💰 Financial Performance

Revenue Growth by Segment

Revenue from the perlite and explosive accessories segment grew significantly, increasing its contribution to total revenue from approximately 9% in FY2022 to 20% in FY2024. The company is targeting further growth through a major focus on exports during FY2025-26.

Geographic Revenue Split

The company operates 12 manufacturing locations across four Indian states, including Karnataka, Madhya Pradesh, and Chhattisgarh. While specific regional % splits are not disclosed, the company has transitioned to a global outlook with a strategic focus on increasing export revenue in FY2026.

Profitability Margins

Operating margins have shown recovery, rising to 7.2% in FY2024 and 7.4% in H1 FY2025, compared to 4.7% in FY2023 and 4.4% in FY2022. This improvement is attributed to a shift in the sales mix toward high-margin products like perlite and accessories.

EBITDA Margin

The EBITDA margin stood at 7.2% for FY2024, a 250 basis point improvement from 4.7% in FY2023. This was driven by lower volatility in raw material prices and increased contribution from value-added segments.

Capital Expenditure

The company has undertaken debt-funded capital expenditure for FY2025 and FY2026 to expand product portfolios and increase existing capacities. The total rated debt amount was enhanced from INR 106.00 Cr to INR 120.69 Cr to support these initiatives.

Credit Rating & Borrowing

ICRA reaffirmed a rating of [ICRA]BBB+ (Stable) in January 2025. The company maintains a healthy capital structure with a low gearing of 0.3 times as of September 30, 2024, and an interest coverage ratio of 7.7 times.

⚙️ Operational Drivers

Raw Materials

Ammonium Nitrate and Ammonia are the primary raw materials, constituting the majority of the total raw material composition. These materials are hazardous and subject to strict storage and transportation regulations.

Import Sources

Sourced primarily from domestic manufacturers within India, as the industry is characterized by a limited number of ammonium nitrate producers.

Key Suppliers

Not specifically named, but the company notes it faces limited bargaining power due to a small number of domestic manufacturers and a moderate scale of operations compared to industry leaders.

Capacity Expansion

The company currently operates manufacturing units across 12 locations in India. Planned expansion initiatives for FY2026 aim to increase existing capacities to meet growing demand in mining and infrastructure.

Raw Material Costs

Profitability is highly vulnerable to fluctuations in ammonium nitrate prices, which follow global commodity cycles. High raw material prices in FY2022-23 previously compressed margins to 4.4%-4.7%.

Manufacturing Efficiency

The company utilizes 12 geographically diversified locations to optimize distribution. Efficiency is driven by R&D efforts to develop customer-specific products and productivity improvement initiatives by quality departments.

Logistics & Distribution

Distribution is managed through 12 manufacturing units across India to serve local mining and construction hubs, though specific cost percentages are not provided.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved by pivoting toward the export market in FY2026, adding a new range of explosive accessories to the portfolio, and expanding existing manufacturing capacities. The company is leveraging its 40-year track record to capture demand from government infrastructure and mining investments.

Products & Services

Industrial explosives, expanded perlite, and explosive accessories used in mining, construction, and infrastructure sectors.

Brand Portfolio

Keltech Energies, Chowgule Global.

New Products/Services

New product range of explosive accessories is being added in FY2025-26 to diversify revenue and improve margins.

Market Expansion

Strategic shift toward international markets (exports) and expansion of the perlite division, which already contributes 20% to revenue.

Market Share & Ranking

Established player with over four decades of experience; specific market share percentage not disclosed.

Strategic Alliances

Part of the Goa-based Chowgule Group of companies.

🌍 External Factors

Industry Trends

The Indian explosives industry is evolving with increased government investment in infrastructure. There is a trend toward diversification into related high-margin verticals like perlite to offset the volatility of the core explosives business.

Competitive Landscape

Intensely competitive industry with several players; KEL competes on the basis of its established market presence and geographic reach across 12 locations.

Competitive Moat

The company's moat is built on high entry barriers due to stringent licensing requirements (PESO) and a 40-year safety track record. This is sustainable as new entrants face significant regulatory and capital hurdles.

Macro Economic Sensitivity

Highly sensitive to the performance of the mining, construction, and infrastructure sectors, which are the primary demand drivers for industrial explosives.

Consumer Behavior

Shift in demand toward more specialized explosive accessories and high-quality perlite for industrial applications.

Geopolitical Risks

Exposure to global commodity price cycles for ammonia, which can be impacted by geopolitical tensions affecting chemical supply chains.

⚖️ Regulatory & Governance

Industry Regulations

Strictly governed by the Petroleum & Explosives Safety Organisation (PESO) regarding the licensing, storage, transportation, and manufacturing of explosives and ammonium nitrate.

Environmental Compliance

Compliant with ISO 14001 (Environmental Management) and ISO 45001 (Occupational Health and Safety). No reported incidents of safety lapses in recent years.

Legal Contingencies

No specific pending court case values mentioned; however, the company acknowledges high potential litigation risks and clean-up liabilities in the event of industrial accidents.

⚠️ Risk Analysis

Key Uncertainties

Vulnerability to raw material price volatility (Ammonium Nitrate) and regulatory changes could impact margins by 2-3%. The 'low frequency-high impact' nature of industrial accidents remains a constant systemic risk.

Geographic Concentration Risk

Operations are spread across 12 locations in India, reducing regional risk, though the company is now expanding into international export markets.

Third Party Dependencies

High dependency on a few domestic manufacturers for Ammonium Nitrate, which limits procurement flexibility.

Technology Obsolescence Risk

Low risk in core explosives, but the company is investing in R&D and digital/IT systems (rated 3/3 by the board) to maintain manufacturing efficiency.

Credit & Counterparty Risk

Receivables quality is supported by a diversified client base with the top 5 clients representing only 22% of revenue.