💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment, Chemicals, which saw revenue grow by 51.6% YoY to INR 229.68 Cr in FY25 from INR 151.50 Cr in FY24. However, H1FY26 revenue showed signs of volatility with a reported loss of INR 0.59 Cr at the PBT level.

Geographic Revenue Split

Not disclosed in available documents, though operations are concentrated at the manufacturing facility in Chhatral, Gujarat.

Profitability Margins

Profitability is thin and declining; PBT margin compressed from 0.69% in FY24 to 0.36% in FY25. Net Profit (PAT) for FY25 was INR 0.62 Cr, a decline of 19.6% from INR 0.77 Cr in FY24, primarily due to high raw material costs and increased depreciation.

EBITDA Margin

PBILDT margin was reported at 2.32% in FY23 (INR 3.45 Cr). CARE Ratings noted that margins remain thin due to susceptibility to volatile raw material prices, with a target of >5% required for a positive rating action.

Capital Expenditure

Property, Plant and Equipment (PPE) stood at INR 13.93 Cr as of September 30, 2025, down from INR 14.74 Cr in March 2025. Depreciation expense increased 125% YoY to INR 1.68 Cr in FY25, suggesting recent prior commissioning of assets.

Credit Rating & Borrowing

The credit rating was downgraded to CARE BB+; Stable / CARE A4+ in April 2023 from CARE BBB-; Negative. The ratings were subsequently withdrawn in January 2024 at the company's request. Borrowing costs are high, with finance costs of INR 2.44 Cr in FY25 representing 1.06% of total revenue.

⚙️ Operational Drivers

Raw Materials

Copper is the primary raw material, used to produce copper-based inorganic chemicals. Raw material costs (consumption plus stock-in-trade purchases) totaled INR 220.88 Cr in FY25, representing approximately 96.1% of total revenue.

Import Sources

Not specifically disclosed, though the company generally procures copper on a spot or advance payment basis to avail cash discounts.

Capacity Expansion

Current installed capacity is 12,200 MTPA for manufacturing metal-based inorganic chemicals as of March 31, 2023. No specific future expansion timeline was provided in the documents.

Raw Material Costs

Raw material costs surged by 53.4% YoY to INR 220.88 Cr in FY25. The company uses a procurement strategy of spot/advance payments to manage costs, but remains highly vulnerable to global copper price volatility.

Manufacturing Efficiency

Capacity utilization has seen a continuous decline over the four years ending FY23 due to lower demand from key clients and international markets.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth is targeted through volume-driven expansion in the scale of operations, aiming for a Total Operating Income (TOI) exceeding INR 200-250 Cr. The strategy involves leveraging the 12,200 MTPA capacity and established relationships in the metal-based inorganic chemical industry to increase market share in copper sulphate and chloride products.

Products & Services

Metal-based inorganic chemical intermediates including Cuprous Chloride, Cupric Chloride, Copper Sulphate, and CPC Blue Crude.

Brand Portfolio

SANGINITA

Market Expansion

The company is focusing on increasing its international demand presence, which had previously seen a dip impacting capacity utilization.

Strategic Alliances

The company does not have any Subsidiary, Associate, or Joint Venture companies.

🌍 External Factors

Industry Trends

The metal-based inorganic chemical industry is characterized by high raw material price sensitivity and strict environmental regulations. The industry is evolving toward higher compliance standards, requiring companies to invest in pollution control.

Competitive Landscape

The company faces competition from other inorganic chemical manufacturers, particularly those with better backward integration or larger scales of operation.

Competitive Moat

The moat is based on the 30+ years of experience of promoters Mr. Dinesh B. Chavada and Mr. Vijaysinh Chavada in the chemical industry and established business relations with a reputed client base. This is moderately sustainable but challenged by low entry barriers in basic chemical manufacturing.

Macro Economic Sensitivity

Highly sensitive to global commodity prices (Copper) and industrial demand cycles in the chemical sector.

Consumer Behavior

Shift toward suppliers with consistent quality and strict environmental compliance (pollution norms).

Geopolitical Risks

International demand fluctuations have historically impacted sales volumes and capacity utilization.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and environmental standards for chemical manufacturing. The company maintains regular physical verification of PPE every three years to comply with audit requirements.

Environmental Compliance

The company must strictly adhere to pollution control and environmental compliance norms as per Gujarat government regulations; failure to comply poses a significant risk to operational continuity.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 25.4% (INR 21.03 Lakhs tax on INR 82.88 Lakhs PBT).

Legal Contingencies

No specific pending court cases or values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Volatility in copper prices (high impact), potential for unauthorized override of internal controls (inherent risk), and high working capital intensity (liquidity risk).

Geographic Concentration Risk

Manufacturing is 100% concentrated in Gandhinagar, Gujarat, making it susceptible to regional regulatory or environmental policy changes.

Third Party Dependencies

High dependency on copper suppliers; cash flow from operations was previously negative (INR -3.21 Cr) due to increased advances given to suppliers.

Technology Obsolescence Risk

The company uses standard chemical manufacturing processes; no significant digital transformation or high-tech risks were noted.

Credit & Counterparty Risk

Trade receivables stood at INR 32.72 Cr as of Sept 2025, representing roughly 14% of annual revenue, indicating significant credit exposure to customers.