MAHICKRA - Mahickra Chem.

📊 NSE: MAHICKRA 🏢 Dyes And Pigments 📅 Last Updated: 12/14/2025 9:27

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment of Dyes and Chemicals. Standalone revenue from operations grew 22.58% YoY to INR 8,815.78 lakhs in FY 2024-25 compared to INR 7,191.69 lakhs in FY 2023-24. For the half-year ended September 30, 2025, revenue reached INR 4,905.29 lakhs, indicating continued momentum.

Geographic Revenue Split

Not disclosed in available documents, though the company notes a wide global footprint and significant exposure to export markets which are currently facing headwinds from high shipping costs.

Profitability Margins

Net Profit Ratio improved significantly from 1.49% in FY 2023-24 to 2.87% in FY 2024-25. This 138 bps expansion was driven by better operational performance and cost management despite competitive market conditions.

EBITDA Margin

EBITDA grew 74.02% YoY to INR 511.90 lakhs in FY 2024-25 from INR 294.16 lakhs. The EBITDA margin improved from 4.09% to 5.81% due to enhanced operational efficiency and better absorption of fixed costs.

Capital Expenditure

Tangible assets stood at INR 502.04 lakhs as of September 30, 2025, compared to INR 515.48 lakhs as of March 31, 2025, suggesting minimal recent expansion and primarily maintenance-related expenditure.

Credit Rating & Borrowing

Short-term borrowings stood at INR 1,489.64 lakhs as of September 30, 2025. Finance costs for FY 2024-25 were INR 129.23 lakhs, representing approximately 1.47% of total revenue. The Debt-Service Coverage Ratio (DSCR) declined sharply from 2.18 to 0.51, indicating tightened liquidity for debt servicing.

⚙️ Operational Drivers

Raw Materials

Key chemicals and dyestuff intermediates represent the primary input costs. Cost of materials consumed was INR 8,093.36 lakhs in FY 2024-25, accounting for 91.8% of total revenue.

Import Sources

Not specifically disclosed, but the company mentions global trade uncertainties and geopolitical tensions in Russia, Ukraine, and the Middle East as factors affecting supply chain competitiveness.

Capacity Expansion

Not disclosed in available documents; however, the company emphasizes focusing on operational efficiency and prudent inventory management over aggressive physical capacity expansion in the current scenario.

Raw Material Costs

Raw material costs as a percentage of revenue remained high at approximately 91.8% in FY 2024-25. The company uses strategic market diversification to manage procurement risks and maintain margins during price volatility.

Manufacturing Efficiency

Return on Capital Employed (ROCE) improved from 5.70% in FY 2023-24 to 9.44% in FY 2024-25, reflecting better utilization of existing assets and improved profitability per unit of capital.

Logistics & Distribution

Distribution costs are significantly impacted by high global shipping rates, which the company identifies as a major challenge to maintaining competitiveness in international markets.

📈 Strategic Growth

Expected Growth Rate

22.60%

Growth Strategy

Growth will be achieved through strategic market diversification to mitigate regional geopolitical risks, focusing on high-quality dyestuffs in the reactive dyes market, and leveraging its 45% stake in RCN Specialities Private Limited to expand its product/service ecosystem. The company is also focusing on operational efficiency to improve the Net Profit Ratio, which doubled in the last fiscal year.

Products & Services

Reactive Dyes, Dyestuffs, and various specialty chemicals used in textile and industrial applications.

Brand Portfolio

MAHICKRA

New Products/Services

Not disclosed in available documents, though the company mentions significant investments in its product portfolio to maintain a strong position in the reactive dyes market.

Market Expansion

The company is targeting strategic market diversification to sustain growth and resilience against low export orders in traditional markets.

Market Share & Ranking

Not disclosed in available documents, but the company claims a strong position in the reactive dyes market.

Strategic Alliances

Holds a 45% stake in RCN Specialities Private Limited, an associate company incorporated in 2022.

🌍 External Factors

Industry Trends

The industry is seeing a recovery in domestic demand but faces challenges from extended credit cycles and working capital constraints. There is a shift toward more stringent environmental compliance, such as ZDHC Level 3 and Turkish REACH, which Mahickra has already adopted to future-proof its operations.

Competitive Landscape

Faces intense competition from emerging low-cost manufacturers globally, particularly in the reactive dyes segment.

Competitive Moat

The company's moat is built on certifications (ZDHC Level 3, Turkish REACH) and a strong distribution network. These are sustainable because they act as entry barriers for smaller, non-compliant manufacturers, though competitive pressure from low-cost global producers remains a threat.

Macro Economic Sensitivity

Highly sensitive to global trade volumes and shipping costs. Domestic demand recovery is a positive driver, but export-led growth is sensitive to international credit cycles.

Geopolitical Risks

Ongoing conflicts between Russia-Ukraine and strife in the Middle East are cited as major risks that affect global operations, supply chains, and export competitiveness.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent environmental regulations and international chemical standards like REACH. The company must adhere to pollution norms and manufacturing standards to maintain its export certifications.

Environmental Compliance

The company maintains high compliance standards including ZDHC Level 3, Turkish REACH, and ISO 14001:2015. Compliance requires continuous investment and poses a risk of cost escalation if regulations tighten further.

Taxation Policy Impact

Total tax expense for FY 2024-25 was INR 99.43 lakhs on a standalone profit before tax of INR 352.77 lakhs, representing an effective tax rate of approximately 28.18%.

Legal Contingencies

The Independent Auditor's Report for the year ended March 31, 2025, expressed an unmodified opinion, and management represented that no material funds have been advanced or loaned to intermediaries for ultimate beneficiaries in violation of the Companies Act.

⚠️ Risk Analysis

Key Uncertainties

Geopolitical instability (Russia/Ukraine/Middle East) and high shipping costs are the primary uncertainties, with the potential to significantly impact export margins which are already under pressure.

Third Party Dependencies

High dependency on chemical intermediate suppliers, as material costs constitute over 90% of the revenue base.

Technology Obsolescence Risk

Cybersecurity is identified as a growing concern, requiring ongoing investments in IT security to protect sensitive data and ensure business continuity.