Hi-Green Carbon's profit fell 69% even as revenue grew 42%
A one-time fire loss and new depreciation wiped out the bottom line. Syngas bottling is weeks from launch, but near-term margins will dip during a plant ramp-up.
What's new
- FY26 revenue grew 42% to Rs 141 crore, but net profit plunged 69% to Rs 3.43 crore.
- The profit hit came from a one-time fire loss at subsidiary Samsara and higher depreciation from new plants.
- EBITDA margins compressed to 18.3% as crude-linked TPO pricing created headwinds.
Why this matters
Hi-Green's topline growth is fast, but profitability is being sacrificed for expansion. The fire loss is a one-off, but the margin pressure from crude-linked pricing and new depreciation is a more persistent problem. The company is now betting its future on syngas, but must prove it can scale without destroying more margin.
What we're watching
- The launch of captive electricity generation from syngas, targeted for weeks from now.
- Whether the new Dhar plant can ramp up to full utilization from the current 70% dip.
- Execution on the syngas bottling revenue target of Rs 4-5 crore in H2 FY27.
The full read
Hi-Green Carbon's FY26 is a split story. Revenue surged 42% to Rs 141 crore as processing volumes of waste tires jumped 48% to over 36,000 MT. But net profit cratered 69% to just Rs 3.43 crore. A one-time fire loss at subsidiary Samsara and depreciation from new plant additions explain the gap. The margin squeeze is real: EBITDA margins fell to 18.3% as crude-linked TPO pricing pressured the business. Management is pointing to the future, with captive electricity generation from syngas expected to begin within weeks and syngas bottling targeted to add Rs 4-5 crore in H2 FY27. The guidance is for 30-40% annual revenue growth and a 20-25% EBITDA margin. The immediate challenge is integrating the new Dhar plant, which will dip utilization to 70%. The open question is whether the syngas revenue can offset the near-term margin dilution from expansion.
Questions answered
- Why did Hi-Green Carbon's profit fall so sharply when revenue was up?
- The profit decline was caused by two factors: a one-time fire loss at its subsidiary Samsara and higher depreciation charges from newly commissioned plants. The underlying revenue growth was strong, but these items hit the bottom line directly.
- What is the new growth driver Hi-Green is about to launch?
- The company is nearing commercialization of syngas bottling and expects to start generating captive electricity from syngas within weeks. It is targeting Rs 4-5 crore in revenue from syngas bottling in H2 FY27.
- What is the profit margin outlook?
- Management is guiding for a 20-25% EBITDA margin range, but in the near term, margins are under pressure from crude-linked TPO pricing. The current EBITDA margin stood at 18.3% for FY26.
- How is the capacity expansion affecting operations?
- The new Dhar plant is ramping up, which is expected to temporarily dip plant utilization to 70%. This is a near-term operational drag while the company integrates the new capacity.