Kesar Petroproducts FY26: Nine Months of Doubling, One Quarter of Undoing

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1. At a Glance

For nine months, Kesar Petroproducts read like a turnaround finally arriving. Through December, the pigments maker had stacked up ₹14.74 crore of profit — roughly double the same stretch a year earlier — on the back of a swing from crude to higher-margin pigments. Then the March quarter arrived and posted a net loss of ₹5.06 crore, dragging full-year FY26 profit to ₹9.68 crore, a shade below FY25’s ₹9.96 crore. A year that spent three quarters climbing spent its fourth quarter handing the gains back.

The full-year revenue barely moved: ₹187.22 crore against ₹185.17 crore. Operating profit for the year landed around ₹21 crore, yet the Q4 line alone turned negative at ₹1.12 crore operating and worse after a deferred-tax charge. The market currently pays about 20x earnings on the enlarged share base, close to the peer median.

The tension worth watching: a company that told investors Q4 would be “very strong” instead delivered its only loss quarter of the year. What does a 9M doubling mean when the year ends flat?

2. Introduction

Kesar Petroproducts was incorporated in 1990 and makes Phthalocyanine Blue Crude and its downstream pigments from a plant cluster at Lote Parshuram, in Maharashtra’s chemical belt. It holds roughly a 15% share of India’s copper phthalocyanine market and exports to about 55 countries.

The recent chapter has been busy. In April 2025 the board appointed Shreyas Sharma as CEO. In June 2025 Infomerics upgraded the bank-facility rating to IVR BBB/Stable from BBB-/Stable, citing improved scale and profitability. Through the year the company pushed a strategic shift — management’s phrase, repeated across calls, was moving “from a crude manufacturer” to “a pigment manufacturer,” with co-products like complex fertiliser layered on top. A large capital-work-in-progress balance sat on the books through FY25 and was capitalised during FY26, pushing net block from ₹63.94 crore to ₹134.95 crore.

Then came the tariff quarter. Management attributed Q4 weakness to US-India tariff developments that “created temporary pressures on volumes and markets,” delaying export orders — the CEO said so on the February call. That, plus higher depreciation and finance costs on the newly capitalised plant, is the backdrop to the loss.

3. Business Model: WTF Do They Even Do?

They turn copper and intermediates into blue. Specifically, CPC Crude Blue and its activated form feed downstream into Alpha Blue (15.0, 15.1), Beta Blue (15.3, 15.4) and Pigment Green 7. Per the FY25 mix on the investor presentation, CPC Crude was 45% of revenue and pigments 55% — which is the whole strategic story in two numbers, because management says crude margins run “around 1% to 2%” while pigment margins run “around 15% to 18%.” Selling more of the second and less of the first is the entire plan.

Geographically, FY25 revenue split roughly 60% exports and 40% domestic, with the export basket spread across South-East Asia, Europe, the USA and Latin America. End-uses run through paints, plastics, inks, rubber and textiles. Distribution leans on seven-to-eight distributors carrying 60% of sales, with the rest direct to manufacturers.

The newer wrinkle is co-products. The pigment process throws off by-products, and management’s argument — validated on the call — is that being able to handle those by-products is what lets you scale pigments in the first place. So they built a technical-grade complex fertiliser line (for drip irrigation, guided at 3,600 MTPA and ₹30–40 crore of potential revenue) and are planning a zinc phosphate plant later. There is also a leased-capacity arrangement: Kesar leases 1,500 MT/month of CPC Blue capacity from Shreyas Intermediates on a lease running more than twelve years, the CEO confirmed. A pigment maker, a fertiliser maker, and a tenant, all at once.

Does a ₹30–40 crore fertiliser line move the needle for a ₹187 crore company, or is it mostly a way to unclog the pigment plant’s drains?

4. Financials Overview

Figures are standalone, in ₹ crore.

Revenue actually grew both year-on-year and sequentially. Everything below the top line went the other way: operating profit flipped from ₹6.28 crore the prior quarter to negative ₹1.12 crore, and a deferred-tax charge of ₹2.21 crore deepened the reported loss to ₹5.06 crore. Per the audited filing, cost of materials consumed jumped sharply in the quarter even as sales rose — the figure sits in the results statement. Management framed the weakness as order deferrals