Platinum Industries Limited (PLATIND) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q2 and H1 FY27 post earnings conference call of Platinum Industries Limited. Today on the call from the management, we have with us Mr. Krishna Rana, Chairman and Managing Director, and Mr. Ashok Botra, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risk and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to brief us about the business highlights for the period ended September 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.

Good afternoon, everyone. I am Krishna Dushyantrana, Chairman and Managing Director of Platinum Industries Limited, and I am joined by our Chief Financial Officer, Mr. Ashok Votra. Let me begin by thanking all our employees, customers, business partners, stakeholders, and shareholders for their continuous trust and support. Before we dive into the numbers, I want to step back and reflect on our strategic direction. Despite a dynamic macro environment and shifting global supply chain currents, Platinum Industries has continues to reinforce its position as a leading player in PVC stabilizers, lubricants, and specialty chemicals. Our commitment to product and geographic expansion, localization, and robust operational execution continues to yield structural dividends. The second quarter of financial year 27 has been an important period in our capacity expansion journey. As we transition towards the operational scaling of our expanded manufacturing facilities, we are encouraged by the progress made across our key projects and remain focused on translating these investments into sustainable business growth over the coming quarters. On a consolidated basis, revenue from the operations in Q2 F527 stood at 121.3 crores compared with INR 98.4 crore in Q2 F526. Profit before tax stood at INR 10.5 crores while profit after tax was INR 7.6 crore. On a consolidated basis, revenue from the operations in H1 FY27 stood at INR 230.20 crores compared with INR 213.8 crore in H1 FY26. Profit before tax stood at INR 25.5 crores, while profit after tax was at INR 18.7 crores. Our immediate focus centers on a gradual capacity ramp-up, higher utilization levels, process optimization, and deeper customer engagement, unlocking the structural benefits of operating leverage as production scales. Moving to our international expansion plans, our Egypt manufacturing facility remains a key strategic priority. Commissioning timeline, the initial capacity of 30,000 metric tons per annum as mentioned in the prospectus were further increased to 60,000 metric tons per annum. The partial capacity is expected to commence by 31st December 2026 and the remaining capacity shall be commissioned or commenced by 31st March 2027. Strategic advantages offers duty-free access to United States through qualified industrial zones, preferential trade access to South American markets, and a cost competitive production hub closer to global polymer editors market and closer to the Western world. Outlook expected to contribute meaningfully to our growth from FI28 onwards, significantly strengthening our export mix and long-term margin profile. Alongside core capacity expansions, we continue to broaden our product portfolio and develop new growth engines. Platinum oleochemicals, we have commenced sales of oleochemical derivatives and specialty chemicals, initiating market development in India and exploring export opportunities. Sales from this segment generated An amount of 11.4 crores in Q2FI27 and Rs.16.7 crore in H1FI27. In September 2026, Rivadu Life Sciences has entered into an exclusive sale and purchase agreement with South Korea-based Kerjen Company Limited for its core glutide health functional food products in India with potential for local manufacturing. As we move into the second half of FI27, our focus remains squarely on execution and operational scaling. Our key priorities are gradual ramp-up, I mean, utilization, improvement at the expanded Palgar facility, timely completion and commissioning of the Egypt manufacturing facilities, trending our position in premium lead-free PVC stabilizers and CPVC editives, expanding our domestic and international customer base, scaling up oleochemicals and other new product initiatives, improving manufacturing efficiencies through automation. 1. Maintaining financial discipline while pursuing growth opportunities. We remain exceptionally confident in the long-term opportunities across our core PVC and CPVC editors business. With that, I would now like to hand over the call to our CFO, Mr. Ashok Botra, who will take you through the financial performance for the quarter and half year in greater detail. Thank you very much.

Thank you, sir. Good afternoon, everyone. Thank you, sir. Good afternoon, everyone. I will now briefly take you through our financial performance for Q2 and H1 Fy27. Starting with our consolidated performance, revenue from operation for Q2 stood at Rs. 121.3 crores compared with Rs. 98.4 crores in Q2 Fy26, registering a healthy growth of 23.3%, EBITDA for the quarter stood at 10.8 crores, With margin of 8.9% compared to 13.6 crore with EBITDA margin of 13.8% in Q2 FY26. Profit before tax for Q2 stood at 10.5 crores compared with Rs 14.8 crores in the corresponding quarter of the previous year. While profit after tax came in at Rs 7.6 crores compared with Rs 11 crores. Basic and diluted EPS for the quarter stood at 1.40 per share. For the first half of this fiscal year, our consolidated revenue from operations stood at 230 crores compared to rupee 213.8 crores in H1 FY26, registering a growth of 7.7%. EBITDA stood at 24.3 crores with EBITDA margin of 10.5% compared to 28.7 crores and 13.4% respectively in Q2 FY26. Profit before tax stood at Rs 25.5 crores compared with Rs 32.60 crores. Paid for half-year, H1 stood at Rs 18.7 crores compared with Rs 24.1 crores in the corresponding period. Moving to our stand-alone performance, revenue from operation for Q2 stood at 120 crores compared with rupee 96.9 crores in Q2 FY26, registering a growth of 23.9%. Stand-alone EBITDA for the quarters stood at 10.5 crores with a margin of around 8.8% compared with rupee 14.2 crores with a margin of 14.6% in Q2 FY26. Profit before tax for the quarter stood at 10.7 crores compared with Rs. 16.2 crores, while pet stood at 7.8 crores compared with Rs. 12.1 crores with basic and diluted EPS at 1.43. For H1 standalone, revenue from operations stood at 30.4 crores, compared to 199.8 crores in H1 FY26, registering a growth of 15.3%. EBITDA for H1 stood at 23.4 crores, compared to Rs.27.9 crores. Profit before tax stood at 23.9 crores, compared with 33 crores in H1 FY26. While PET stood at 17.4 crores compared with 24.6 crores, basic and diluted EPS stood at 3.17 per share. To give you some context on the number, the volatility in our property reflects the ongoing transition and ramp-up phase of our expanded manufacturing capacity, as well as temporary lower share of high-margin products like lead-free, PVC, and surging ocean freight in the first half of FY27. However, as utilization increases, we fully expect operating leverage to improve. The standalone performance similarly reflects our ongoing capacity transition and investment in our manufacturing platform, with our core focus now steadily on improving utilization, optimizing our product mix, and driving operation efficiency. Thank you. We are now happy to take your questions.

Thank you, sir. We'll now begin the question and answer session. All those who wish to ask a question, please use the option of raise hand and we'll invite you to ask a question. If you are unable to raise hand, you can put your questions in the chat box. We'll take the first question from Arnav Sakuja. Please go ahead.

Hi, thank you for taking my questions. So my first question is that, you know, we've recently made a couple of new senior hires, as we've mentioned, you know, in our press release and stuff as well. So can you give us some details on these new senior hires?

So, we have onboarded, like Mr. Milind Magar, who is heading our CPVC division. Myself, Ashok Bothra, who joined last year in September 25, in place of Mr. Gyanadip Mittal. Then we hired Mr. Anand Shankar, who is heading our R&D and technical research. So, we are in the process of, you know, strengthening our organization capability. So, and in fact, we also hired CMO, also Mr. Nilesh Bendale, last year. So these are the few employees which we had hired, and we recruited one, this Global R&D Head also, Dr. Frank.

Got it. And, you know, can you give us some outlook on how the pipes industry has been in Q2? And now given that, you know, the last couple of days we've seen crude also come down quite significantly, can we expect some improvement within the pipes industry?

So, Arnav, I feel as per the, in fact, data that we have received in the, of, you know, from April to September, there has been a significant degrowth in the PVC industry, PVC pipe industry. So this is also the records, you know, that we have, you know, we keep talking to companies like Reliance. And so they were also like, you know, 80 to 20% they had a degrowth in terms of the sales. So, you know, looking at the, you know, the crude oil or there is no direct relation of crude to the, you know, the polymer prices or something like that. But today, what is hurting the industry is the shipping, shipping line costs. So I feel that, you know, the pressure in terms of the shipping line costs is always going to be higher. I don't know when it's going to come down. So we are basically not emphasizing or probably not envisioning that this will come down in the next three to four months. But the pipe industry has picked up its sales, you know, from the month of September, September mid, and we are seeing a good growth now in the last two quarters.

All right. Thanks for answering my questions. Thank you.

Thank you. All those who wish to ask a question, please use the option of raise hand. We'll take the next question from Bhargava Buddadev. Please go ahead.

Yeah, good afternoon, Tim. Sir, you mentioned that on the domestic side, obviously, there is some weakness in terms of demand. But if you look at your revenue growth, your revenue numbers continue to grow. So, is it that you have exported more given the domestic slowdown and hence, there is some increase in your other expenses, which is primarily like the ocean freight?

Yes, so in Q1 and Q2, you know, the export figures are almost similar. Only this quarter, in the second quarter, our export has, you know, grown by 10 to 15%. But the shipping line cost has really hurt the, you know, costings of, in fact, the, you know, the profits in the company. And if you see that, you know, in first quarter, we had done somewhere around 22 crores of revenue and exports. In the second quarter, we've done 24 crores of exports. In 22 crores, the logistics cost was somewhere around 2.5 crores. But with the same 24 crores of revenue in this quarter, the shipping cost has gone to, you know, 5, almost double, the 5 crores. So that is what has led to, you know, decline in a margin this quarter. But I think we will cover it up in the next two quarters.

So, what we are saying is that shipping costs have started going down or you believe...

As of now, we are not getting any such indication, but I think it should come down because it is all not on the right levels.

And you think that in the second half, the mix of domestic will increase versus...

Yes, yes, it already increased. It started increasing from the month of October. So, probably we are on a very good run rate of the revenue.

Secondly, what is the timeline now for the commissioning of the Egypt plant and do we see any revenues in FY27 from Egypt?

Egypt F527 say 25 to 30 crores we are expecting the revenue from the Egypt plant. That is we will be considering only Jan, Feb, March these three months of you know sales and probably by 31st December we will start the stabilizer production by you know because it's almost under completion right now. So by 31st December, we'll start the production. So we'll consider at least January mid to March as two and a half months of sales period.

And once the Egypt plant starts commissioning, you don't have to export from India, right?

No, so from India, we'll be only exporting to some East Africa and Bangladesh and neighboring countries. Rest, all the exports will be done from the Egypt plant.

And in terms of EBITDA margin guidance, obviously, this year has been challenging, but if we go to, say, by 28, do you think that we can come back to our earlier range of 13% EBITDA margin?

Yes, yes, yes, absolutely, absolutely.

Great, sir. Thank you very much and all the worries.

Thank you.

We will take the next question from Sargun Kaur. Please go ahead.

Hello, am I audible?

Yes.

Hi sir, thank you for the opportunity. Sir, I have one question. Where do we stand in terms of operations and utilization levels with respect to new PALGA facility?

It is around say 35-40% we are utilizing as of now.

Okay sir, thank you.

Thank you. We'll take the next question from Odita Koshay. Please go ahead.

Good afternoon, sir. Thank you for the opportunity. Sir, the company appears to be struggling a bit to translate incremental revenue into operating profitability. How much of the gross margin pressure is due to PVC and other input cost movements, and how much is due to competitive pricing?

So there is no major decline in the margin as far as products are concerned. Hardly 1% in CPVC. But Q1Q, there is not major pressure or decline. But if you take the case of lead-free in F526 versus H1, then there is a drop of 3% to 4% in lead-free PVC.

Okay, sir. And in your earlier investor communications, you had indicated over around 35 to 40% revenue growth for FY27. However, H1 revenue growth is only around 7.7% and the profitability has declined a bit. So what has fundamentally gone wrong with the original business assumptions? Like what would your revised guidance for FY27 be in the light of underperformance in H2?

So there are multiple factors. One is the earlier we estimated that our Egypt operation will start partially commence from, say, September, October. So there is a sales. We are missing sale of three months from Egypt operation, say, around 30, 35 crores. So that is one of the reasons. Otherwise, we are on track only to achieve. So in the next three years, we have said that we will achieve a CAGR of around 35%, which we stand by.

Okay, sir. And the company has already invested significant capital in expanding its manufacturing footprint. The depreciation has increased and finance costs have also risen sequentially, while the EBITDA has declined. So, at what point will these investments begin generating incremental returns?

So, once the regulation level goes up, we will see margin expansion. Secondly, finance cost is not increased. We are a debt-free company until now. So, because of lease entry, there is an increase in the finance cost. Otherwise, we are a debt-free company.

Okay, sir. Thank you for taking my questions.

All the best.

Thank you.

Thank you. All those who wish to ask a question, please use the option of raise hand. We'll take the next question from Khushbo Gandhi. Please go ahead.

So, just wanted to know what is the volume data of CPVC, PVC, and PVC LED-free for Q2.

So, Khushu, we don't share this volume data. So, in case you wish to, we can connect offline.

Okay, and on the Egypt side, like we said that partly it would be commissioned in December and partly would be commissioned in March. And which chemicals would be commissioned as in PVC lead or PVC lead will be commissioning in December?

Lead will be commissioned initially, then subsequently we will complete other products.

Oh, yeah, that's it from my side.

Thank you. We will take the follow-up question from Sargun Kaur. Please go ahead.

Hi, sir. Am I Audubon?

Yes.

Sir, the other non-current assets have increased sharply from 1.94 crores in March 26 to 28.96 crores in September 26. What exactly constitutes this increase?

Thank you. So, can we take some other question? Give me two minutes.

So, my next question is, could you throw some light on a progress in Rivadu?

So, Rivadu Life Sciences, we registered in the month of April, and probably we wish to get into a product called Corglutide, which is basically a molecule that is used for weight management. And this is an exclusive contract we have done with the Korean company to represent them with an intent of starting the manufacturing facilities in India, if the sales picks up well. So, this is basically a nutraceutical product, but directly competing with products like Ozempic and Munjaro. So this is where the growth plan is for the company in terms of setting up the production facilities in future after a pilot sales that we completed in the first year.

Okay, sir. So, considering that there are already several players in the Indian local and international, how do you plan to play the price point and the strategy in this category?

So the price point all depends. We're also studying the market right now, right? At what price point we should be, you know, like, for example, the dosage of this particular product is like for 30 days, you know, one bottle you have to consume in 30 days, that would cost somewhere around 10,000 to 12,000, which will be again 10-20% cheaper than Munjaro and Ozympic also.

Okay, so what's the strategy in marketing, branding, and sales and visibility, according to you?

So, regarding branding strategy and sales and marketing, of course, in sales, we are going through a distribution model as well as the prescription model and an OTC marketing for this. So, of course, we are also studying the positioning strategy right now. We are in talks with many agencies. Probably, I think, in the next 10 to 15 days, we should be ready with that.

So regarding your question, this increase in the non-current assets, so these are the capital advances given to the equipment supplier or erector in our Egypt substitute.

Okay, sir. So also just to recheck, since I missed, what's your revised revenue target that we can assume for the full year and F?

Actually, we don't increase to, you know, give guidance on this, but otherwise we have given that over a period of three years, we will achieve say 35% CAGR. Otherwise, it will be tantamount to forward-looking, ma'am.

Okay, sir. Thank you so much for answering my question.

Thank you. All those who wish to ask a question, please use the option of raise hand. You can also put your question in the chat box.

There is one question from my side, Krishna. There have been a lot of plans that we have been working with respect to our Palgar facility, Egypt facility, and now the tie-up that we have done with respect to semaglutides. Do we see all of this coming together from second half onwards now?

Yes, of course. Yes.

So, which means the 3-4 target that we're looking at 35-40%.

So, Pharma will be Q1, FY28. Egypt will be Q4, FY27.

And where do you see the utilization levels moving in Palgarh now?

So as of now, we are on 30% of utilization levels, and we are, of course, gaining a lot of customers. We've added many new customers this year. You know, probably, I think we will be ramping up the, you know, sales very soon in the next, you know, one and a half years. So probably in the next two years, we wish to cross around 50% of the utilization.

Thank you. Anybody who wishes to ask a question, please use the option of raise hand. There is a question in the chat box from Shreyans Jain is asking, where do you see margins going forward since high margin lead free would be small portion of total capacity expansion. Do you see margins going down going forward?

As per our projections, we have already mentioned that, you know, we will be maintaining our EBITDA margins at 13 to 15% year on year.

Okay. Okay, sir. Thank you. Anybody who wishes to ask a question, please use the option of raise hand. Sir, since there are no further questions, would you like to give any closing comments?

Thank you. Thank you very much, Captify, for organizing this, and thank you to all our BeNoTrusted partners, shareholders, and wishing you all a very happy Diwali.

Thank you, sir. Thank you to the management team, and thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.

Thank you.