Lords Chloro Alkali Ltd

Financial performance

• Revenue from operations rose to ₹39,013.70 lakh, up from ₹27,022.23 lakh.
• EBITDA rose to ₹66.38 crore.
• Profit after tax stood at ₹28.49 crore.
• Net profit margin improved to 7.30% (FY25: 2.29%).
• Dividend not declared in FY2025-26.

Capacity & operations

• Caustic Soda capacity 300 TPD; target 360 TPD by FY27.
• CPW capacity expansion to 100 TPD by FY27.
• Downstream CPW expansion strengthens product mix.

Renewable energy & ESG

• 16 MW captive solar plant commissioned.
• Plan to add 21 MW solar expansion; target 40-50% renewables.
• Total renewable energy mix target 40-50%.

Capital structure & liquidity

• Total borrowings ₹16,195.38 lakh; long-term ₹9,637.05 lakh; current ₹6,558.35 lakh.
• Cash and cash equivalents ₹2,943.08 lakh; total cash ₹29.43 crore.
• 35 lakh warrants converted; issued capital now ₹28.66 crore.
• ICRA rating BBB+ (Stable) assigned.

Governance & remuneration

• MD Ajay Virmani fixed remuneration ₹2.40 crore; incentives 4% of EBDT above ₹10 crore.
• Madhav Dhir fixed remuneration ₹2.40 crore; 25% rent-free accommodation.
• ESOP Scheme 2026 up to 10 lakh options; NRC to administer.
• Remuneration approvals: MD reappointed; Srishti Dhir reappointed; Sandeep Singh 2nd term.

Audits & compliance

• Auditor notes shortfall of 97.5 lakh OA units; Rs 215 lakh recognized.
• RIICO tax dispute: Jaipur High Court order in 2026; interest ₹50.88 lakh paid.
• IFSTL ₹11.64 lakh payable to IEPF; reconciliation pending.

CSR & related party

• CSR spend ₹58.06 lakh; minimum ₹49.89 lakh; excess ₹8.17 lakh carried forward.
• Cirrus Chemicals sold hydrogen gas ₹413.77 lakh.
• Related party transactions largely in ordinary course; arm's length.

Market & risk outlook

• India caustic soda market shows positive growth; expansion poised to improve margins.
• Key risks include energy price volatility and import competition.

AGM Details

• AGM date/time: 11 September 2026 at 11:30 AM, physical at registered office.
• Book closure: 5–11 September 2026.
• EV voting cut-off: 4 September 2026.
• Remote e-voting: 7–10 September 2026.
• Notice and annual report available on company website.

Ordinary Business

• Adoption of Audited Financial Statements for year ended 31 March 2026.
• Reappointment of Ms. Srishti Dhir as Director (retiring by rotation).
• Reappointment of M/s Nemani Garg Agarwal & Co. as Statutory Auditors.

Special Businesses

• Ratify remuneration of Cost Auditors for 2026-27.
• Remuneration to Ajay Virmani as Managing Director fixed Rs 2.40 crore per annum.
• Remuneration to Madhav Dhir as Whole Time Director fixed Rs 2.40 crore per annum.
• Remuneration to Deepak Mathur as Whole Time Director up to Rs 1 crore per annum.
• Increase borrowing limit under section 180(1)(c) to Rs 500 crore.
• Creation/modification of mortgage/charge to secure borrowings up to Rs 500 crore.
• Increase in limit of managerial remuneration payable to Directors.
• Approval for Lords Chloro Alkali Employee Stock Option Scheme-2026.

Dividend Status

• Dividend for 2025-26 was not declared.

Auditors & Remuneration

• Statutory Auditor: reappointment for 5 years (2026-2031) with remuneration Rs 5 lakh per annum plus out-of-pocket expenses.
• Cost Auditor: remuneration for 2026-27 Rs 75,000; ratification sought.

Material Related Party Transactions

• Related party Cirrus Chemicals Private Limited; sale of hydrogen gas; Rs 413.77 Lakhs; 10-year term.

ESOP Scheme 2026

• Approval of Lords Chloro Alkali Employee Stock Option Scheme-2026.
• Not more than 10,00,000 options may be granted; exercisable into equal shares.
• Administered by Nomination & Remuneration Committee; direct issue from company.
• Vesting: minimum 1 year, maximum 3 years.
• Exercise price linked to market price; cannot exceed market price; no lock-in.
• Schemes to be implemented via fresh allotment from the company.

Business Overview

• LCAL is a North India caustic soda and downstream chemicals producer transitioning to green chemistry.
• Strategy focuses on solar integration and CPW downstream to stabilize chlorine absorption and margins.

Operational Highlights

• Caustic soda capacity up from 210 to 300 TPD, ~80% utilization.
• CPW capacity up from 20 to 50 TPD; expansion to 100 TPD by FY27 end.
• 16 MW solar plant commissioned; 10 MW hybrid plant; 21 MW solar project planned.
• Total capex plan of Rs 315 crore for FY24-28; Rs 150 crore completed; Rs 165 crore ongoing.

Financial Performance

• Q1 FY27 total income Rs 106.56 crore; EBITDA Rs 22.83 crore; PAT Rs 14.96 crore; EBITDA margin 21.42%.
• FY26 full-year: total income Rs 393.10 crore; EBITDA Rs 66.38 crore; PAT Rs 28.49 crore; EBITDA margin 16.89%.
• YoY revenue growth driven by higher volumes and realizations; best operating profits in LCAL history.

Capital Structure & Liquidity

• Debt-to-equity stands at 0.67 as on March 2026.
• Capex funded through internal accruals and debt; balance sheet strength maintained.

Strategic Priorities & Outlook

• Renewable energy target: 40-45% in short term; 80% in medium term.
• Downstream diversification via CPW to improve chlorine absorption and margins.
• Expanded capacity and renewed energy mix to strengthen competitive position.

Risks & Mitigation

• Energy costs are a major component; renewables reduce exposure, grid-rate increases mitigated by captive power.
• CPW integration stabilizes chlorine absorption and caustic soda production.

Governance & Leadership

• Management team includes Ajay Virmani (MD), Madhav Dhir (Executive Director), and Deepak Mathur (Technical Director).

Financial highlights (Q1 FY27)

• Total Income Rs 106.34 crore, up 6.13% YoY.
• EBITDA Rs 22.83 crore; margin 21.42%.
• PAT Rs 14.96 crore; up 43.16% YoY.
• Volume CSL: 106.56 MT in Q1 FY27.
• Highest-ever quarterly Total Income, EBITDA and PAT reported.

Outlook and strategy

• Optimistic demand outlook for chloro-alkali industry.
• Focus on operational excellence and timely execution of growth initiatives.
• Disciplined capital allocation and downstream value addition emphasized.
• Expansion projects on track with financial discipline.

Capacity and assets

• Installed capacity: 300 MT/day Caustic Soda; CPW 50 TPD.
• Solar park of 16 MW and a 10 MW hybrid captive project.

Management changes

• Remuneration approved for Ajay Virmani as MD to be paid from 1 Apr 2027, subject to AGM approval.
• Remuneration approved for Madhav Dhir as WTD from 1 Apr 2027, subject to AGM approval.
• Re-appointment: Deepak Mathur as WTD for 3 years (19 Feb 2027–18 Feb 2030), subject to AGM.
• Increase in the limit of managerial remuneration payable to MD, WTDs and Directors, subject to AGM.
• Change in RTA: Alankit to Beetal; effective date to be intimated; Alankit to continue through data transition.
• Borrowing limit increased up to Rs 500 crore, subject to AGM.
• Creation/Modification of Mortgage/Charge upto Rs 500 crore, subject to AGM.
• ESOP Scheme 2026: up to 10,00,000 options; administered by Nomination and Remuneration Committee; direct route.
• Appointment of Corporate Professionals Capital Private Limited as Merchant Banker for ESOP implementation till in-principle stock-exchange approval.
• Board approved Board's Report, Corporate Governance Report, MD&A for FY ended 31 Mar 2026.
• Notice for 47th AGM to be convened on 11 Sep 2026.

Financial results

• Unaudited standalone Q1 FY2026-27 results for quarter ended 30 June 2026 approved; Limited Review Report included.

Remuneration and appointments

• Remuneration for MD Ajay Virmani approved w.e.f. 1 Apr 2027, subject to AGM member approval.
• Remuneration for WTD Madhav Dhir approved w.e.f. 1 Apr 2027, subject to AGM member approval.
• Re-appointment of Deepak Mathur as Whole Time Director for 3 years from 19 Feb 2027; subject to AGM.

Capital management and collateral

• Increase in managerial remuneration limit payable to MD/WTDs/Directors approved; subject to AGM approval.
• Borrowing limit increased to Rs 500 crore; subject to AGM approval.
• Creation/Modification of Mortgage/Charge up to Rs 500 crore; subject to AGM approval.

RTA and investor services

• RTA changed from Alankit to Beetal; transition in progress.

Employee stock option scheme

• ESOP Scheme 2026 approved; up to 1,000,000 options; administered by NRC; via direct allotment.

Strategic advisory support

• Appointed M/s Corporate Professionals Capital Private Limited as merchant banker for ESOP implementation.

Governance and AGM

• Board approved Board Report, Corporate Governance Report, MD&A and annexures for FY ended 31 Mar 2026.
• AGM scheduled for 11 September 2026.

Regulatory disclosures and auditor remarks

• Disclosure under Regulation 30 accompanying notices.
• Independent Auditor's Limited Review: no material misstatement identified.

Dematerialisation status and certificate actions

• The securities comprised in the said certificate(s) have been listed on the Stock Exchanges.
• The said certificates were mutilated and cancelled after verification, with depository name substituted as registered owner.

FY26 results

• Total income rose 44.62% year-on-year to INR393.1 crores.
• PAT rose 360.9% year-on-year to INR28.49 crores.
• EBITDA rose 159% year-on-year to INR66.38 crores.
• EBITDA margin expanded 747 bps to 16.89%.
• Caustic soda volume rose 29.7% to 84,690 metric tons.
• Q4 FY26 total income was INR97.75 crores, up 22.3% year-on-year.
• Q4 FY26 PAT was INR4.39 crores, up 68.64% year-on-year.
• Q4 FY26 EBITDA margin was 14.03%, down from Q3's 20% plus.

Operations and capex

• Q4 caustic soda volume was 20,935 metric tons, up 8.72% year-on-year.
• Chlorinated paraffin wax contributed meaningfully to Q4 revenue.
• Power and fuel costs rose after October 2025 grid tariff revision.
• A 21-megawatt solar plant is expected to commission around mid-June 2026.
• Captive renewable capacity will rise to 37 MW plus 10 MW group captive.
• Renewables should cover 40% to 45% of total power requirements.
• Power and fuel cost share fell from 61% in FY25 to about 42% in FY26.
• Total capex outlay of INR315 crores for FY24 to FY27-28 remains on track.
• Post-expansion installed capacity will be 360 tons per day.
• Debt-to-equity ratio was approximately 0.67x; shareholders' funds were INR242.52 crores.

Q&A Highlights

• Analysts asked about 97 lakh units of shortfall from the captive power project; management said the project is now completing in phases.
• Analysts asked whether power expense credits would reverse; management said no, as it follows the agreements.
• Analysts asked about near-term growth with high utilization; management said utilization should stay around 80% to 85%.
• Analysts asked why sulfuric acid capex was deferred; management said sulfur volatility and war-related uncertainty delayed it.
• Analysts asked why caustic prices moved after the war spike; management said prices remain 12% to 15% above pre-war levels.
• Analysts asked about export-to-domestic supply shifts; management said European orders are coming back and no excess supply is seen.
• Analysts asked why Q4 margins compressed sequentially; management cited lower caustic prices and an electrolyzer shutdown for renovation.
• Analysts asked about renewable investment beyond current capex; management said it is evaluating opportunities under new cell regulations.
• Analysts asked about blended power cost after solar commissioning; management said grid power costs INR8.2 to INR8.3 per unit.
• Analysts asked about North India capacity and pricing; management said North market is 1,600 TPD and no new capacity is announced.

Business mix

• Management described the company as a green, efficient, scalable chemical company.
• Caustic soda demand came from aluminum, paper, textiles, and pharmaceuticals.
• North India freight economics were cited as a structural advantage.
• CPW converts chlorine byproduct into a downstream product, improving mix stability.
• Management said India has become a net exporter of caustic soda.