🧵 At a Glance
Ambani Orgochem, not to be confused with that Ambani, is a water-based specialty chemical SME that’s quietly grown its revenue 42% in FY25 despite a fire at its Dahej plant. With rising EBITDA, resumed production, and a lean working capital cycle, it’s got the hustle. But is that enough for a ₹125+ stock price?
1️⃣ WTF Do They Even Do?
- SME player in specialty chemicals, water-based mostly
- Products include:
- Organic Peroxides (used in polymer industry)
- Paint driers
- Acrylic emulsions
- Silver ion disinfectants
- Textile auxiliaries
- Serves industries like paints, textiles, plastics, and hygiene
- Export + domestic model
- Manufacturing at Dahisar (Mumbai) + Dahej (Gujarat)
2️⃣ Financials – Profit, Margins, ROE, Growth 📊
| Metric | FY24 | FY25 | Change |
|---|---|---|---|
| Revenue (₹ Cr) | ₹136 | ₹194 | 🔼 +42% |
| EBITDA (₹ Cr) | ₹5 | ₹11 | 🔼 +133% |
| Net Profit (₹ Cr) | ₹3 | -₹1 | 🔻 Loss |
| OPM (%) | 3.7% | 5.7% | 🔼 |
| ROE (%) | -3% | -2.6% | Slight Improvement |
📌 Despite strong growth in revenue and EBITDA, the company still posted a net loss in FY25 due to higher interest and depreciation.
3️⃣ Valuation — Is It Reasonable?
- 📉 P/E = Negative (loss-making)
- 📘 Book Value = ₹74.3
- 🧮 P/B = ~1.69x (at ₹126 share price)
- Market Cap = ₹96 Cr
📊 Fair Value Range?
- Assuming FY26 PAT of ₹2 Cr → EPS = ~₹1.5 (post-tax margin of 1%)
- Assigning 25–30x P/E for high-growth SME → FV = ₹37.5 – ₹45
- Current price ₹126 = Overvalued AF unless profit turnaround sustains
4️⃣ What’s Cooking? (Triggers, Drama, News)
- 🔥 Fire at Dahej plant affected operations (but now resumed)
- June 2025: Call with investors cancelled last minute → 👀
- FY25 Results: Auditors gave unmodified opinion ✅
- High raw material volatility, SME-size cost pressures
5️⃣ Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Key Metrics | Value |
|---|---|
| Total Liabilities | ₹208 Cr |
| Borrowings | ₹54 Cr |
| Equity + Reserves | ₹57 Cr |
| Debt/Equity Ratio | ~0.95x ✅ (under control) |
📌 Not over-leveraged, but working capital still a risk
6️⃣ Cash Flow – Sab Number Game Hai
| Metric | FY25 |
|---|---|
| CFO (Operating Cash) | ₹11 Cr ✅ |
| CFI (Investing) | ₹2 Cr |
| CFF (Financing) | -₹3 Cr |
| Net Cash Flow | ₹10 Cr |
🎯 Positive cash flow after 2 years of mess → good sign
7️⃣ Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 7.09% |
| ROE | -2.6% |
| Interest Cover | Low (~1.1x) 🚨 |
| OPM (%) | 6% |
| NPM (%) | Negligible (Loss) |
⚠️ Profitability is improving, but nowhere near SME benchmarks of 15%+
8️⃣ P&L Breakdown – Show Me the Molecules
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|
| FY21 | ₹87 | ₹2 |
| FY22 | ₹125 | ₹2 |
| FY23 | ₹132 | ₹2 |
| FY24 | ₹136 | ₹3 |
| FY25 | ₹194 | -₹1 |
📉 4 years of slow steady revenue → sudden FY25 pop → still a loss
9️⃣ Peer Comparison – SME vs Titans
| Company | ROE (%) | OPM (%) | P/B | Mcap (₹ Cr) |
|---|---|---|---|---|
| Ambani Orgochem | -2.6 | 6% | 1.69 | ₹96 Cr |
| Vinati Organics | 15.7 | 26% | 7.43 | ₹20,888 Cr |
| Deepak Nitrite | 13.7 | 13% | 4.94 | ₹26,786 Cr |
| Navin Fluorine | 11.5 | 22.7% | 9.36 | ₹24,552 Cr |
⚠️ Not in the same league yet → but if FY26 profit sustains, valuation re-rating is possible
🔟 Miscellaneous – Promoters, Shareholding, Others
- Promoters held steady at 61.25% (post dip in 2023)
- Public shareholding = 38.75%
- Total Shareholders = just 281
- Zero dividend history
- No institutional backing (yet)
🔁 Inventory + WC Cycle – Finally Under Control?
| Metric | FY23 | FY25 |
|---|---|---|
| Inventory Days | 100 | 103 |
| Debtor Days | 72 | 80 |
| Payable Days | 194 | 213 |
| CCC (Cash Cycle) | -22 Days | -30 Days ✅ |
🎯 Improved working capital = less cash stuck in biz
🧑⚖️ EduInvesting Verdict™
“Paints, Peroxides & Potential – But Still Needs Polishing”
Ambani Orgochem is not just another SME with “Ambani” in the name — it’s a legit niche chemical player with a tight product line and solid FY25 revenue recovery. But…
- 🔥 FY25 net loss despite revenue jump = big concern
- ⚡ SME overvaluation is real → FV may be closer to ₹40, not ₹126
- 📈 Turnaround is visible in EBITDA and cash flow
- 👨🔬 Still too small and volatile for institutional love
This isn’t a multibagger yet — it’s more like a specialty chemical audition.
If it clears FY26 with ₹3–4 Cr profit, it graduates. Until then, it’s just smallcap suspense drama.
🧮 Fair Value Range (15–25x sustainable EPS ₹1.5–2) → ₹22.5 – ₹50
(Current Price: ₹126 → 🚨 too hot unless FY26 slays)
✍️ Written by Prashant | 📅 7 July 2025
Tags: Ambani Orgochem, Specialty Chemicals, SME Stocks, Microcap India, Paint & Polymer, Dahej Fire, Working Capital Turnaround, EduInvesting
