Ester Industries Limited (NSE: ESTER), a Gurugram-headquartered Indian manufacturer of polyester films, specialty polymers, and recycled polyethylene terephthalate (rPET), reported a mixed financial performance for the quarter and half year ended 30 September 2025. While growth in the polyester film segment remained under pressure from global tariffs and import competition, the specialty polymers business continued its upward trajectory, supported by protected intellectual property and strong volume growth.
On a consolidated basis, Ester Industries Limited posted revenue of ₹357 crore in Q2 FY26, reflecting a 7 percent increase over the same quarter in the previous year. However, EBITDA declined 59 percent year-on-year to ₹17 crore, and the quarter ended with a net loss of ₹16 crore compared to a profit of ₹3 crore in Q2 FY25. The downturn in profitability was attributed to soft margins in the polyester film business, adverse currency fluctuations, and mark-to-market losses on forward contracts and derivatives.
Despite this, the management remained optimistic about the company’s medium-term prospects, citing robust expansion in the specialty polymers vertical and rapid execution progress on its circular economy-focused ELITe project.
What is driving continued strength in Ester Industries’ specialty polymers division?
The specialty polymers business continued to deliver strong momentum in Q2 FY26, defying external trade pressures. The segment reported revenue of ₹57 crore, up 39 percent year-on-year, while EBIT rose 45 percent to ₹21 crore. Margins improved to 37.03 percent, marking a 146-basis-point gain over the prior year. The management credited this performance to resilient demand for IP-protected polymers used in performance-intensive applications and the absence of significant impact from U.S. tariffs that have otherwise affected other business segments.
Sales volume in the specialty polymer vertical grew 51 percent year-on-year. Ester Industries Limited reported that sales of its flagship product MB03 rose to 410 metric tonnes in Q2 FY26, up from 285 metric tonnes a year earlier. Other marquee polymer products also demonstrated strong traction, with volumes climbing from 476 to 649 metric tonnes.
This outperformance has helped the company partially offset margin compression in its core polyester film segment. Analysts covering Ester Industries Limited believe the specialty polymers division could emerge as the company’s growth engine, especially as it scales up production of value-added, IP-driven compounds.
How are US tariffs and imports impacting Ester Industries’ polyester film business?
Ester Industries Limited continued to experience volume growth in its polyester film business during the second quarter of FY26. Film sales volumes grew 9 percent year-on-year to 21,329 metric tonnes, and overall capacity utilization improved from 64 percent to 79 percent. The Hyderabad plant operated at 85 percent utilization during the quarter, while the Khatima plant achieved 75 percent.
Despite these positive operating metrics, the segment remained under severe pricing pressure. The company cited import competition in the domestic market and weakened international realizations due to the ongoing impact of United States trade tariffs as key margin headwinds. Revenue for the polyester films and chips segment grew just 2 percent year-on-year, and the margin compression weighed heavily on consolidated profitability.
To address these headwinds, the Directorate General of Trade Remedies (DGTR) has initiated an anti-dumping duty investigation targeting polyester film imports from Bangladesh, China, Thailand, and the United States. A favorable ruling could provide a structural margin buffer for domestic manufacturers like Ester Industries Limited in upcoming quarters.
In parallel, the company is leaning into its sustainability strategy. Sales of rPET products jumped 219 percent year-on-year to 1,046 metric tonnes. Ester Industries Limited has also expanded its recycled polyester chip business, with revenue from this product line rising sharply to ₹20.29 crore in Q2 FY26 from just ₹0.14 crore in the prior-year quarter.
What progress has been made on Ester’s circular economy project with Loop Industries?
One of the most strategic growth bets for Ester Industries Limited is its ELITe recycling initiative in partnership with Loop Industries, Inc. The project, which aims to commercialize Loop’s Infinite Loop™ technology for producing fully recycled, virgin-quality polyester resins, is on track for commissioning by December 2027.
During the second quarter, the company completed a key land acquisition for the project. Ester Industries Limited entered into an agreement to purchase approximately 90 acres of land in Gujarat’s PCPIR zone. The location offers logistical advantages, including access to polyester textile waste, a skilled labor pool, and a deep-water seaport for exports.
In terms of market visibility, the project has already attracted global offtake interest. Ester Industries Limited signed a multi-year agreement with Nike, making the U.S.-based athletic giant the anchor customer for the Infinite Loop India facility. Under this contract, Ester will supply Nike with branded Twist polyester resin, derived entirely from textile waste and traceable through Loop’s proprietary chemical tracer technology.
Additional offtake agreements were also signed during the quarter. Italian plastics company Taro Plast S.p.A. will receive recycled polyester intermediates and Loop DMT for use in automotive and specialty polymer applications. South Korea’s Hyosung TNC has also entered a strategic alliance with Ester Industries Limited to convert the Twist resin into Regen branded yarns for performance apparel.
Management emphasized that these early-stage agreements validate the commercial demand for recycled and traceable polyester products well ahead of the project’s commissioning. Analysts believe the project will play a critical role in shifting Ester Industries Limited’s product mix toward circular economy themes while strengthening its global customer pipeline.
What are investors watching in Ester Industries’ second-half trajectory?
From an investor perspective, Ester Industries Limited presents a bifurcated story in the near term. The polyester film segment continues to face margin pressure, and recovery will hinge on the outcome of the anti-dumping investigation and stabilization in global trade dynamics. Margins remain vulnerable in the absence of regulatory support or improvement in demand–supply balance in overseas markets.
At the same time, the specialty polymers business offers a structurally higher-margin profile, supported by strong demand, IP protection, and growing applications across sectors. The segment has proven resilient to macroeconomic volatility and could see further scaling through new customer engagements.
The ELITe project also serves as a medium- to long-term catalyst, especially as more offtake agreements are announced and capital expenditure progresses. Analysts tracking Ester Industries Limited expect the project to materially expand the company’s revenue base and position it as a global supplier of circular polyester materials.
While the consolidated results for Q2 FY26 indicate near-term headwinds, the company’s pivot to value-added, sustainability-linked, and protected product segments provides visibility into a more stable growth runway. Investors will closely monitor further updates around the ELITe project, specialty polymer performance in Q3 FY26, and any developments in the trade remedy case.
What are the key takeaways from Ester Industries’ Q2 FY26 earnings and strategic outlook?
- Ester Industries Limited reported consolidated revenue of ₹357 crore in Q2 FY26, up 7% year-on-year, despite continued margin pressure in the polyester film segment.
- EBITDA dropped 59% to ₹17 crore, with a net loss of ₹16 crore, driven by lower film margins and adverse forex/derivative impacts.
- Specialty polymer segment delivered robust growth, with revenue rising 39% and EBIT growing 45% year-on-year; margins expanded to 37.03%.
- Sales volume of specialty polymers surged 51% year-on-year, with key products like MB03 and other marquee polymers showing strong traction.
- Polyester film volumes increased 9%, and recycled PET (rPET) volumes jumped 219%, supporting the company’s sustainability push.
- Revenue from chips rose sharply to ₹20.29 crore, reflecting improved performance in adjacent value-added segments.
- The Directorate General of Trade Remedies initiated an anti-dumping probe into film imports from China, USA, Thailand, and Bangladesh, which could aid domestic pricing recovery.
- ELITe project progressed with 90-acre land acquisition in Gujarat and multi-year offtake agreements with Nike, Taro Plast, and Hyosung TNC.
- The Infinite Loop India facility will supply fully traceable, recycled polyester resins to global brands, reinforcing Ester’s pivot to circular economy.
- Investors are expected to track polymer margin strength, anti-dumping duty developments, and additional ELITe commercial announcements in H2 FY26.
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