Top Chemical Firms Deliver PAT Margins Above Four-Quarter Average

The chemical sector delivered a strong profitability performance in Q2 FY26, with several leading companies reporting PAT (Profit After Tax) margins that surpassed their four-quarter averages. After facing sluggish demand, volatile input costs, and supply-chain pressures in previous quarters, the sector is now witnessing a gradual recovery supported by improved demand visibility, stabilizing commodity prices, and a healthier inventory cycle.

Across the specialty chemicals and fluorochemicals space, most companies recorded meaningful margin expansion, reflecting operational discipline, product mix optimisation, and improved capacity utilisation.

Top Companies Leading Q2 FY26 PAT Margin Outperformance

1. Navin Fluorine – Strongest Margin Expansion

• Q2 FY26 PAT Margin: 19.56%
  
  
• Four-Quarter Average: 13.71%
  
  

Navin Fluorine topped the list with the widest margin of deviation from its historical average.
This outperformance was driven by:

• Better mix contribution from high-value fluorochemicals
  
  
• Operational improvements
  
  
• Ramp-up in differentiated product offerings
  
  

The company continues to gain from its presence in high-growth end-user industries such as pharma, agrochemicals, and specialty materials.

2. Pidilite Industries – Resilient Consumer Demand Supports Growth

• Q2 FY26 PAT Margin: 16.46%
  
  
• Four-Quarter Average: 16.25%
  
  

Pidilite’s margin remained above its long-term average, reflecting:

• Consistent adhesive and construction chemical segment performance
  
  
• Stable raw material costs
  
  
• Sustained demand from home improvement and repairs
  
  

The company continues to benefit from its substantial brand equity and wide distribution network.

3. Gujarat Fluorochemicals (GFC) – High-Value Polymers Power Margin Gains

• Q2 FY26 PAT Margin: 14.79%
  
  
• Four-Quarter Average: 12.78%
  
  

GFC posted a solid margin increase supported by:

• Growth in fluoropolymers
  
  
• Improved global demand for specialty materials
  
  
• Strong contribution from new product categories
  
  

The company’s shift toward higher-margin products is gradually improving its profitability profile.

4. Atul Ltd & 6. SRF Ltd – Sector-Wide Recovery Visible

While Atul and SRF reported comparatively lower margins of:

• Atul: 11.68% vs. 8.88% average
  
  
• SRF: 10.66% vs. 9.29% average
  
  

Their performance still highlights:

• Improving fundamentals across agrochemicals and specialty chemicals
  
  
• Better inventory management
  
  
• Stabilizing domestic and global demand
  
  

Both companies exceeded their historical averages, indicating that the broader chemical sector is transitioning into a recovery phase.

Key Drivers Behind Margin Improvement in Q2 FY26

The chemical industry benefited from a combination of supportive factors:

• Stable raw material costs, especially crude-linked derivatives
  
  
• Normalizing global supply chains, reducing logistics disruptions
  
  
• Recovery in China, improving pricing and demand stability
  
  
• Steady agrochemicals cycle in Latin America
  
  
• Increased traction in specialty segments, including fluoropolymers, adhesives, and performance materials
  
  

These tailwinds collectively supported margin expansion across the sector.

Outlook for the Coming Quarters

Industry commentary suggests that profitability momentum may continue into the upcoming quarters, supported by:

• Easing input inflation
  
  
• Demand pickup in export markets
  
  
• Shift toward value-added product portfolios
  
  
• Rising industrial and infrastructure activity
  
  

If global macro conditions remain stable, the Indian chemical sector is well positioned to deliver sustained margin improvement through FY26.