KOTHARIPET - Kothari Petroche

📊 NSE: KOTHARIPET 🏢 Petrochemicals 📅 Last Updated: 12/14/2025 9:00

💰 Financial Performance

Revenue Growth by Segment

Polyisobutylene (PIB) is the primary business line; total operating income grew 25.1% YoY to INR 603.1 Cr in FY2024 from INR 482.1 Cr in FY2023, driven by a 27.3% increase in sales volume to 41,438 MT.

Geographic Revenue Split

Revenue is split between the domestic Indian market and export markets, including Singapore (Infineum Singapore PTE Limited). Specific percentage splits are not disclosed.

Profitability Margins

Operating Profit Margin was 15.89% in FY2025 (down from 17.29% in FY2024 due to lower sales volume). Net Profit Margin improved to 11.40% in FY2025 from 10.70% in FY2024 due to a transition to a concessional tax regime.

EBITDA Margin

EBITDA margin (OPBDIT/OI) was 15.93% in FY2024, a significant improvement from 11.81% in FY2023 due to economies of scale and better absorption of fixed costs.

Capital Expenditure

In FY2025, the company redeemed investments to fund the purchase of land. Sizeable future capex is planned for value-added products (HR PIB), to be funded via internal accruals and debt.

Credit Rating & Borrowing

ICRA maintains a 'Stable' outlook on long-term ratings. The company has a healthy financial risk profile with a gearing of 0.01x as of March 31, 2025, and an interest coverage ratio of 75.52x.

⚙️ Operational Drivers

Raw Materials

Major raw materials include LPG and Naphtha (feedstocks for PIB) and Husk (fuel for captive power plants).

Import Sources

Not specifically disclosed, though the company sources from major domestic oil marketing companies and international spot markets.

Key Suppliers

Suppliers include major domestic oil marketing companies (OMCs) for contract-based feedstock and various vendors for spot market purchases.

Capacity Expansion

Current sales volume reached 41,438 MT in FY2024. Planned expansion includes a pipeline for High Reactive (HR) PIB and different grade variants to diversify the revenue stream.

Raw Material Costs

Raw material costs are managed through formula-linked pricing for contract sales (linked to LPG/Naphtha) and monthly price notifications for spot sales.

Manufacturing Efficiency

Manufacturing efficiency is reflected in the 27.3% growth in sales volume (FY2024) and an inventory turnover of 22.89 days in FY2025.

Logistics & Distribution

KPL utilizes a robust logistic infrastructure and an expanding Pan-India dealer network to support global and domestic customer bases.

📈 Strategic Growth

Expected Growth Rate

25.73%

Growth Strategy

Growth will be achieved by diversifying into High Reactive (HR) PIB and 2400 molecular weight PIB variants, targeting the adhesives, sealants, and masterbatch markets. KPL is also expanding its dealer network and strategic stock points to enhance global supply capabilities.

Products & Services

Polyisobutylene (PIB) variants, including conventional PIB, High Reactive (HR) PIB, and 2400 molecular weight PIB used in lubricants, adhesives, and sealants.

Brand Portfolio

Kothari Petrochemicals

New Products/Services

New product launches include HR PIB and different grade variants from main grade PIB products, aimed at business diversification in the medium to long term.

Market Expansion

Expansion plans include a Pan-India dealer network and strategic stock points in key international markets to improve logistical efficiency.

Market Share & Ranking

KPL holds a dominant market position, accounting for more than 90% of the total domestic demand for conventional PIB.

🌍 External Factors

Industry Trends

The industry is shifting toward advanced lubricant formulations for hybrid engines and sustainable production practices. KPL is positioning itself by developing 2400 molecular weight PIB and aligning with global environmental standards.

Competitive Landscape

KPL is the dominant domestic player in the PIB market, facing moderate customer concentration but maintaining strong repeat orders from PSUs and global leaders.

Competitive Moat

KPL's moat is sustained by its 90% domestic market share, long-term relationships with major oil marketing companies, and a robust logistic infrastructure.

Macro Economic Sensitivity

Demand is sensitive to infrastructure development and industrial expansion, which drive growth in the adhesives and sealants segments.

Consumer Behavior

Consumer demand is shifting toward advanced metalworking fluids and industrial lubricants, favoring KPL’s specialized PIB products.

Geopolitical Risks

Emerging challenges include the European Union’s Carbon Border Adjustment Mechanism (CBAM), which may require evolving carbon accounting for exports.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to evolving carbon accounting measures and global environmental standards, particularly for products exported to the European Union.

Environmental Compliance

KPL is addressing emerging challenges from the EU's CBAM, which requires product-level emissions assessments and sustainable production alignment.

Taxation Policy Impact

The company transitioned to a concessional tax regime in FY2025, which improved net profit margins to 11.40%.

Legal Contingencies

As of March 31, 2025, there are no pending investor grievances or significant legal disputes reported. A minor technical delay in an Investor Grievance Report for Q4 2024 was rectified without penalty.

⚠️ Risk Analysis

Key Uncertainties

Key risks include volatility in LPG and Naphtha prices and potential regulatory impacts from international carbon taxes like CBAM.

Geographic Concentration Risk

The company has a high concentration in the Indian domestic market, though it is actively expanding its global footprint through Singapore and other markets.