Earnings call Transcript

Archean Chemical Industries Limited Life’s good with our chemistry August 07, 2026 National Stock Exchange of India Limited BSE Limited Exchange Plaza Listing Operations Bandra-Kurla Complex, Bandra (E) P J Towers, Dalal Street Mumbai-400051 Mumbai-400001 Symbol-ACI Scrip Code- 543657 Dear Sir/Madam, Sub: Transcript of Earnings Call Reference: Intimation of Earnings Call dated July 28, 2026 Pursuant to Para A Part A Schedule III of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the transcript of the Earnings Call held on August 03, 2026, post announcement of financial results of the Company for the quarter ended June 30, 2026. The above information shall be made available on the website of the Company at www.archeanchemicals.com Kindly take the same on record. Yours faithfully For Archean Chemical Industries Limited Vijayaraghavan N E Company Secretary and Compliance Officer M. No. A41671 Regd. Office: No.2, North Crescent Road, T Nagar, Chennai – 600017, Tamil Nadu, India. Ph: +91 44- 61099999, www.archeanchemicals.com, info@archeanchemicals.com; CIN: L24298TN2009PLC072270; GSTIN: 33AAHCA8471D3ZR “Archean Chemical Industries Limited Q1 FY27 Earnings Conference Call” August 03, 2026 “E&OE - This transcript is edited for factual errors. In case of discrepancy, the audio recordings uploaded on the stock exchange on 03rd August 2026 will prevail.” MANAGEMENT: MR. RAMPRAVEEN SWAMINATHAN – MANAGING DIRECTOR MR. R. NATARAJAN – CHIEF FINANCIAL OFFICER MR. RAJEEV KUMAR – DEPUTY GENERAL MANAGER FINANCE AND STRATEGY Page 1 of 18 Archean Chemical Industries Limited August 03, 2026 Moderator: Ladies and gentlemen, good day and welcome to Q1 FY27 Earnings Conference Call of Archean Chemical Industries Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference, over to Mr. Rampraveen Swaminathan, Managing Director. Thank you and over to you, sir. Rampraveen Swaminathan: Good morning, everyone, and a warm welcome to our Q1 FY27 earnings call. Thank you for taking the time to join us today and I hope you all are safe, especially those of you who are in weather-affected regions. On this call today, I'm joined by Mr. R. Natarajan, our CFO, Mr. Rajeev Kumar, DGM Finance and Strategy, members of our finance team, and SGA Investor Relations Advisors. I hope you've had a chance to go through the results and the investor presentation, both of which are on our website and the stock exchanges. In my opening comments, I'll briefly cover the operating environment, key developments of the quarter, and our business and financial performance. Starting off, from an overall perspective, the focus in Q1 was on delivering to our commitments and driving the segmental performance in bromine and bromine derivatives while optimizing industrial salt in a challenging external environment. And I believe that our Q1 performance validates the actions we set out with all of you in the last call. On a standalone basis, revenue for the quarter was INR3,321 million, up 14% year-on-year and up 9% sequentially. This is our highest quarterly revenue in the last five quarters. EBITDA was INR888.7 million, up 26.3% versus the sequential quarter, with margins expanding from 21.8% in Q4 of FY26 to 25.3% in the quarter under consideration. (Errata: To be read as EBITDA was INR838.7 million) Profit after tax on a fully consolidated basis, sorry, profit after tax on a standalone basis was INR405.3 million, up 36% sequentially from the prior quarter. Margins were down year-on- year, largely due to higher logistics costs and purchase price variance on various raw materials, which could not be fully offset by our operating performance. On a consolidated basis, revenue for the quarter was INR3,328.1 million, up 10.7% year-on- year. EBITDA on a fully consolidated basis was INR728.7 million, up 48.5% sequentially, and profit after tax was INR300.5 million, more than double the preceding quarter. Year-on-year consolidated performance was affected by standalone business performance as well as the Page 2 of 18 Archean Chemical Industries Limited August 03, 2026 scaling up costs of our semiconductor business. (Errata: To be read as Profit after tax was INR303.5 million) Three things drove our performance overall in the quarter, actually four things, but three of them are structural and I want to call them out. Firstly, bromine volumes were at the highest in the last five quarters and realizations for the quarter are up 50% year-on-year. Secondly, our derivatives business, Acume, has turned EBITDA positive for the first time. This has been an important area of strategic focus for us, and we continue to make good progress there. Thirdly, on Sulphate of Potash, trial, so the phase, first phase one trials were successfully completed in June 2026. We are in the process of doing our Phase 2 trials by end of Q3 financial year, which will then validate the modified process for commercial production. Operationally, we continue to carry a headwind in industrial salt logistics, which I will address briefly in a while. Both road logistics and sea freight increases have impacted our profitability. In addition to road logistics, sea freight costs have also increased by 30% to 35%, impacting our landed cost to customers in East and South Asia. However, the shape of the business remains positive, and we are confident of entering H2 FY27 with stronger momentum. In terms of just a quick overview on our overall the markets and highlights on our business. On the demand environment, bromine and bromine derivatives demand has remained firm, firm across most geographies. The supply imbalance of the previous two quarters has normalized, but underlying demand from flame retardants, oilfield chemicals, and energy storage applications remain healthy, and our pricing actions continue to hold. Our bromine realization improvement reflects both the market and the approach we have applied to contracts and to customer selections. As the supply shortages have normalized, there has been a correction in pricing. Landed prices in China, for example, have declined by 30% to 40% in the past 12 weeks. In this environment, we work, we continue to work closely with our customers to ensure that we are able to sustain the improvements that have been made in pricing. In industrial salt, the pricing environment has stabilized. After declines through most quarters in FY26, realizations in Q1 were broadly flat. Competitive intensity remains high with new capacity additions in Australia and elsewhere, and the challenges of landed pricing which I have mentioned earlier. But we are starting to see a floor in terms of market pricing and our customer relationships, and our market position remain fully intact. The pricing challenge which you had is a reflection of the gap in South and East Asia, of the gap in South and East Asia between landed prices from India versus landed price of domestic salt in those regions and salt they source from other regions. On the broad macroeconomic environment, the India-US trade discussions, the India-EU FTA negotiations, and the kind of new normal in the Middle East continue to shape trade flows. Freight and fuel costs have remained above pre-conflict levels. They actually increased in Q1 for us versus Q4, though they have now started to ease. The c [Showing first 8,000 characters — download PDF for full document]