Sudarshan Chemical Industries Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Sudarshan Chemical Industries Ltd filed with BSE on 04 Jun 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Sudarshan Chemical reported that the acquired Heubach/Clariant group delivered Business EBITDA of Euro 11 million in Q4, ahead of its projected Euro 9-10 million range, while reducing inventory by Euro 29 million against a planned Euro 20 million. Consolidated net debt fell from INR934 crores in December 2025 to INR755 crores in March 2026, and RIECO's EBITDA turned positive at INR10 crores for FY26 versus a loss of INR17 crores the prior year. Management described the quarter's growth as driven by customers resuming purchases as destocking eased, alongside ongoing integration and value-capture initiatives across the combined pigment business.
1 statement from this call is not shown because its supporting quote could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Business EBITDA (Acquired group): Euro 11 million (Q4 FY26)
p. 4
“We had projected Business EBITDA of Euro 9-10 million , but we delivered, Euro 11 million.”
Rajesh Rathi, page 4 of the filed PDF · View the filing
Inventory reduction: Euro 29 million (FY26)
p. 4
“We had planned to reduce inventory by 20 million. We've reduced inventory by 29 million”
Rajesh Rathi, page 4 of the filed PDF · View the filing
Net debt: INR755 crores (March '26)
p. 4
“the net debt, which was at INR934 crores in December '25 has reduced to INR755 crores on March '26”
Rajesh Rathi, page 4 of the filed PDF · View the filing
Reported EBITDA: INR73 crores (Q4 FY26)
p. 5
“Coming back to the numbers, the reported EBITDA for the quarter is INR73 crores, which is adjusted with one-time purchase price allocation credit due to the Business Combination Accounting of INR37 crores.”
Nilkanth Natu, page 5 of the filed PDF · View the filing
Business EBITDA (underlying): INR118 crores (Q4 FY26)
p. 5
“With this our business EBITDA for the quarter underreporting is INR118 crores.”
Nilkanth Natu, page 5 of the filed PDF · View the filing
RIECO revenue: INR268 crores (FY26)
p. 6
“For financial year '26, RIECO had reported the revenue from operation of INR268 crores compared to INR228 crores last year, the growth of 17.5%”
Nilkanth Natu, page 6 of the filed PDF · View the filing
RIECO EBITDA: positive INR10 crores (FY26)
p. 6
“On the EBITDA we are actually in the rebound and recovery from the negative INR17 crores EBITDA to positive INR10 crores.”
Nilkanth Natu, page 6 of the filed PDF · View the filing
Net debt-to-equity ratio: 0.3x (FY26)
p. 6
“net debt-to-equity ratio is at also 0.3x.”
Rajesh Rathi, page 6 of the filed PDF · View the filing
Depreciation: INR50 crores (Q4 FY26)
p. 10
“So the depreciation for the quarter is at INR50 crores.”
Nilkanth Natu, page 10 of the filed PDF · View the filing
Annualized depreciation run rate: INR347 crores (FY26 annualized)
p. 10
“I'm sorry, not INR196 crores, INR347 crores.”
Nilkanth Natu, page 10 of the filed PDF · View the filing
Energy cost as % of revenue: 6% to 7%
p. 13
“So Rajesh ji, this is in the range of 6% to 7%.”
Nilkanth Natu, page 13 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Acquired group EBITDA synergy target — 90 million to 100 million · next 3 to 4 years
stated firmly by Rajesh Rathi
p. 7
“We expect to achieve 90 million to 100 million over the next 3 to 4 years as guided at the time of acquisition.”
Rajesh Rathi, page 7 of the filed PDF · View the filing
Acquired group EBITDA — 35 million · next financial year
stated firmly by Rajesh Rathi
p. 7
“We expect to deliver an EBITDA of 35 million for the next financial year.”
Rajesh Rathi, page 7 of the filed PDF · View the filing
Inventory reduction — EUR15 million to 20 million · this year
stated as an aspiration by Rajesh Rathi
p. 8
“we hope that we are able to further optimize our inventories to the tune of EUR 15 million to 20 million.”
Rajesh Rathi, page 8 of the filed PDF · View the filing
Legacy Sudarshan business growth — 8% to 10% · this year
stated conditionally by Rajesh Rathi
p. 12
“Given the geopolitical crisis, we should deliver 8% to 10% of growth this year.”
Rajesh Rathi, page 12 of the filed PDF · View the filing
Legacy Sudarshan margin — FY27
stated as an aspiration by Rajesh Rathi
p. 10
“We are hoping to maintain a healthy margin on the Legacy Sudarshan business.”
Rajesh Rathi, page 10 of the filed PDF · View the filing
One SAP integration project completion — this year-end
stated firmly by Rajesh Rathi
p. 4
“we've decided to launch the One SAP Drive project Integra to integrate 4 systems into 1 integrated system.”
Rajesh Rathi, page 4 of the filed PDF · View the filing
GCC operational timeline — next 6-8 months
stated firmly by Rajesh Rathi
p. 4
“In the next 6-8 months, they should get fully operational.”
Rajesh Rathi, page 4 of the filed PDF · View the filing
Full integration impact — next two financial years
stated firmly by Rajesh Rathi
p. 9
“The entire integration impact would come in the next two financial years.”
Rajesh Rathi, page 9 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said further optimization of EUR 15-20 million is expected, without specifying profit/loss on the remaining stock.
Answered by Rajesh Rathi
Asked by Anil Nahata: How much inventory remains to be liquidated and at what price outcome given raw material inflation?
p. 8
“we hope that we are able to further optimize our inventories to the tune of EUR 15 million to 20 million.”
Rajesh Rathi, page 8 of the filed PDF · View the filing
Management said the acquired group's debt would be serviced from cash flow generated by the acquired operations and that a ballooning repayment schedule starts this year.
Answered by Nilkanth Natu
Asked by Anil Nahata: How will the group reduce debt held mostly in the acquired entities given cash is concentrated in India?
p. 8
“As we had taken this acquisition finance, the repayment schedule is a ballooning schedule.”
Nilkanth Natu, page 8 of the filed PDF · View the filing
Management attributed the improvement to customers resuming buying after destocking ended, not restocking, with Q4 being seasonally the strongest quarter.
Answered by Rajesh Rathi
Asked by Gagan Dixit: Was the Q4 revenue improvement true demand recovery or restocking, and what is the current April-May run rate?
p. 9
“this is like people have started buying. Earlier quarters, there was a destocking impact.”
Rajesh Rathi, page 9 of the filed PDF · View the filing
Management said they aim to maintain a healthy margin by passing on cost increases through the value chain.
Answered by Rajesh Rathi
Asked by Gagan Dixit: Is the Legacy Sudarshan margin sustainable for FY27 given raw material cost volatility?
p. 10
“We are making every effort to pass on any cost increases through the value chain to our customers so that our margins are protected.”
Rajesh Rathi, page 10 of the filed PDF · View the filing
Management explained a one-time reduction due to remeasurement of fair value of assets under purchase price allocation finalization.
Answered by Nilkanth Natu
Asked by Nilesh Ghuge: Why did quarterly depreciation drop sharply to INR50 crores from the prior INR99-100 crore run rate?
p. 10
“this has given one-time reduction in the depreciation cost, which has been reflected in the reported Q4”
Nilkanth Natu, page 10 of the filed PDF · View the filing
Management attributed the growth to sequential sales increase and better operating leverage aided by value capture initiatives, without price increases.
Answered by Rajesh Rathi
Asked by Ranjit Cirumalla: How much of the Q4 sequential growth in sales versus expenses was due to volume versus pricing, and how does this affect EBITDA?
p. 11
“Majorly volume growth -- volume-related growth has come in. We have not gone through any price increases, in Q4.”
Rajesh Rathi, page 11 of the filed PDF · View the filing
Management said the transformation is not complete and the business needs more time to deliver improved numbers.
Answered by Rajesh Rathi
Asked by Ankur Periwal: What is the outlook for RIECO - hive off, turnaround, or ramp-up?
p. 12
“I think the transformation is not over and the numbers have not substantially improved, which our expectation is.”
Rajesh Rathi, page 12 of the filed PDF · View the filing
Management said they do not intend to profit from the situation and are only passing through actual cost increases to customers.
Answered by Rajesh Rathi
Asked by Rajesh Kothari: Does rising chemical prices allow the company to reduce inventory write-downs and benefit from holding old inventory at lower cost?
p. 13
“What we are doing is we don't want to profit from this situation, and we want to maintain our volumes.”
Rajesh Rathi, page 13 of the filed PDF · View the filing
Management said there is enough capacity headroom in both legacies to support the projected growth without additional capex.
Answered by Rajesh Rathi
Asked by Nitesh Dhoot: What is the current capacity utilization for the legacy and acquired businesses, and is there headroom for growth?
p. 13
“we have enough capacity headroom in both the legacies to grow. And our projection of what EBITDA we've shown in the 3 to 4 years does not require any investment for volumes.”
Rajesh Rathi, page 13 of the filed PDF · View the filing
Management said pigment industry growth tracks regional GDP at roughly 3-4% globally, while the company's own Q4 growth reflected winning back business and destocking ending, not underlying industry growth.
Answered by Rajesh Rathi
Asked by Avinash Nahata: What is the industry demand growth outlook over the next 2-3 years versus company-specific customer win-back growth?
p. 15
“the general industry growth of 2 to 3 years is -- generally the pigment industry goes with the GDP of that area and our overall growth of the industry varies between 3% to 4% globally.”
Rajesh Rathi, page 15 of the filed PDF · View the filing
Risks flagged
Middle East/Gulf war situation increasing raw material costs and supply constraints
p. 6
“the Gulf war situation has definitely impacted our cost base and several raw materials used by one Sudarshan are petroleum-derived and we are facing both price increase and supply constraints.”
Rajesh Rathi, page 6 of the filed PDF · View the filing
Rising energy costs and logistics cost increases
p. 6
“Our energy costs have significantly increased. We have a logistics cost increases, but more importantly logistic returns have increased.”
Rajesh Rathi, page 6 of the filed PDF · View the filing
Geopolitical uncertainty causing muted customer demand and cautious inventory building
p. 14
“quite a few of our customers are seeing a little bit of a muted demand or some of their complementary products not being available, and that's where some of their production levels are low.”
Rajesh Rathi, page 14 of the filed PDF · View the filing
U.S. housing and paint market weakness
p. 15
“The U.S. market, the housing market, the paint market is a little bit in trouble.”
Rajesh Rathi, page 15 of the filed PDF · View the filing
Lag in passing on energy cost increases depending on region and competitor country of origin
p. 13
“However, region-wise and the country of origin of our competitors, there is certain lag in passing on, but we are ensuring that whatever is necessary, we'll pass on the increasing”
Rajesh Rathi, page 13 of the filed PDF · View the filing
Silo mentality and lack of harmonized reporting systems from incomplete prior integration
p. 4
“Hence, a big silo mentality had developed as everyone had to survive on their own.”
Rajesh Rathi, page 4 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.