GANDHAR - Gandhar Oil Ref.

📊 NSE: GANDHAR 🏢 Refineries 📅 Last Updated: 12/13/2025 22:15

💰 Financial Performance

Revenue Growth by Segment

PHPO (Personal care, healthcare and performance oils) is the largest segment, contributing ~47.27% of consolidated revenue from finished goods in FY25. Other segments include PIO (Process Insulating Oil) and Lubricants. Consolidated revenue for FY24 was INR 4,123.10 Cr, remaining flat compared to INR 4,081.24 Cr in FY23 despite a 12% increase in volumes, as average realizations declined by 6.22%.

Geographic Revenue Split

Overseas sales contributed 40.21% of consolidated revenue in FY25, with operations spanning 100+ countries across Europe, the Americas, Africa, and APAC. Domestic sales account for the remaining ~59.79% of revenue.

Profitability Margins

Net Profit Margin declined from 4.02% in FY24 to 2.14% in FY25. Standalone Operating Profit Margin stood at 4.38% in FY25 compared to 7.10% in FY24, primarily impacted by lower per-unit realizations and increased freight costs due to the Red Sea crisis.

EBITDA Margin

Consolidated EBITDA margin was 4.49% in FY25, a significant decline from 6.78% in FY24 (a 229 bps drop). The decline is attributed to global consumption softness and logistical challenges.

Capital Expenditure

The company is undertaking completed and ongoing capex towards capacity expansions to improve realizations over the medium term. Specific INR values for planned capex were not disclosed in available documents.

Credit Rating & Borrowing

The company maintains a 'Stable' credit rating. Interest coverage ratio (ICR) stood at 3.09 times in FY25, down from 4.44 times in FY24. Finance costs were reduced in Q2 FY26 as SOFR fell below 5% and the company converted overseas suppliers to non-LC terms.

⚙️ Operational Drivers

Raw Materials

Base oil (a derivative of crude oil) is the primary raw material, accounting for 85% of the company's total raw material requirements.

Import Sources

85% of raw materials are imported, primarily sourced from international refineries in regions such as Saudi Arabia and South Korea.

Key Suppliers

Key suppliers include Saudi Aramco, S-Oil Corporation, BPCL, and HPCL.

Capacity Expansion

Consolidated manufacturing volumes for H1 FY26 stood at 261,524 KL, representing a 9% increase from 240,318 KL in H1 FY25.

Raw Material Costs

Raw material costs are highly sensitive to global base oil prices. Supply agreements are linked to monthly ICIS base-oil benchmarks. The company uses price-pass-through clauses in certain contracts to mitigate volatility.

Manufacturing Efficiency

Manufacturing volumes grew 9% YoY in H1 FY26, reaching 261,524 KL, indicating improved operational scale.

Logistics & Distribution

Strategically located manufacturing facilities near Mumbai and JNPT ports provide logistical advantages for the 40.21% export business.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be driven by an enhanced focus on the high-margin PHPO segment, leveraging existing relationships with marquee clients like P&G and Unilever to increase wallet share, and expanding into new geographies for manufacturing ingredients.

Products & Services

White oils, petroleum jelly, industrial and automotive lubricants (industrial oil, transformer oil, rubber processing oil), and specialty oils.

Brand Portfolio

Gandhar, Texol (Sharjah JV).

New Products/Services

Focus on value-added products such as derma-grade oils and jellies to target a 4% to 5% gross margin expansion.

Market Expansion

Targeting expansion in 100+ countries with a focus on high-growth regions like Asia Pacific, driven by rising disposable incomes and industrialization.

Market Share & Ranking

Ranks among the top two players in India's white oil market with a 26.5% share and is one of the top five players globally.

Strategic Alliances

Operates a plant in Sharjah, UAE through its subsidiary Texol Lubritech FZC (TLF).

🌍 External Factors

Industry Trends

The global white oil market is projected to reach USD 3.16 billion by 2032. There is a growing regulatory focus on product purity in the pharma and personal care sectors, favoring Gandhar's PHPO division.

Competitive Landscape

Leading manufacturer in a niche specialty oil market with high entry barriers due to stringent quality standards and complex business operations.

Competitive Moat

Durable advantages include a 30-year operational track record, stringent quality certifications (FDA, ISO, Halal), and cost leadership through scale and port proximity.