Khaitan Chemical Q1 FY27 Results (NSE: KHAICHEM)
Signal: Revenue declined
The read
A sharp sequential rebound in revenue and profitability after Q4's trough, but the year-on-year picture shows a business undergoing a structural shift: the Fertilizers segment is contracting while the Chemicals segment is growing fast – albeit with compressed margins. Raw material cost as a share of revenue surged to 91%, the highest in recent quarters, squeezing gross margins. The standalone nature (no subsidiaries) means the earnings quality is directly tied to the parent's operations.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹22.04 Cr | -6% | 29% |
| Net profit | ₹1.09 Cr | -49% | |
| EPS | ₹1.13 | ||
| EBIT margin | 11.34% |
P&L walk
Revenue swung sequentially (+29% QoQ) but declined 6% YoY; the Chemicals segment drove the recovery (₹1,099.8 Cr, +89% QoQ) while Fertilizers continued to shrink (-19% QoQ). EBITDA margin improved 290bps QoQ to ~11.4% but remained 370bps below the year-ago level; raw material cost jumped 34% YoY and 65% QoQ, consuming a larger share of revenue (91.3% vs 64.2% a year ago). Net profit of ₹109.14 Cr recovered sharply from Q4's ₹54.24 Cr loss but was less than half the ₹214.14 Cr reported a year earlier; total comprehensive income followed a similar pattern.
Segments
The Chemicals & Specialty Chemicals segment is the primary earnings driver: its segment result of ₹182.38 Cr accounted for 85% of total segment profit (₹213.90 Cr) and more than reversed Q4's slide (₹54.35 Cr), while the Fertilizers segment's result fell 77% YoY to ₹31.52 Cr, dragging the group; revenue share tilted sharply towards Chemicals (50% of total vs 29% a year ago).
Key positives
- Chemicals segment revenue nearly doubled QoQ to ₹1,099.79 Cr (+89%), offsetting the Fertilizers decline and driving a 29% QoQ revenue recovery.
- PAT rebounded to ₹109.14 Cr from the Q4 loss of ₹54.24 Cr, a swing of over ₹163 Cr.
- Segmental assets in Chemicals grew 5% QoQ (₹4,870.64 Cr vs ₹4,633.52 Cr), indicating continued investment in the higher-growth segment.
- No equity dilution – paid-up capital constant at ₹9.70 Cr.
Key concerns
- Revenue declined 6% YoY on a weak Fertilizers performance (₹1,116.43 Cr, -40% YoY), which is the larger segment by assets.
- Gross margin severely compressed: raw material cost consumed 91.3% of revenue vs 64.2% a year ago, squeezing profitability.
- PAT halved YoY despite higher revenue, as input cost inflation outpaced realisations.
- Finance costs remained elevated at ₹8.20 Cr, limiting operating leverage.
- No disclosure on capex or cash flow – visibility on the asset expansion plan is limited in a quarterly filing.
Research and educational content only. Not investment advice.