State-owned Balmer Lawrie, with a diversified presence across manufacturing and services—including steel barrels, industrial greases and lubricants, corporate travel, and logistics—is aiming to drive growth by expanding its product portfolio and export footprint. Backed by a Rs 200 crore capex plan for FY26, the company is targeting increased exports of lubricants to Africa and chemicals to Western markets, Chairman and Managing Director Adhip Nath Palchaudhuri told Arunima Bharadwaj in an interview. Following a 19% sequential rise in consolidated net profit in Q4FY25, Balmer Lawrie is also strengthening its focus on defence logistics and scaling up its integrated logistics operations.
What is your capex target for FY26 with its break up?
We have a capex plan of Rs 200 crore. Some of that is fresh investment but it includes decisions which have been made in the previous years but are going to play out this year.
Cpaex in the manufacturing segment would be Rs 120 crore. We are also planning a big capex in IT with a transformation project at Rs 90 crore. A large portion will go towards manufacturing and warehousing.
Going forward what will be your key areas of focus and which segments do you see driving the company’s growth?
Our manufacturing business, which is industrial packaging, lubricants and chemicals for the leather industry, typically accounts for 60-65% of our revenues and the remaining comes from services which are logistics and travel & vacations. On the contrary, 30% of our profit comes from manufacturing and the remaining from services.
From a revenue growth perspective we are expecting logistics to be on the forefront in the coming year. Logistics segment, as a cluster, should be able to do much better than what we have done in the previous year and be our primary growth engine.
Given geopolitical tensions, do you see any supply chain disruptions in your operations and how do you plan to mitigate these?
The impact on supply chains will come from the way tariffs have played out in the recent past and other global things which are war related -like the Red Sea crisis and the Russia-Ukraine conflict. All of those have had impacts on the supply chain.
The recent tensions between India and Pakistan are unlikely to have an impact on the supply chain side but there is some impact on our travel business as flights were cancelled.
There is a possibility of a dampening of profit margins because of the volatility at times. However, our logistics turnover has grown from Rs 610 crore of turnover to Rs 766 crore despite all the challenges in the previous year.
We probably have to be more nimble and faster to mitigate these challenges and take advantage of the opportunities.
Going forward, do you plan to increase exports?
We do want to export more. The way the tariffs panned out, there’s an opportunity for us to step up our leather chemical exports because China was getting hit with higher tariffs for chemicals and one of the gainers could be us along with Turkey. There’s a chance we might be able to do more exports for leather chemicals and that is something we actively want to focus on.
The eastern part of Africa provides us with opportunities for exports in the lubricants business. For leather chemicals we would focus on increasing our exports to the western economies.
Do you plan to expand your operations overseas?
Our logistics business can definitely benefit from setting up bases outside the country. We have approached the government to give its clearances which is in advanced stages. If that goes through, we will be setting up our first office overseas in Dubai primarily for logistics but once it is set up it will aid in our exports and travel and vacation business too.
How do you plan to diversify your revenue stream in the next few years?
In industrial packaging we are a very dominant player. We already have 35% market share, so our growth could come in terms of diversifying our own existing products. In logistics there’s an opportunity to add more modes. We will be commissioning our first rake in a few days, carrying goods from steel companies. We will further expand this based on its success.
We are also coming up with 3 PL (third-party logistics) projects which will get commissioned in Dankuni, West Bengal in the next 6 months.
Another big segment would be defence. We are one of the biggest partners of various defence companies in the private and public sector and we will get a lot of opportunities in logistics for defence particularly after the recent India-Pakistan tensions.
Crude oil prices have declined and are projected to be at $65-70/bbl. How do you see this impacting your downstream lubricant business?
It will have an impact on our turnover because at the end of the day our feedstock is base oil. It is difficult to quantify how much impact will be.
What are the major projects slated to be commissioned this year?
Our Chittoor plant, specializing in the production of MS drums, particularly the 210L size within the Industrial Packaging segment is undergoing massive modernisation and should be commissioned in this quarter. Post this, its capacity will increase to more than 12 lakh drums from earlier 6 lakh. Our 3 PL project is also going to come up this year.