PCBL Chemical Q2 FY27 Earnings Call: Trims Volume Growth Guidance To 7%, Reiterates Double-Digit EBITDA Per Tonne Growth

PCBL Chemical Ltd held its Q2 FY27 earnings call on November 02, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Growth Despite Volume Headwinds

• Revenue of Rs.2,474 Cr (+14% YoY), EBITDA Rs.310 Cr (+12% YoY), PAT Rs.74 Cr (+20% YoY) — Q2 FY 2026-2027 consolidated performance driven by pricing discipline and cost optimization despite volume headwinds.
• Carbon black sales volume of 134,180 tons — domestic 92,843 tons, exports 41,337 tons; mix: tire grades 77,914 tons, performance chemicals 39,698 tons, specialty grades 16,568 tons.
• 186 million units of power generated — 108 million units sold externally at Rs.5.34/unit; elevated short-term power tariffs continue to benefit the company.
• Carbon black per-ton EBITDA of ~Rs.19,800/ton — of which ~Rs.2,300/ton was tariff refund, yielding net per-ton EBITDA of ~Rs.17,500/ton (CFO Raj Gupta).
• Rs.33 Cr received as US tariff refund — confirmed by management as 100% of the amount due.
• Margin profile better than guided — Q2 FY 2026-2027 margin, even excluding the tariff reversal impact, came in ahead of guidance.

Deliberate Margin Trade-Off, Tightening Global Supply

• Q2 volume decline was a deliberate margin decision — management let go of spot orders in Southeast Asia (Sri Lanka, Bangladesh, Vietnam, Thailand) and domestic spot business where contribution was not meaningful; it is not chasing volumes and may slightly postpone capex decisions if required.
• Crude rebound distorted the quarter — CFO Raj Gupta noted crude was ~$70/bbl around the Q1 FY 2026-2027 call but rebounded past $100 to $110/bbl; customers cut inventories instead of building them, pressuring Q2 FY 2026-2027 volumes. Only Rs.10-15 Cr of Q1 inventory gains were passed through early in Q2, keeping realizations above the prior quarter.
• Spot price increases announced — MD Nilesh Kaul said they should flow through in November-December (Q3 FY 2026-2027), with further increases expected as higher-cost inventory comes in; the CFO emphasized margin per ton and pass-through over realization levels.
• Coal tar prices firmed in China — raising carbon black production costs, expected to support Southeast Asia prices over the medium-to-long term; Russian refinery throughput at multi-decade lows is shrinking carbon black and CBFS supplies, which management expects to support higher realizations.
• Carbon black imports into India declining — MD Nilesh Kaul attributed this to Russian supplies becoming challenging and rising coal tar prices for Chinese producers; the earlier import wave reflected customers booking cargo when the war began ~6 months ago, landing after ~3 months.
• Feedstock diversification underway — US sourcing continues but is now spread across multiple US vendors; management is evaluating additional Southeast Asian sources (Korea, Malaysia, Thailand) hoped to come through over the next few months of FY 2026-2027, with a possible 1-2% premium on those volumes in FY 2026-2027 (negotiations ongoing).
• Export volumes fell 18% QoQ — a deliberate pullback where contribution was not positive, citing crude, raw material prices and freight costs (no freight pass-through in some cases); management expects a return to international growth as markets stabilize and coal tar-based export prices move up.

Project Alchemy Ramping, Coal Distillation Capex Near Approval

• Rs.53 Cr QoQ decline in OpEx plus employee costs — CFO Raj Gupta said this was mostly volume-linked, with only ~Rs.10-15 Cr from Project Alchemy in Q2 FY 2026-2027, against an analyst-cited cost program targeting Rs.200-250 Cr across OpEx and employee costs.
• Alchemy entering horizontal deployment — MD Nilesh Kaul said initiatives are proven and management stays positive on delivering Rs.200 Cr of savings over coming quarters (period unspecified), with bottom-line realization accelerating in subsequent quarters; management did not specifically commit to significant improvement by Q4 FY 2026-2027 as the analyst asked.
• Savings are largely yield- and throughput-linked — benefits amplify as capacity utilization rises; procurement-linked initiatives expected to show results in Q3 FY 2026-2027 and Q4 FY 2026-2027.
• Coal distillation capex in final approval stage — on the analyst-cited Rs.300 Cr FY27 capex plan, supplier contracts and technology selection are almost finalized, with an announcement expected shortly (timing unspecified).
• Backward integration plan finalized — the required raw material has been confirmed as available to the company.
• Superconductive black facility commissioned — acetylene black progressing on its planned timeline, with project approvals received under the relevant ECMS framework.

New Products Offset Segment Softness

• Q2 FY27 sales volume of 24,253 MT, revenue Rs.433 Cr, EBITDA Rs.42 Cr — home care volume up 7% YoY; water solutions and oil & gas each declined 20% YoY (steady sequentially); application-specific solutions grew 15%.
• Double-digit revenue growth targeted for FY 2026-2027 — CEO Rohit Narang cited pricing discipline and incremental volume from PBTC, GLDA and green chelates not sold in H2 FY 2025-2026 that are now seeing strong demand; management reaffirmed commitment to double-digit growth in H2 FY 2026-2027.
• H2 seasonally weaker, especially Q3 FY 2026-2027 — US oil and gas customers avoid holding inventory for tax reasons, with recovery in Q4 FY 2026-2027 as European contractual business renews; the analyst noted H2 volumes have run 8-10% below H1 over the last two years.
• US oil and gas customers holding back investments — amid geopolitical uncertainty, a headwind the company is still navigating; ACL India and Saudi businesses remain strong.
• Anti-dumping duty on HEDP and ATMP provisionally imposed by the DGTR in India — management is working toward finalization but has not incorporated any impact into its forecast and has no specific numbers yet, while anticipating benefit on the margin side and some of the volume side.
• Innovation pipeline delivering — first commercial order received for synthetic thickeners; customer qualifications advancing for biocides and corrosion inhibitors with key US oil and gas operators; green pivots gaining qualifications in the US and Europe with very strong demand for the PBDC line.
• Saudi Arabia and wider Gulf positioning — targeting the market shift from thermal desalination to SWRO technology, accelerating account approvals and building an RO-focused portfolio; Aquafarm incurred ~Rs.10 Cr of higher power purchase costs in Q2 FY 2026-2027.

Nano Silicon Moves From Lab to Pilot Scale

• 51% JV with Australian technology partner Kinaltech through Nanoverse — developing high-purity nano silicon via a proprietary chemical reduction process; silicon offers 10x graphite's energy storage capacity (3,579 mAh/g vs 372 mAh/g), but managing up to 300% volume expansion remains the critical challenge.
• Palej pilot facility producing samples — undergoing internal qualification ahead of customer evaluation/validation, a transition from lab-scale to pilot-scale manufacturing; development spans Palej, Belgium and Australia, with strategy expanding beyond nano silicon additives to silicon-carbon composite anode solutions.
• Third-party market estimate cited by management — the "global silicon-carbon anode market estimated at ~$1.2 billion in 2025, projected to grow over 25% annually through 2035"; management's stated ambition is to move from supplying individual ingredients to engineering integrated battery solutions.
• Graphite not on the drawing board — the company is internally trialing a carbon silicon compound and exploring other materials to enhance its offer range.

Constructive on H2 FY27, Volume Guidance Under Pressure

• Double-digit growth in average EBITDA per tonne over FY26 levels reiterated for FY 2026-2027 — financial and EBITDA guidance unchanged, with spot-market opportunities to be pursued in Q3-Q4 FY 2026-2027 given competitiveness from Russian supply disruption and Chinese carbon black prices.
• Volume growth guidance of ~7% for FY 2026-2027 now "a little bit challenging" — management corrected the analyst's 11% reference, saying volumes may come in below the initial plan given raw material availability and competitive markets.
• Management remains constructive on a strong H2 FY 2026-2027 — while cautioning that the timing of recovery will depend on market conditions; tire customer inventory built in Q1 FY 2026-2027 moderated in Q2, with those volumes expected to return in Q3 FY 2026-2027.
• US export volume increase expected in FY 2027-2028 — residual risk is tariff volatility: large US customers contracting full-year volumes are hesitant to shift away from local US capacity in case tariffs rise mid-year; mitigation includes holding buffer inventory locally, and a pending India-US trade deal could provide more certainty. Rail car infrastructure (40-50% of US volume moves by rail) is being set up and expected to unlock additional volume.
• Europe outlook cautious — management hopes the Europe market grows ~1-1.5% in FY 2027-2028; the company is expanding infrastructure and expects growth in both specialty and rubber products, with FY 2027-2028 volume negotiations showing positive indications.
• Export growth expected to multiply over FY 2027-2028 — long-term tie-up conversations underway with some of the largest global customers; the push is part of the strategy to keep pressure off Indian market prices amid overcapacity. Analyst context: exports held at ~2.3 lakh tons annually over the past two years; total capacity including Andhra at ~8 lakh tons.
• Specialty carbon black capacity ~75,000 tonnes — Mundra line 6 already commercialized; feedstock availability is the key barrier and the company is tying up more raw material resources; no specific FY 2026-2027 or FY 2027-2028 specialty volume targets were quantified.