DCW Q1 FY27 Earnings Call Transcript Released

DCW Limited has released the transcript of its Earnings Conference Call held on August 14, 2026, to discuss the unaudited financial results for Q1 FY27. The call featured management including Mr. Saatvik Jain (President), Mr. Sudarshan Ganapathy (CEO), and Mr. Pradipto Mukherjee (CFO).

During the call, management highlighted that Q1 FY27 was a challenging quarter, particularly for the PVC business, due to external disruptions like competitive exports from China and the conflict in West Asia affecting feedstock availability and pricing. Revenue from operations grew 14% year-on-year, driven by a 38% growth in Specialty Chemicals, but declined 11% sequentially. Profitability was significantly impacted by lower PVC production, higher input costs (VCM), and weaker domestic realizations due to temporary suspension of import duties and increased imports. Management noted these pressures were largely event-driven and expected the operating environment for PVC to be more constructive going forward with improved VCM availability and normalized import duties.

The Specialty Business demonstrated resilience, with CPVC production and sales ramping up, and Specialty Chemicals EBITDA growing approximately 20% year-on-year. Demand for Synthetic Iron Oxide Pigments (SIOP) remained healthy. The company is focused on increasing its value-added product contribution.

FY27 is marked as a phase of growth, with plans to fully repay legacy long-term debt during the year and aiming to be effectively net debt-free by the end of FY27. A significant leadership transition was announced with the appointment of Mr. Sudarshan Ganapathy as CEO.

DCW also announced a INR250 crore investment program over the next 2-3 years. Phase 1 includes expanding Synthetic Iron Oxide Pigment capacity from 30,000 to 45,000 tons per annum, with completion targeted by Q4 FY28. Additionally, an investment in captive power infrastructure at the Sahupuram facility is planned, also for completion by Q4 FY28, to lower power costs and improve efficiencies. These investments target a minimum incremental ROCE of 20%.

Financially, Q1 FY27 revenue stood at INR542 crore (a 14% Y-o-Y growth), with Specialty segment revenue at INR177 crore (33% of total). Basic Chemicals revenue declined 18% to INR361 crore, mainly due to inventory liquidation of Synthetic Rutile in Q4 FY26. EBITDA was INR41.4 crore (down 28% Y-o-Y), with the Basic Chemicals segment reporting a negative EBITDA of INR14 crore due to PVC business disruptions. Finance costs reduced by 2% Y-o-Y to INR14.8 crore, reflecting deleveraging efforts. The company migrated to the new tax regime, resulting in a reduction in net deferred tax liability by INR34 crore.

Management expressed confidence that upcoming quarters will reflect improved operating conditions and better financial performance as the one-time headwinds subside. They anticipate FY27 to close at a better level than the previous fiscal, with a steady-state EBITDA target of around INR300 crore.