GALAXYSURF - Galaxy Surfact.

📊 NSE: GALAXYSURF 🏢 Chemicals 📅 Last Updated: 12/13/2025 22:15

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew 11.3% YoY to INR 4,223.67 Cr in FY25 from INR 3,794.38 Cr. Performance Surfactants volume grew 5.0% to 1,67,423 MT, while Specialty Care volume remained nearly flat with 0.2% growth to 89,375 MT. Standalone revenue grew 9.3% to INR 3,001.27 Cr.

Geographic Revenue Split

Volume distribution for FY25: India contributed 44% (1,12,977 MT, down 1.9% YoY), AMET (Africa, Middle East, Turkey) contributed 27% (69,274 MT, down 1.0% YoY), and Rest of the World (ROW) contributed 29% (74,547 MT, up 17.6% YoY).

Profitability Margins

Consolidated PAT margin declined to 7.2% in FY25 from 7.9% in FY24. Standalone PAT margin was 5.8% compared to 7.3% in the previous year. The decline is attributed to lower fixed cost absorption and margin pressures across segments despite stable volumes.

EBITDA Margin

Consolidated EBITDA margin was 12.1% in FY25, a decrease from 13.1% in FY24. EBITDA per tonne decreased 0.8% to INR 19,868. Total consolidated EBITDA rose 2.5% to INR 510.04 Cr due to higher overall volumes despite the margin compression.

Capital Expenditure

The group is expected to incur capital expenditure of INR 150-175 Cr per annum over the medium term. This capex is planned to be funded entirely through internal accruals of over INR 300 Cr per annum.

Credit Rating & Borrowing

CRISIL AA-/Stable (Long Term) and CRISIL A1+ (Short Term) reaffirmed as of October 2025. Interest coverage ratio remained healthy at over 25 times in FY25, though it decreased from 37 times in FY24 due to higher finance charges of INR 19.25 Cr.

⚙️ Operational Drivers

Raw Materials

Oleochemical-based fatty alcohols (primary source), petrochemical-based surfactants (competitor source). Raw material costs are a significant portion of the cost structure, though specific percentage splits per material are not disclosed.

Import Sources

Not explicitly disclosed, but the company operates a major subsidiary in Egypt (Galaxy Chemicals S.A.E.) to service the AMET region and sources globally for its Indian operations.

Capacity Expansion

Galaxy is the largest player of surfactants derived from oleochemical sources in India. Specific MTPA capacity figures are not provided, but the company is currently going slow on commercializing pipeline projects due to inflationary concerns.

Raw Material Costs

Raw material price volatility and shipment delays impacted margins in previous cycles (e.g., FY22 margin drop to 10.9%). Procurement is managed through a mix of sourcing efficiencies and passing on costs to customers where possible.

Manufacturing Efficiency

EBITDA per tonne is the primary efficiency metric, which stood at INR 19,868 in FY25. Fixed cost absorption was lower in FY24/FY25, impacting overall margins.

Logistics & Distribution

Distribution is global, with ROW volumes growing 17.6% in FY25. Logistics costs are sensitive to global freight rates and supply chain disruptions.

📈 Strategic Growth

Expected Growth Rate

12-14%

Growth Strategy

Strategy involves aggressive marketing in Tier 2 and Tier 3 Indian cities to recoup volume losses in Tier 1, hunting for new customers in ROW markets (which grew 17.6% in FY25), and focusing on high-margin specialty care products. The company is also executing an EPC contract for a construction-type project to generate fee income.

Products & Services

Surfactants and specialty chemicals used as intermediates in the Home and Personal Care (HPC) industry, including ingredients for shampoos, detergents, and skin care products.

Brand Portfolio

Galaxy Surfactants (Corporate Brand). Specific consumer-facing brand names are not owned as the company is a B2B supplier.

New Products/Services

Focus on 'Specialty Care' segment products; however, new product revenue contribution percentages are not specifically disclosed.

Market Expansion

Expansion is focused on the ROW (Rest of World) market, specifically Latin America and APAC, which showed strong results in Q2 FY26.

Market Share & Ranking

Established leader in the HPC intermediates market in India; largest player of oleochemical-based surfactants in the country.

🌍 External Factors

Industry Trends

The HPC industry is shifting toward sustainable, oleochemical-based ingredients. Galaxy is positioned as a leader in this shift, moving away from petrochemical sources. The industry is currently seeing flat to 2% volume growth globally.

Competitive Landscape

Competitors include manufacturers of petrochemical-based surfactants. Galaxy competes on its 'green' oleochemical profile and large-scale manufacturing capacity.

Competitive Moat

Moat is built on 40+ years of technical expertise in surfactants, deep-rooted relationships with global FMCG majors, and a specialized manufacturing footprint that is difficult for competitors to replicate quickly.

Macro Economic Sensitivity

Highly sensitive to global inflation, which dampens consumer demand in the HPC sector and leads to lower volume growth (only 3.3% total volume growth in FY25).

Consumer Behavior

Shift toward premiumization and specialty personal care products in ROW markets is driving the 17.6% volume growth in that segment.

Geopolitical Risks

Geopolitical uncertainties in the AMET region and potential tariff wars are cited as factors that could either disrupt supply or create opportunities in international markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to SEBI (LODR) Regulations 2015 for disclosures and Ind AS 116 for lease accounting. Manufacturing must meet global standards for HPC intermediates.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 19.8% (INR 75.54 Cr tax on INR 380.45 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (fatty alcohols) and global demand slowdown due to inflation (potential 5-10% impact on volume growth).

Geographic Concentration Risk

India and AMET account for 71% of total volumes (1,82,251 MT out of 2,56,798 MT), making the company vulnerable to regional economic downturns.

Third Party Dependencies

Dependency on global shipping lines for the ROW and AMET segments; disruptions can lead to high inventory carrying costs (65-75 days).

Technology Obsolescence Risk

Risk is mitigated by continuous focus on specialty chemicals and oleochemical surfactants, which are currently the preferred technology over petrochemicals.