💰 Financial Performance

Revenue Growth by Segment

The company operates in a single primary business segment (Dyes, Intermediates, and Chemicals). Total revenue from operations grew by 2.32% YoY, reaching INR 101.82 Cr in FY25 compared to INR 99.50 Cr in FY24.

Geographic Revenue Split

Not specifically disclosed in available documents, though operations are concentrated in Gujarat with facilities in Vatva (Ahmedabad) and Saykha (Bharuch).

Profitability Margins

Profitability remains thin due to low value-addition processes like blending. PAT margin improved slightly to 1.62% in FY25 from 1.54% in FY24, despite a drop in operating margins, supported by higher non-operating income from interest on loans.

EBITDA Margin

PBILDT margin declined by 136 bps to 2.59% in FY25 from 3.94% in FY24. This 34% YoY contraction in operating profitability was driven by increased employee costs for the new adhesives division and muted sales realizations amid high competition.

Capital Expenditure

The company has invested in a new adhesives manufacturing division and maintains facilities at Vatva and Saykha. Specific INR Cr values for future planned CapEx are not disclosed, but recent cash flow shows payments for PPE and CWIP of INR 0.03 Cr in the half-year ended Sept 2025.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE BB+; Stable' for long-term and 'CARE A4+' for short-term facilities. Borrowing costs are impacted by increased reliance on working capital, with finance costs rising to INR 1.79 Cr in FY25 from INR 1.32 Cr in FY24, a 35.6% increase.

⚙️ Operational Drivers

Raw Materials

Key raw materials include crude oil derivatives and chemical intermediates, which represent the bulk of the cost of materials consumed (INR 61.49 Cr in FY25, or 60.4% of revenue).

Import Sources

Not specifically disclosed, but the company is susceptible to global crude oil price volatility which dictates the pricing of chemical inputs.

Key Suppliers

Not specifically disclosed in the provided documents.

Capacity Expansion

Current operations are stable at approximately INR 100 Cr scale. Expansion is focused on the new adhesives manufacturing division to diversify the product basket and improve value addition.

Raw Material Costs

Cost of materials consumed and stock-in-trade purchases totaled INR 86.02 Cr in FY25, representing 84.5% of total revenue. Profitability is highly sensitive to crude oil price fluctuations.

Manufacturing Efficiency

The business model focuses on low value-addition processes like blending and standardization, which inherently limits margin expansion regardless of utilization levels.

Logistics & Distribution

Not specifically disclosed as a standalone percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

145%

Growth Strategy

The company aims to scale Total Operating Income (TOI) beyond INR 250 Cr (a 145% increase from current levels) by operationalizing the adhesives manufacturing division and leveraging a newly hired retail marketing team to expand market reach beyond industrial dyes.

Products & Services

Dyes, chemical intermediates, textile auxiliaries, and adhesives (newly added).

Brand Portfolio

Hindprakash.

New Products/Services

Adhesives manufacturing division is the primary new launch, expected to contribute to volume-driven growth and better capacity utilization.

Market Expansion

Targeting the retail adhesive market to diversify from the competitive industrial chemical landscape.

Market Share & Ranking

Operates in a highly fragmented industry with many organized and unorganized players; specific ranking not disclosed.

Strategic Alliances

Not specifically disclosed in the provided documents.

🌍 External Factors

Industry Trends

The chemical industry is shifting toward stringent environmental regulations and sustainable practices. HPIL is positioned as a blender/trader, which requires less heavy-industrial compliance than primary manufacturers but remains subject to safety standards.

Competitive Landscape

Faces tough competition from both organized and unorganized players in the dyes and intermediates sector, leading to pricing pressure.

Competitive Moat

The primary moat is the 20+ years of experience of the Mangal family (3rd generation promoters) and an established track record in the Hindprakash group. However, this moat is narrow given the low-margin, competitive nature of the blending business.

Macro Economic Sensitivity

Growth is closely linked to overall economic growth and manufacturing sector performance in India.

Consumer Behavior

Shift toward bio-based materials and renewable chemicals is a noted industry trend that may affect future product demand.

Geopolitical Risks

Geopolitical factors affecting oil-producing regions pose a direct risk to input cost stability.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with GIDC (Gujarat Industrial Development Corporation) norms for facilities in Vatva and Saykha, and adherence to safety standards for chemical handling.

Environmental Compliance

Subject to complex environmental regulations and safety standards inherent to the chemical industry; specific ESG spend not disclosed.

Taxation Policy Impact

Effective tax rate is approximately 26.6% based on FY25 PBT of INR 2.24 Cr and Tax Expense of INR 0.60 Cr.

Legal Contingencies

The company has a Vigil Mechanism (Whistle Blower Policy) and Insider Trading regulations in place. Specific pending court case values are not disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

Volatility in crude oil prices (high impact), intense pricing competition (medium impact), and the successful ramp-up of the adhesives division.

Geographic Concentration Risk

High concentration in Gujarat, with all registered offices and factories located in Ahmedabad and Bharuch districts.

Third Party Dependencies

High dependency on external suppliers for chemical intermediates and raw materials, as the company focuses on blending rather than basic manufacturing.

Technology Obsolescence Risk

Low risk for blending operations, but the shift toward sustainable 'green' chemicals requires ongoing product adaptation.

Credit & Counterparty Risk

Stretched liquidity with high collection periods (125-137 days) and negative cash flow from operations (INR -4.53 Cr in FY25) due to high year-end receivables.