INDO BORAX & CHEMICALS LTD – CONCALL HIGHLIGHTS
#Q1FY27
Q1FY27 Performance
- Operating revenue grew 31.3% YoY to ₹70.36 Cr vs ₹53.57 Cr.
- EBITDA increased 62.2% YoY to ₹19.8 Cr, with 28.1% EBITDA margin.
- PAT grew 59.3% YoY to ₹16.25 Cr; PAT margin improved 430 bps to 22.3%.
- EPS stood at ₹5.07.
- Growth driven by better capacity utilisation, operational efficiency and higher realizations.
FY27 Guidance
- Management maintained FY27 revenue guidance of ₹250–260 Cr vs ₹215 Cr last year.
- Target EBITDA margin ~20%; absolute EBITDA expected to grow ~11–12%.
- Q2 expected to be softer due to monsoon; Q3 expected to recover.
- Management does not expect Q1's 28% EBITDA margin to sustain through Q2 due to higher raw-material costs and seasonality.
Boric Acid
- Indo Borax commands ~50% market share in its operating markets.
- Nameplate boric acid capacity: 20,000 TPA.
- FY26 production was 15,917 tons; FY27 target is ~18,000 tons.
- Practically achievable capacity utilisation expected at 96–98% after planned maintenance.
- Boric acid prices moved from ~₹127 to ₹155–160, though Q2 pricing may remain softer.
- Pricing is based on raw-material costs + market acceptance, with the company positioned as a premium supplier.
IP-Grade Boric Acid
- IP-grade currently contributes only ~3–5% of boric acid volumes, but carries better margins.
- Management is expanding relationships with pharma, personal-care and other end users.
- IP-grade business is growing rapidly from a small base and is expected to become an important margin/growth lever.
DOT Expansion
- DOT production was ~750 tons earlier, increased to ~900 tons last year.
- FY27 target: 1,500 tons.
- Current nameplate capacity is 6,000 TPA, leaving significant room for growth.
- DOT is a forward-integrated product and generates additional value from internally produced boric acid.
- DOT expected to contribute roughly 8–9% of total business this year vs ~6% last year.
CapEx & New Products
- Company plans around ₹50 Cr CapEx over the next 2–3 years.
- Around ₹20 Cr+ planned for boron oxide.
- Around ₹20–25 Cr planned for additional boric acid capacity; zinc borate also planned.
- New capacities are expected to support higher growth and margins from FY28 onward.
Cronox Acquisition
- Board approved acquisition of 64.26% of Cronox Lab Sciences.
- Cronox has 185 products across excipients, reagents, pharma, API, nutraceuticals and laboratory chemicals.
- Acquisition provides access to global markets, distributors and complementary customers.
- Indo Borax brings stronger operations, procurement, supply chain and leadership capabilities.
- Management sees major synergies through cross-selling + geographical expansion, rather than direct chemistry adjacency.
Cronox CapEx
- Cronox has a planned ₹110 Cr CapEx, to be executed in phases.
- Cronox currently has around ₹80 Cr cash on its balance sheet.
- First phase requires around ₹55–60 Cr, which can be funded through internal accruals.
- Full CapEx execution expected to take 18–24 months.
- Benefits expected to start in FY29, with full impact in FY30–31.
- Post-expansion, Cronox revenue potential could reach 3–4x current levels, depending on product mix.
Acquisition Funding
- Consideration for 64.26% Cronox stake: ~₹250 Cr.
- About ₹134–135 Cr from Indo Borax internal accruals/cash.
- Sale of two non-core Mumbai properties expected to generate ~₹48 Cr.
- Balance to be funded through a term loan; promoter group has committed an additional ₹25 Cr contingency.
- Total funding available: ~₹432 Cr vs requirement of ~₹400 Cr.
- Company plans to complete the acquisition without waiting for the full open-offer process; open offer will run in parallel.
Cronox Integration Strategy
- Both companies will currently remain separate listed legal entities; no merger decision has been taken.
- Indo Borax leadership will initially provide common leadership to both businesses.
- Existing Cronox promoters will continue for a period and retain ~9.95% stake.
- A dedicated Cronox leadership team is expected to be developed over the next 1–2 years.
- Further acquisitions are not the immediate priority; focus is on successfully integrating Cronox.
Cross-Selling & Global Opportunity
- Indo Borax currently sells boric acid 100% in India.
- Exploring expansion into Southeast Asia and South America.
- Cronox has strong distributor networks in Europe and North America.
- Opportunity to cross-sell products to common pharma/personal-care customers.
- Management sees cross-selling opportunities on both customer and geographical basis.
Balance Sheet / Promoter
- Edelweiss' stake in Indo Borax is confirmed as a pure equity investment, independent of promoter financing.
- No specific timeline yet for unpledging promoter shares; financing arrangement remains a work in progress.
- Management's stated objective is to unlock value, grow EBITDA and improve shareholder value through professional management and complementary acquisitions.
KEY TAKEAWAY
- Strong Q1 + 96–98% utilisation + Cronox acquisition create multiple growth levers beyond boric acid.
Stock Fundamental in detail
@Fundamental3
September 3, 2026 391 1
