Birla Cellulose’ cellulosic filament yarn segment registers 3% Y-o-Y growth in Q2, FY26 net profit

The cellulosic filament yarn segment of Birla Cellulose’ reported a 3 per cent Y-o-Y rise in net profit in Q2, FY 26, supported by domestic festive demand, though realization remained under pressure due to aggressive pricing strategies by Chinese producers in the Indian market. However, the Cellulosic Fibres segment recorded a mixed Q2 FY26, characterized by high operating rates in China and stable domestic pricing despite global moderation, ultimately leading to lower margins due to elevated input costs.

The company reported 89 per cent growth in China's operating rates during Q2 FY26 as against 86 per cent in Q2 FY25. This increased production contributed to higher inventory levels, with average inventory holding rising significantly to 15 days compared to 8 days in Q2 FY25. The combination of high production and inventory led to a moderation in average CSF (Cellulosic Staple Fibre) prices globally, settling at $1.51/kg in Q2 FY26.

However, domestic CSF prices remained relatively stable in India, primarily benefiting from the rupee depreciation. The company’s CSF sales volume declined by 5 per cent Y-o-Y to 209 kilo tons. This temporary decline was attributed to logistics challenges at the Vilayat facility, which have since been resolved. Their specialty sales volumes increased 53 per cent Y-o-Y, driven by strong growth in exports during the quarter.