Acquired Group EBITDA Loss
€38M
N/A
Acquired group reported a loss of €38 million in Q3, compared to a profit of €78 million in Q1.
SUDARSHANCHEMICAL
Manufacturing
10 Feb 2026
Sudarshan Chemical Industries Ltd — Q3 FY26
Sudarshan Chemical reported a tough Q3 FY26, with the acquired Heubach/Clariant business posting a €38 million EBITDA loss, driven by customer destocking and weak demand in Europe and North America.
✓ Verified against BSE filing
2-Min Summary
Sudarshan Chemical reported a tough Q3 FY26, with the acquired Heubach/Clariant business posting a €38 million EBITDA loss, driven by customer destocking and weak demand in Europe and North America. Legacy Sudarshan revenues were flattish. Management highlighted that customer trust has been rebuilt and buying has resumed in January/February, expecting a €9-10 million business EBITDA in Q4. However, a planned inventory reduction of €30-40 million over three quarters will temporarily depress reported EBITDA by €9-12 million due to overhead absorption. The long-term target of €90-100 million EBITDA remains intact, but near-term risks include slower-than-expected demand recovery and execution challenges in cost synergies.
Key Numbers
Cost Savings Realized
₹40 Cr
N/A
₹40 crore of cost savings realized in Q3 vs Q1, with a healthy pipeline ahead.
Inventory Reduction Target
€30-40M
N/A
Management targets reducing inventory by €30-40 million over the next three quarters.
Employee Cost Reduction
€25M
N/A
Employee costs reduced by €25 million in Q3 vs Q1, part of fixed cost optimization.
Management Guidance
Q4 FY26 Business EBITDA of €9-10 million
Management expects business EBITDA (excluding inventory impact) of €9-10 million in Q4 FY26, driven by demand recovery and cost actions.
marginsInventory reduction of €30-40 million over three quarters
Plan to reduce finished goods inventory by €30-40 million over the next three quarters, improving cash flow but temporarily reducing reported EBITDA by €9-12 million.
otherLong-term EBITDA target of €90-100 million
Management reiterated the 3-4 year target of delivering €90-100 million EBITDA, assuming normal market conditions and full synergy realization.
marginsOne SAP system by December 2026
Harmonization of four SAP systems into one by December 2026 to improve productivity and reduce costs.
otherKey Risks
Slower-than-expected demand recovery
Customer destocking may persist longer than anticipated, delaying volume recovery and impacting Q4 guidance.
high · analyst_questionInventory reduction impact on reported EBITDA
Planned inventory reduction will temporarily depress reported EBITDA by €9-12 million, which may surprise investors.
medium · management_commentaryHigh fixed cost base in acquired business
The acquired group has a high fixed cost structure, making EBITDA highly sensitive to volume fluctuations.
high · analyst_questionEU-India trade deal uncertainty
Potential EU-India trade deal may take 10-12 months to implement, with no immediate benefit; global footprint provides flexibility.
low · management_commentaryNotable Quotes
We expect a 9 to 10 million of a business EBITDA right however we are in a mode now to start reducing our inventories... and that would have an impact on our EBITDA going forward but it will have a very positive impact on cash flow.
The customers promised that they would start buying after January and we are seeing that already in January and early February.
Our target in the next three quarters is to reduce our inventory in the range of 30 to 40 million.