Vishnu Chemicals Eyes 20% EBITDA Margins by FY28 Amid Expansion

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AuthorVihaan Mehta|Published at:
Vishnu Chemicals Eyes 20% EBITDA Margins by FY28 Amid Expansion
Overview

Vishnu Chemicals reported resilient Q3 FY26 results, with revenue up 2.5% QoQ to ₹411.3 cr and EBITDA up 6% to ₹61.7 cr, margins improving to 15%. The company is executing strategic backward integration via a South African mine acquisition and commercializing Strontium Carbonate. Management targets 20% EBITDA margins by FY28, fueled by new capacities and favourable trade policies, with significant CAPEX planned.

📉 The Financial Deep Dive

Performance Review

Vishnu Chemicals Limited reported a resilient Q3 FY26, defying a soft global macroeconomic environment. Consolidated operating revenues stood at ₹411.3 crores, a 2.5% increase quarter-on-quarter from ₹401.1 crores in Q2 FY26. Gross margins saw a healthy expansion to 44.8% in Q3 FY26 from 43.1% in Q2 FY26, a 1.7 percentage point gain. Consolidated EBITDA grew by 6% sequentially to ₹61.7 crores, with EBITDA margins improving to 15% from 14.5%, a 0.5 percentage point gain. Profit after tax for the quarter was ₹33.7 crores, up 2.6% from the previous quarter.

For the nine-month period ended December 31, 2025 (9M FY26), consolidated operating revenues reached ₹1,159 crores, marking a 10% increase year-on-year from ₹1,053 crores in 9M FY25. Gross profit increased 9.2% YoY to ₹515.2 crores. EBITDA grew 6.9% YoY to ₹175.6 crores, and profit after tax saw a significant 12.7% YoY growth to ₹98.8 crores. The domestic to export sales mix for 9M FY26 was balanced at 49:51.

Strategic Initiatives & Management Commentary

Management detailed key strategic advancements, including the successful acquisition of a Mining Complex in South Africa, a crucial backward integration step for securing raw material supply, with phased operations expected from Q1 FY27. Vishnu Strontium Private Limited has commercialized Strontium Carbonate in Q2 FY26, targeting applications in magnets, ceramics, and metallurgy, with regular sales anticipated from Q1 FY27. This segment is projected to achieve gross margins of 50-52% with an asset turn of 1.5-1.8 at 80% utilization.

Plans are also underway for new production lines for Dimethyl Sulfoxide (DMSO) and select specialty derivatives, targeting commercialization by the end of FY27. Management expressed strong confidence in improving overall EBITDA margins to reach the 20% level by FY28, driven by the chrome ore acquisition, enhanced economies of scale, value addition, and an improved product mix. Capital expenditure (CAPEX) is planned at ₹180-190 crores for FY26 (including DMSO and South Africa mine) and approximately ₹300 crores for FY27 (for chrome oxide green, chrome metal, DMSO).

Risks & Outlook

While the outlook is positive, execution risks associated with integrating the South African mine and scaling up new product lines (like DMSO, targeted for end-FY27) remain. Global commodity price fluctuations could also impact profitability. However, the company is well-positioned to leverage favourable trade policies, including the EU's anti-dumping duty on Chinese Barium Carbonate, US tariff reductions expected to boost chrome chemical exports, and India's custom duty-free import of celestite ore, creating significant opportunities for European exports and improved competitiveness.

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