GRP navigates Q2 challenges, projects stronger H2 and FY27

GRP Limited reported a Q2 FY26 total income of INR1,331 million, a nominal 1% year-on-year growth, with gross profit at INR680 million, also up 1%. However, volumes dropped due to geopolitical uncertainties and U.S. tariffs, which led to a 5% impact on reclaim rubber volumes from U.S.-linked customers, resulting in a INR6.2 crore reduction in revenue and a 36% margin reduction from these markets. EBITDA for Q2 FY26 stood at INR114 million, a 13% increase year-on-year, but profit after tax declined by 22% to INR20 million.

For H1 FY26, total income was flat at INR2,578 million, with gross profit down 3% to INR1,304 million. EBITDA for H1 FY26 was INR222 million, and profit after tax was INR37 million. The company is progressing with its INR250 crore capex, with INR72 crores already deployed towards green energy businesses (crumb rubber, pyrolysis, recovered carbon black) and INR22 crores for reclaim rubber technology. The remaining INR56 crores for Phase 1 are expected to be deployed by May/June 2026.

Despite short-term challenges, including the decision to discontinue the Polymer Composite business, GRP remains confident in its long-term story, driven by operational excellence and strategic execution. The company projects H2 FY26 to be significantly better than H1, with an expected 200-250 basis points improvement in EBITDA margins, and anticipates a significant breakout in revenue and profitability for FY27.