDATED H1 OPERATING CASH FLOW STOOD AT APPROXIMATELY ₹180 CR, WHILE RECEIVABLE DAYS INCREASED TO AROUND 70 VS 67 EARLIER • SILVASSA UNIT 2 FLOODING RESULTED IN AN EXCEPTIONAL LOSS OF APPROXIMATELY ₹21 CR, WITH OPERATIONS RESUMED IN AUGUST & INSURANCE RECOVERY CLAIM SUBMITTED • MANAGEMENT EXPECTS QUARTERLY DEPRECIATION OF APPROXIMATELY ₹10–10.5 CR & SLIGHTLY LOWER INTEREST COSTS OVER THE NEXT TWO QUARTERS, WHILE FUTURE CAPEX IS EXPECTED TO BE FUNDED PRIMARILY THROUGH INTERNAL ACCRUALS • MANAGEMENT REMAINS POSITIVE ON STRONG GROSS SPREADS, PIO DEMAND, DOMESTIC CAPACITY UTILISATION, HEALTHY CASH FLOW & LOW DEBT, BUT MARGIN NORMALISATION, WEST ASIA DISRUPTIONS, TEXOL EXPORT WEAKNESS & UNCERTAIN VOLUME RECOVERY REMAIN KEY RISKS
GANDHAR OIL REFINE IND L