Goa Carbon: Supreme Court hearing on petcoke ban a key risk event

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26 Aug, 2025 12:21

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Anubhav SahuMoneycontrol Research

Goa Carbon, the second largest manufacturer of calcined petroleum coke (CPC) in India, delivered a weak set of Q2 FY19 earnings on account of a plant shutdown caused by unavailability of petcoke. On July 26, the Supreme Court ordered a ban on import and use of petcoke as fuel, exempting only a few industries. On account of this, capacity utilisation, order inflow and margin have been impacted. The management is hopeful of gaining exemption for the calcination industry, but this would be clarified at the October 9 hearing.

Weak Q2 FY19 earnings

Source: Company

Sales contracted 25 percent year-on-year (YoY) and 9 percent sequentially to Rs 113 crore. Operations were severely impacted by plant shutdowns (Goa plant: 42 days, Bilaspur: 92 days and Paradeep: 19 days) on account of limited orders and raw material sourcing. While this caused a volume decline, production value per tonne available for July and August suggest there was a decline in realisations as well (around 7 percent quarter-on-quarter).

Earnings before interest, tax, depreciation and amortisation (EBITDA) margin was impacted on account of higher operating cost. On the raw material front, benefit from inventory was largely neutralised by the need to opt for higher priced imports.

Management cautious

The management said that while it has about Rs 100 crore in orders and would be able to fulfil those orders given the inventory, it is circumspect about the guidance. The company is hopeful of a positive outcome from the October 9 hearing in the Supreme Court as the petcoke is used as feedstock in the industry and not as fuel.

Earlier this year, the management of Rain Industries said the CPC industry would receive an exemption as petcoke usage is less polluting and used only as feedstock (not as a fuel which is a more polluting). It also acknowledged in its last quarterly call that it has sufficient inventory till September. This also means that if the court ruling is not favourable, operations would also be impacted from October onwards.

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