Apcotex Industries Q2 FY27 Performance Update

Revenue at Rs 499 crore (+48% YoY); Profit at Rs 35 crore (+38% YoY).

Reader Takeaway: Robust volume growth and strategic capacity expansion drive revenue, though inventory losses impact short-term operating margins.

What just happened

Apcotex Industries reported strong growth for the second quarter of FY27, with operating revenues reaching Rs 499 crore, a 48% increase over the previous year. This performance was supported by a 7% rise in sales volumes. The company reported an operating EBITDA of Rs 58 crore, reflecting a 44% YoY growth, while profit after tax (PAT) climbed 38% to Rs 35 crore.

Why this matters

The company is in the midst of a significant Rs 220 crore capital expenditure program at its Valia facility. The progress of this expansion is crucial for long-term growth. While margins saw a slight dip to 11.69% compared to 12.06% last year due to inventory losses from raw material price volatility, management maintains a positive outlook, targeting a 10-12% annual volume growth CAGR over the next three to five years.

Capacity Expansion and Capex

The company has completed Rs 65 crore of its planned Rs 220 crore capex. The Nitrile Butadiene Rubber (NBR) project is scheduled for commissioning in April 2027, while the Styrene Butadiene Rubber (SBR) latex plant is slated to come online in the second quarter of FY28.

Risks to watch

Management highlighted that working capital remains elevated due to higher input costs, impacting inventory and receivables. Additionally, inventory losses tied to raw material price fluctuations in oil and butadiene remain a key variable affecting quarterly profitability. Future growth also depends on the successful capacity utilization of new plants over the coming 2-3 years.

Context metrics

For the first half of FY27, the company recorded total revenue of Rs 1025 crore, a 44% increase. EBITDA for H1 stood at Rs 175 crore, with margins expanding 599 basis points to 17.12%.