TIRUMALCHM - Thirumalai Chem.

📊 NSE: TIRUMALCHM 🏢 Chemicals 📅 Last Updated: 12/14/2025 14:22

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue grew 8.3% YoY to INR 2,152.07 Cr in FY25, while consolidated revenue declined 1.6% to INR 2,049.51 Cr. The US subsidiary (TCL Global BV) saw a 20% revenue decline to USD 27.82 Mn in FY25 due to market instability.

Geographic Revenue Split

India operations contributed INR 2,152.07 Cr (Standalone) in FY25. The United States subsidiary contributed USD 27.82 Mn (approx. INR 230 Cr), representing roughly 11% of consolidated revenue. The company is focusing its full attention on these two primary markets.

Profitability Margins

Standalone PAT margin improved from 1.8% to 3.8% in FY25, with PAT rising 126% to INR 82.21 Cr. However, consolidated PAT was a loss of INR 46.10 Cr in FY25, worsening from a loss of INR 38.79 Cr in FY24 due to subsidiary underperformance.

EBITDA Margin

Standalone EBITDA margin improved from 6.2% to 8.4% in FY25, with EBITDA rising 45% to INR 182.89 Cr. Consolidated EBITDA margin remained flat at 3.4% (INR 69.40 Cr). Q1 FY26 standalone EBITDA margin crashed to 1.5% from 10.1% YoY due to reduced PAN-OX spreads.

Capital Expenditure

Consolidated Property, Plant and Equipment (PPE) increased 93% to INR 1,145 Cr in FY25, with Capital Work-in-Progress (CWIP) at INR 1,352 Cr. The company is investing INR 330 Cr for US capital expenditure and additional funds for manufacturing projects in Dahej, Gujarat.

Credit Rating & Borrowing

ICRA maintains a 'Negative' outlook due to margin pressure. Consolidated non-current borrowings surged 72% to INR 1,401 Cr in FY25. The company faces principal repayment obligations of INR 81 Cr in H2 FY2026 and INR 133 Cr in FY2027.

⚙️ Operational Drivers

Raw Materials

Orthoxylene (OX) is the primary raw material for Phthalic Anhydride (PAN) production. Standalone cost of materials consumed was INR 1,381 Cr in FY25, representing 64.2% of standalone revenue.

Import Sources

Producers from the Far East and China are noted as major competitors and sources of dumping, impacting the Indian market for commodities and food ingredients.

Capacity Expansion

Expanding manufacturing projects through subsidiaries in Dahej, Gujarat and the United States (TCL Specialties LLC). PPE and CWIP combined total INR 2,497 Cr as of March 2025, indicating massive capacity buildup.

Raw Material Costs

Standalone raw material costs decreased 4.8% YoY to INR 1,381 Cr in FY25 despite higher revenue, reflecting better procurement. However, margins remain highly susceptible to the volatility in PAN-OX spreads.

Manufacturing Efficiency

The company is driving process improvements and drawing on 15 years of leadership experience to manage expansion. Capacity expansions are expected to be absorbed over the next 12 to 15 months.

Logistics & Distribution

Not disclosed as a separate percentage of revenue.

📈 Strategic Growth

Growth Strategy

Strategy involves capacity expansion in Dahej and the US, divestment of non-core or struggling subsidiary parts to focus on India/US markets, and absorption of new capacity over 12-15 months to improve margins.

Products & Services

Phthalic Anhydride (PA), Maleic Anhydride (MAN), Speciality Chemicals, and Food Ingredients.

Brand Portfolio

Thirumalai Chemicals Limited (TCL).

New Products/Services

Focusing on Speciality Chemicals and Food Ingredients, which serve robustly growing markets, though currently facing margin pressure from Far East competition.

Market Expansion

Targeting India and the United States for long-term growth. Capital infusion of INR 327.53 Cr was made into the Netherlands subsidiary for onward investment into the US project.

🌍 External Factors

Industry Trends

The industry is currently in a 'bad patch' regarding margins due to Far East oversupply, but volume demand remains robust. Recovery is expected as Far East markets stabilize and domestic capacity is absorbed.

Competitive Landscape

Intense competition from Far East commodity chemical producers who dump products into India using regulatory gaps.

Competitive Moat

Moat is built on a 50-year track record, cost-leadership through process optimization, and robust safety/environmental management (Zero-Liquid Discharge). Sustainability depends on maintaining manufacturing controls.

Macro Economic Sensitivity

Highly sensitive to global oil price volatility and economic slowdowns in China and the Far East, which lead to dumping in the Indian market.

Consumer Behavior

Robust growth in end-user industries for PA and food ingredients supports volume insulation despite margin volatility.

Geopolitical Risks

Trade barriers and regulatory gaps in India are being plugged by the government to prevent toxic/substandard dumping from Far East producers.

⚖️ Regulatory & Governance

Industry Regulations

Subject to pollution norms and manufacturing standards. The company led campaigns for the GOI to plug regulatory gaps ensuring substandard/toxic products are not dumped in India.

Environmental Compliance

Maintains zero-liquid discharge and invested in latest water treatment technology. CSR average net profit is INR 139.01 Cr, with a 2% obligation of INR 2.78 Cr.

Taxation Policy Impact

Standalone effective tax rate was approximately 21% in FY25 (INR 22 Cr tax on INR 105 Cr PBT).

Legal Contingencies

The company has filed an appeal with the Securities Appellate Tribunal (SAT) in Mumbai against fines imposed by Stock Exchanges regarding the reconstitution of Board committees (NRC, SRC, RMC).

⚠️ Risk Analysis

Key Uncertainties

Volatility in PAN-OX spreads and the successful absorption of massive new capacity in the US and Dahej are primary risks, with potential margin impact exceeding 5-10%.