PARAGON - Paragon Fine

📊 NSE: PARAGON 🏢 Chemicals 📅 Last Updated: 12/14/2025 10:52

💰 Financial Performance

Revenue Growth by Segment

Total income decreased by 4.52% YoY, falling from INR 122.66 Cr in FY24 to INR 117.12 Cr in FY25. Specific business segment growth percentages were not disclosed in the provided documents.

Geographic Revenue Split

The company operates in both domestic and international markets, utilizing a sales and marketing team to increase visibility. Specific percentage contributions from each region are not disclosed.

Profitability Margins

Net Profit Ratio experienced a significant decline of 56%, dropping from 11.87% in FY24 to 5.18% in FY25. Return on Equity (ROE) also fell by 75%, from 0.27 to 0.07, reflecting compressed profitability.

EBITDA Margin

Core profitability metrics showed a downward trend; Return on Capital Employed (ROCE) decreased by 59% YoY, falling from 21.84% in FY24 to 8.97% in FY25.

Capital Expenditure

The company plans to capitalize on unutilized capacity at its existing manufacturing facility to increase production of its current portfolio. Specific historical or planned expenditure in INR Cr is not disclosed.

Credit Rating & Borrowing

The company has significantly reduced its leverage, with the Debt-Equity Ratio improving by 63% from 0.10 to 0.04. Debt Service Coverage Ratio improved by 18% to 19.65, indicating very low borrowing costs and high solvency.

⚙️ Operational Drivers

Raw Materials

The company utilizes various hazardous substances and raw materials required for catalytic processes. Specific chemical names and their percentage of total cost are not disclosed.

Import Sources

The company relies on imports for certain raw materials, which exposes it to shipment cost increases and potential import restrictions. Specific source countries are not disclosed.

Capacity Expansion

The company currently has unutilized capacity at its manufacturing facility which it intends to leverage for future growth. Specific MTPA or unit capacity figures are not disclosed.

Raw Material Costs

Raw materials and packing materials are stated at cost. Inventory valuation (INR 28.70 Cr) is a key audit matter because fluctuations in raw material market prices directly impact the determination of net realizable value and margins.

Manufacturing Efficiency

Manufacturing efficiency appears to have declined as the Inventory Turnover Ratio decreased by 15% (from 4.48 to 3.79) and the Net Capital Turnover Ratio fell by 30% (from 2.34 to 1.63).

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth will be driven by capitalizing on the Government of India's 'self-reliance' objectives and domestic sourcing initiatives. The company intends to utilize existing idle capacity at its manufacturing plants and expand its presence in international markets through its dedicated sales and marketing team.

Products & Services

The company manufactures and sells chemical intermediates and speciality chemicals.

New Products/Services

The company aims to upgrade its product portfolio from time to time to meet customer quality standards, though specific new launches and their revenue contributions are not disclosed.

Market Expansion

Targeting increased visibility in both domestic and international markets to tap into the demand for chemical intermediates.

🌍 External Factors

Industry Trends

The industry is shifting toward domestic sourcing and self-reliance in India, driven by government policy. The company is positioning itself as a supplier of chemical intermediates to benefit from this trend.

Competitive Landscape

The company faces competition in the speciality chemical sector, where failure to upgrade product portfolios or comply with customer quality standards poses a risk.

Competitive Moat

The company's moat is built on its R&D capabilities in catalytic processes and its established manufacturing infrastructure. Sustainability depends on the ability to protect intellectual property (trade secrets, copyrights) and maintain quality standards.

Macro Economic Sensitivity

The company is sensitive to inflation and unanticipated turbulence in interest rates or equity prices, which could affect the cost of operations and financial results.

Consumer Behavior

Demand is driven by industrial requirements for chemical intermediates; a reduction in demand from these downstream industries would directly impact sales volumes.

Geopolitical Risks

Risks include changes in international trade regulations and potential restrictions on the import of raw materials.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to regulations regarding the manufacture, usage, and storage of hazardous substances, as well as jurisdiction-specific registrations and quality standards.

Environmental Compliance

The company operates with hazardous substances and faces risks related to environmental problems and potential uninsured losses. Specific compliance costs are not disclosed.

Taxation Policy Impact

Any change in government policies resulting in increased taxes is identified as a risk factor. The company's Net Profit Before Tax was INR 8.28 Cr against a Net Profit After Tax of INR 5.92 Cr.

Legal Contingencies

The company reports that it does not have any pending litigations that would impact its financial position as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

Key risks include the inability to sustain historical growth rates (which saw a 58.6% drop in PAT this year) and the potential failure to protect intellectual property rights.

Geographic Concentration Risk

Not disclosed, though the company mentions both domestic and international operations.

Third Party Dependencies

The company relies on Bigshare Services Private Limited as its Registrar and Share Transfer Agent (RTA).

Technology Obsolescence Risk

The business faces the risk of failing to successfully upgrade its product portfolio or design new catalytic processes, which are essential for maintaining its competitive edge.