SADHNANIQ - Sadhana Nitro

📊 NSE: SADHNANIQ 🏢 Chemicals 📅 Last Updated: 12/14/2025 12:36

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations declined 29.38% YoY to INR 135.99 Cr in FY25, compared to INR 192.86 Cr in FY24. The decline was driven by lower sales across all product segments and the management's decision to halt Para Amino Phenol (PAP) production due to competitive import pricing.

Profitability Margins

Net profit margin remained stable at 3.91% in FY25 compared to 3.92% in FY24. Profit After Tax (PAT) for FY25 was INR 5.22 Cr, down 29.5% from INR 7.41 Cr in FY24.

EBITDA Margin

EBITDA margin improved to 29.37% in FY25 from 23.45% in FY24. This 592 bps improvement was driven by higher profitability on specific products like ODB2, despite the overall revenue decline.

Capital Expenditure

Fixed assets increased by INR 41.90 Cr (13.5% increase) to INR 352.10 Cr in FY25, up from INR 310.20 Cr in FY24, primarily reflecting the capacity enhancement of the PAP plant.

Credit Rating & Borrowing

The company's credit rating is IVR D (Default). Borrowing costs are high, with finance costs reaching INR 17.65 Cr in FY25 (13% of revenue). The company has ongoing delays in servicing term loans and overutilization of cash credit limits.

⚙️ Operational Drivers

Capacity Expansion

Para Amino Phenol (PAP) capacity was enhanced to 6,000 TPA, achieved in September 2024. However, the plant remained non-operational in H2FY25 due to market conditions.

Raw Material Costs

Cost of materials consumed was INR 64.02 Cr in FY25, representing 47.08% of total revenue, down from INR 71.88 Cr in FY24.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through vertical integration, plant automation, and upskilling the workforce in AI/IoT applications. The company aims to establish end-to-end visibility of production and dispatch to enhance competitiveness.

Products & Services

Para Amino Phenol (PAP), ODB2, and Metanilic Acid.

New Products/Services

ODB2 is highlighted as a high-margin product contributing to EBITDA growth.

🌍 External Factors

Industry Trends

The industry is shifting toward digital infrastructure for supply chain visibility and predictive maintenance. Current trends include significant pressure from low-cost imports and a focus on vertically integrated manufacturing to mitigate cost risks.

Competitive Landscape

Intense competition from Chinese manufacturers who are selling products at historically low prices.

Competitive Moat

The company's moat is built on its vertically integrated manufacturing approach and 50-year history of serving multinational conglomerates, which provides a sustainable advantage in quality control and process optimization.

Macro Economic Sensitivity

Sensitive to global economic slowdowns and domestic demand fluctuations in the chemical industry.

Geopolitical Risks

High sensitivity to trade dynamics with China, specifically dumping practices that impact domestic margins.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to Maharashtra Pollution Control Board (MPCB) consents and safety legislations (ISO 9001, OHSAS 18001).

Environmental Compliance

The company maintains ISO 14001:2004 certification and focuses on socially responsible waste and effluent management.

Taxation Policy Impact

The effective tax rate for FY25 was approximately 42.8%, with tax expenses of INR 3.91 Cr on a PBT of INR 9.13 Cr.

Legal Contingencies

A fire incident in the chemical storage area at the Roha plant in September 2024 resulted in the deaths of contract workers, leading to regulatory inspections and local agitation.

⚠️ Risk Analysis

Key Uncertainties

Uncertainty regarding the resumption of PAP production and the company's ability to regularize debt servicing for more than 90 days to improve its credit rating.