India’s dyes and pigments (D&P) industry, including dye intermediates, has sustained its recovery momentum in fiscal 2025 (FY25), led by volume-driven growth and margin expansion, aligning with CareEdge Ratings expectations.
Leading players reported topline growth of over 10 per cent, supported by a 110-basis-point improvement in Profit Before Interest, Lease, Depreciation & Tax (PBILDT) margins, primarily due to stronger gross profit margins. This performance broadly tracked CareEdge Ratings’ October 29, 2024 projection of around 10 per cent topline growth and a 150–200 bps margin expansion.
Looking ahead, the outlook for FY26 remains challenging. D&P industry is expected to contract by 5–7 per cent, driven mainly by weaker exports, even as domestic demand continues to offer support, CareEdge Ratings said.
During the first half (H1) of FY26, exports declined by over 5 per cent year on year, impacted by lower textile output in China and Turkiye, expansion of local dye manufacturing in several textile-producing countries, availability of low-cost Chinese dyes in global markets, inventory destocking by end users anticipating price corrections, and deliberate volume cuts by Indian exporters to protect margins.
Export pressures are expected to intensify in H2FY26 following the imposition of US tariffs on certain D&P products. Exports in the second half are projected to contract by around 10 per cent over H1FY26, taking the overall FY26 export volume decline to approximately 12 per cent year on year. This weakness is expected to be partially offset by steady domestic demand, while PBILDT margins are likely to remain stable, aided by softer raw material prices.
The solvency position of the D&P sector is expected to stay comfortable in FY26, with no major debt-funded capital expenditure plans anticipated.
ALCHEMPro News Desk (HU)
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