Lords Chloro Alkali reported a 14.6% revenue increase to Rs 115.51 crore in Q2 FY27, driven by higher volumes in caustic soda and chlorinated paraffin wax. Despite the top-line growth, EBITDA margins tightened to 16.29% due to softer caustic soda prices. The company is aggressively pushing its green strategy, having commissioned a 21 MW DC solar plant to reduce energy costs.
Lords Chloro Alkali Q2 Revenue Rises 14.6% Amid Margin Headwinds
Revenue grew 14.62% YoY to Rs 115.51 crore; EBITDA margins contracted by 464 bps to 16.29%.
Reader Takeaway: Volume growth in core chemicals remains strong, though lower caustic soda realizations continue to squeeze operating margins.
What just happened
Lords Chloro Alkali reported its financial results for the second quarter of fiscal year 2027. While revenue saw a healthy increase to Rs 115.51 crore from Rs 100.77 crore in the same period last year, the company faced profitability challenges. Profit After Tax remained nearly flat at Rs 9.02 crore compared to Rs 9.04 crore in Q2 FY26. The EBITDA margin declined from 20.93% to 16.29%, primarily attributed to lower market realizations for caustic soda.
Why this matters
The company is in the middle of a massive Rs 315 crore capital expenditure cycle (FY24-FY28). Shareholders are looking for volume growth to compensate for the volatility in chemical pricing. The ability to offset rising input costs through renewable energy integration is central to the management's long-term margin improvement plan.
Strategic Capex and Renewables
Lords Chloro Alkali is rebranding itself as a 'Green Chemical Company.' The company successfully commissioned a 21 MW DC captive solar plant in Bikaner, Rajasthan, during the quarter, including battery storage capabilities. This brings their total renewable capacity to 47 MW DC. Management aims to increase the renewable energy mix to 80% in the medium term to structurally reduce power expenses, which currently represent 36% of their total production costs.
Risks to watch
Caustic soda price fluctuations remain the primary risk to bottom-line performance. Investors should also monitor the company's debt-to-equity profile as the ongoing Rs 165 crore expansion for FY26-FY27 continues. Execution delays in reaching the 360 TPD caustic soda capacity target by Q4 FY27 could impact projected growth.
What to track next
The market will focus on the tangible reduction in power costs resulting from the new solar installations and the successful scaling of the Chlorinated Paraffin Wax (CPW) unit to 100 TPD.