Gandhar Oil hits 126% capacity, forcing a U-turn on capex plans
Management is abandoning its pause on spending to fund a new Taloja expansion after reporting a 64% jump in annual profit.
— 2 earlier stories on Gandhar Oil Refinery (India) Ltd. →What's new
- Gandhar is reversing its capex pause to fund a new expansion in Taloja.
- Full-year net profit rose 64% to ₹137.2 crore.
- Management targets EBITDA margins above 6%, up from the current 5.53%.
Why this matters
Running at 126% capacity is a clear signal of demand outstripping supply. The decision to immediately pivot back to capex suggests management sees this volume growth as sustainable rather than a temporary spike.
What we're watching
- The timeline for the Taloja plant expansion.
- Whether the shift to specialty products successfully lifts margins above 6%.
- Further updates on raw material sourcing as Middle East disruptions persist.
The full read
Gandhar Oil is running its Indian plants at 126% of capacity. This operational bottleneck has forced management to abandon its earlier commitment to pause capital expenditure.
It is a massive pivot.
The company has acquired land in Taloja and is finalizing a two-year expansion plan to meet demand. This strategic shift follows a strong fiscal year, where net profit climbed 64% to ₹137.2 crore. Management is now focused on lifting EBITDA margins above 6% from the current 5.53% by shifting the product mix toward higher-margin specialty offerings. To manage ongoing geopolitical disruptions in the Middle East, the company has also restructured its raw material sourcing. For a company with a market cap of ₹1,578 crore, the move to prioritize growth over a capital pause is a clear bet on sustained demand that leaves little room for error.
Questions answered
- Why is Gandhar Oil resuming capital expenditure?
- The company's Indian plants are operating at 126% of capacity. Management decided that current demand levels necessitate an immediate expansion.
- What is the plan for the Taloja site?
- Gandhar has acquired land in Taloja and is currently finalizing a two-year capex plan to expand production capacity there.
- How does the company plan to improve its margins?
- Management is targeting an EBITDA margin above 6%, up from the current 5.53%. They intend to reach this by increasing the sales mix of higher-margin specialty products.
- How did the company perform in the last fiscal year?
- Gandhar reported a 64% increase in full-year net profit, reaching ₹137.2 crore.
- Is the company affected by Middle East geopolitical issues?
- Yes, management noted that disruptions in the region forced them to restructure their raw material sourcing strategy.
Story so far
All notes on GANDHAR →- 27 May 2026 · 12:14 PM IST Gandhar Oil hits 126% capacity, forcing a U-turn on capex plans
- today Gandhar Oil profit jumps 201% in Q4 as margins widen
- today Gandhar Oil profit jumps 71% as board greenlights South Africa expansion