Thirumalai Chemicals Limited makes a corporate announcement

Incremental capacity: the Dahej Phase II PA plant added approximately 96,000 TPA, or 0.096 MTPA. The addition took reported total PA capacity from approximately 0.172 MTPA to 0.268 MTPA. ^[1]

Capacity split: using the reported Dahej Phase I capacity of 24,000 TPA, the implied pre-expansion Ranipet capacity is approximately 148,000 TPA. On that basis, the post-commissioning mix is:

Dahej therefore rises from approximately 13.95% of the pre-expansion capacity to 44.78%, while Ranipet’s share declines from approximately 86.05% to 55.22%. Dahej becomes almost as important as Ranipet in the company’s PA manufacturing footprint.

†Derived from the reported 0.172 MTPA total, 24,000-TPA Dahej Phase I capacity, and 96,000-TPA Phase II addition. The capacity schedule also contains a rounded 94,000-TPA figure for the TCL Intermediates Dahej plant, so the disclosed figures are not perfectly reconciled across documents. ^{[1] [2]}

The total capitalized cost of the Dahej PA project is not separately disclosed in the cited FY26 project disclosures. The annual report identifies the facility as a Phthalic Anhydride project implemented through subsidiary TCL Intermediates, but reports commissioning and operating status rather than a project-cost amount ^[3]. Group-level capital work in progress of Rs 2,518.4 Crores also cannot be used as the Dahej project cost because it is consolidated and not project-specific ^[4].

Debt-to-equity linkage

The latest reported consolidated debt-to-equity ratio is 1.34x for Q1 FY27 ^[5]. This is consistent with:

• Total debt: Rs 2,093.0 Crores ^[6]
• Total equity: Rs 1,563.6 Crores ^[7]
• Derived ratio: Rs 2,093.0 Crores / Rs 1,563.6 Crores = 1.34x

The ratio therefore captures the Dahej-related borrowing only to the extent that the debt drawdown is included in the consolidated borrowings of TCL and its subsidiaries. It does not identify the amount borrowed specifically for the Dahej PA expansion, nor does it permit a project-level debt/equity calculation. The company’s standalone debt-to-equity ratio of 0.51x is less relevant for this purpose because the Dahej facility sits in a subsidiary ^{[8] [3]}.

Debt rose from Rs 2,004.1 Crores in Q3 FY26 to Rs 2,093.0 Crores in Q4 FY26, a derived increase of Rs 88.9 Crores, and remained at that level in Q1 FY27 ^[6]. However, the disclosures do not attribute that increase specifically to the Dahej project; treating the entire Rs 88.9 Crores as Dahej funding would therefore be unsupported.

Dahej is structurally better on logistics and is improving on energy efficiency, but the disclosures do not establish that it consumes less energy per tonne than the legacy Ranipet plant. More importantly, no discrete, quantified uplift in the PA segment’s margin has been confirmed.

Operational comparison

• Energy consumption: Dahej’s energy cost has reduced progressively since the plant began operating at a steady rate in August 2025. Product yield, utility performance and ETP performance also improved, supporting positive EBITDA at the plant in Q3 FY26. ^[9] This is evidence of a ramp-up benefit, but not of a lower energy intensity than Ranipet.
• Ranipet efficiency: Ranipet has a more mature operating track record. Following reactor re-catalysation, its specific steam consumption was reduced by more than 10%; the plant also delivered product-recovery savings, long uninterrupted reactor uptime and continued benefits from gas-based energy. ^{[10] [9]}
• Logistics: Dahej has the clearer structural advantage. Its location in Gujarat’s PCPIR and proximity to west-coast ports and industrial corridors improves supply-chain connectivity. ^[11] The company has also stated that dispatches previously routed from Ranipet to western Indian customers involved longer transport distances; shifting supply toward Dahej reduced distribution-related Scope 3 emissions and improved delivery timelines. ^[12]
• Comparability limitation: The company has not disclosed a plant-level comparison of energy consumption per tonne or logistics cost per tonne for Dahej versus Ranipet. Therefore, Dahej’s advantage is confirmed directionally for logistics and operational improvement, but not quantitatively for total unit cost.

Impact on PA margins

The confirmed conclusion is positive operational leverage potential, not a proven PA-margin expansion:

• Lower Dahej energy costs and shorter western-region logistics should improve the PA cost structure as utilization rises.
• However, the company has not reported a separate PA EBITDA or operating-margin bridge showing how much of the improvement came from Dahej, energy savings or freight savings.
• PA margins remained exposed to industry oversupply and pricing pressure. ^[13] Lower utilization also inflated fixed costs and energy costs because the PA plant functions as an energy hub for the integrated complex. ^[13]
• The company reported that operating margins were recovering as market conditions stabilized, but this is a broader operating-margin statement rather than a quantified PA-segment improvement. ^[13] In the latest Q1 FY27 presentation, raw-material shortages at Dahej still constrained production and affected consolidated performance, indicating that working-capital and utilization issues can offset the facility’s structural cost benefits. ^[14]

Bottom line: Dahej should be more competitive than Ranipet for western India on logistics, while its energy profile is improving toward efficient steady-state operation. Ranipet currently has the stronger disclosed evidence of proven energy optimization. The PA margin effect remains unquantified and not yet separable from pricing, raw-material, utilization and working-capital factors.