Sudarshan Chemical reports strong Q1 FY26 results, driven by integration strategy

Sudarshan Chemical Industries Limited reported total revenue of INR2,507 crores for Q1 FY26, including legacy Sudarshan, acquired Group, and Rieco businesses. This marks a substantial increase compared to the previous quarter due to the acquisition of Heubach Global Pigment business in March 2025. Legacy Sudarshan's standalone revenue was INR628 crores, a marginal 1% decrease, with an EBITDA of INR87 crores (13.9% margin). The acquired group's revenue ramped up to INR1,882 crores, an increase from INR525 crores post-deal closure in March 2025, with an EBITDA of INR78 crores (4.1%). The global pigment business, combining legacy Sudarshan and the acquired group, achieved INR2,456 crores in revenue and an adjusted EBITDA of INR165 crores (6.7%).

The company is on track to achieve its projected €35 million EBITDA for the acquired group in FY26 and aims for €90-100 million EBITDA by FY28-29, driven by cost reduction in manufacturing, procurement, and organizational restructuring. Integration costs for the current quarter stood at INR32.8 crores, with an anticipated total of €10 million plus for the year, excluding IT and organizational restructuring. Net debt increased to INR1,084 crores due to purchase consideration payments, with an average finance cost projected between 6.5% and 7.5%.

Despite a challenging market with low demand and high customer inventories leading to destocking, the company anticipates a return to normalized sales by December 2025. Sudarshan maintains a global manufacturing footprint across 19 sites in 11 countries, with 50% of production from Asia. The company's strategy focuses on customer centricity, agility, and optimizing its diverse product portfolio and manufacturing processes to enhance global competitiveness.