Higher costs and lower caustic soda realisations cut Lords Chloro profit
Standalone revenue rose 8.51% sequentially, but faster expense growth and a higher tax rate drove a 39.67% decline in net profit.
Filed 03 Nov 2026, 18:01 IST · after market close · Lords Chloro Alkali Ltd (LORDSCHLO)
Key takeaways
- Standalone revenue grew 8.51% sequentially, but expenses rose 15.46%, narrowing operating margin by 5.05 percentage points.
- Net profit fell 39.67% sequentially as the tax rate rose 15.28 percentage points and interest expense increased 13.22%.
- Operating margin of 16.21% remained 2.03 percentage points above the 14.18% median for 92 reported commodity-sector peers.
Price around the results
Revenue growth did not convert into operating profit
Lords Chloro Alkali’s standalone revenue increased 8.51% sequentially to Rs 115.4 cr, while operating profit declined 17.25% to Rs 18.71 cr. Expenses grew 15.46%, faster than revenue, reducing operating margin from 21.26% to 16.21%. Management said caustic soda realisations moderated during the quarter and weighed on operating profitability.
Tax and interest amplified the profit decline
Profit before tax fell 27.69% sequentially as operating profit weakened and interest expense rose 13.22%; depreciation also increased 4.37%. Net profit declined 39.67% to Rs 9.02 cr, with the tax rate rising from 8.18% to 23.46%, a 15.28-percentage-point increase. Other income contributed only 0.93% of pre-tax profit, so it did not materially support earnings.
Margin remains above the commodity-sector median
The 16.21% operating margin was 2.03 percentage points above the 14.18% median among 92 commodity-sector peers that had reported the quarter. The available quarterly trend shows a sequential margin decline from 21.26% in Q1FY27 to 16.21% in Q2FY27, rather than a multi-quarter pattern.
Expansion and renewable capacity remain central to the plan
Management said caustic soda lye sales volumes grew 9.24% year on year and CPW volumes grew 40.38%, even as caustic soda realisations weakened. The company said it commissioned a 14.5 MW AC captive solar plant with battery storage during the quarter, taking captive and group-captive renewable capacity to 47 MW DC. Management also said its FY24-FY28 capex plan totals Rs 315 cr and that installed capacity is expected to reach 360 TPD alongside a 10 MW group captive plant.
Results were filed after the market close
The company filed these standalone results after market close on 3 November 2026. No post-results share-price reaction is covered here.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹115 cr | ₹106 cr | +8.51% |
| Other income | ₹0 cr | ₹0 cr | -50.00% |
| Expenses | ₹97 cr | ₹84 cr | +15.46% |
| Operating profit | ₹19 cr | ₹23 cr | -17.25% |
| Operating margin (%) | 16.21% | 21.26% | — |
| Interest | ₹3 cr | ₹2 cr | +13.22% |
| Depreciation | ₹4 cr | ₹4 cr | +4.37% |
| Profit before tax | ₹12 cr | ₹16 cr | -27.69% |
| Tax | ₹3 cr | ₹1 cr | +107.52% |
| Net profit | ₹9 cr | ₹15 cr | -39.67% |
| EPS (₹) | ₹3.15 | ₹5.22 | -39.66% |
Operating margin of 16.21% compares with a Commodities sector median of 14.18% across 92 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Caustic soda lye sales volumes grew 9.24% year-on-year and CPW sales volumes grew 40.38%.
- The company commissioned a captive solar plant and BESS during the quarter, taking renewable capacity to 47 MW DC.
Guidance & outlook
- The company expects CPW to contribute to revenues over the next 2-3 years.
Expansion
- The company plans total capex of Rs. 315 crore across FY24-FY28 for capacity expansion, renewable energy and downstream diversification.
- The company expects total installed capacity to reach 360 TPD after expansion, with a 10 MW group captive plant.
- The company commissioned a 14.5 MW AC, or 21 MW DC, captive solar power plant with a battery storage system at Bikaner.
New initiatives
- The company is focusing on optimising plant efficiencies, operational reliability and cost discipline.
Competition
- The company is among the few North India-based players and has total capacity of about 300 TPD.
- Freight economics discourage imports from Gujarat, which the company says protects its pricing power.
Problems & risks
- Increased grid electricity rates in October 2025 created a setback for the company's energy cost transformation.
- Lower caustic soda realisations impacted operating profitability during the quarter.
- Caustic soda realisations moderated during the quarter.
What to watch
- Whether operating margin holds above 16.21% after the 5.05-percentage-point sequential decline.
- Whether expenses continue to grow faster than revenue after rising 15.46% versus revenue growth of 8.51%.
- Whether the tax rate moves down from 23.46% and interest expense moderates from its 13.22% sequential increase.