🔍 At a Glance:
In just 3 years, Neptune Petrochemicals turned a boring black goo business (bitumen) into a money machine with 119% ROCE and ₹668 crore in revenue. But wait — is it real growth or just other income magic? And why are the EPS numbers more inflated than a political manifesto?
🧪 About the Company
- Incorporated: Oct 2021
- Business: Manufacturer and trader of bitumen products & emulsions
- Market: Domestic & International, serving infrastructure, power, and construction
- Listing: NSE SME
Essentially, they sell the black sticky stuff that keeps roads from looking like Mumbai monsoon victims.
👨💼 Key People (Known but Not Yet Famous)
- Chairman / MD / CFO: Unknown from Screener data — maybe also runs the HR and serves tea.
- Promoter Holding: Allegedly dropped by -25% last quarter, but no clear shareholding data is available.
- SME Listing Note: Volatile and less regulated — proceed with max caution and minimum fanboying.
📊 Financials Snapshot (FY22–FY24)
| ₹ in Cr | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue | 81 | 708 | 668 |
| EBITDA | -0 | 13 | 20 |
| Net Profit | 1 | 10 | 21 |
| OPM % | -0% | 2% | 3% |
| ROCE % | — | 171% | 119% |
| EPS (₹) | 680 | 10,390 | 20,820 👀 |
Wait… ₹10,390 EPS on a ₹10 face value share? Something’s cooking — and it’s not petrochemical soup.
📦 Balance Sheet Breakdown
| ₹ in Cr | FY22 | FY23 | FY24 |
|---|---|---|---|
| Reserves | 1 | 11 | 32 |
| Borrowings | 0 | 5 | 0 |
| Total Liabilities | 98 | 108 | 121 |
| Fixed Assets | 0 | 1 | 3 |
| Other Assets | 97 | 106 | 117 |
It’s a zero-debt company with razor-thin fixed assets and a cash-light model. But where are the heavy-duty capex plans? Bitumen without burners?
💵 Cash Flow Analysis
| ₹ in Cr | FY22 | FY23 | FY24 |
|---|---|---|---|
| CFO | 12 | -7 | 16 |
| CFI | 0 | -1 | -3 |
| CFF | 0 | 5 | -5 |
| Net Cash Flow | 12 | -3 | 8 |
Despite erratic flows, they ended FY24 with positive cash — which is more than what we can say about half of SME IPOs.
🧮 Forward-Looking Fair Value (FV) Estimate
Let’s keep it real:
- PAT = ₹21 Cr (FY24)
- Assume moderate 20% CAGR for next 2 years
- FY26 PAT = ₹30–32 Cr
- Assign P/E range: 15–18 (SME avg for bitumen trading)
- Forward Value Range: ₹450 – ₹550 Cr
- Current Market Cap: ₹316 Cr
- Implied upside: 40–70% if real growth sustains and no promoter stunts happen
🔭 Sector Outlook
- Bitumen demand: Will rise with govt infra push, especially Bharatmala, expressways, airports.
- Competition: From both organized players and PSU imports
- Risks: Low-margin product + global crude volatility
🧐 EduInvesting Take
Neptune isn’t trying to be the next Reliance. But it’s quietly hustling in the corners of India’s road economy — and making tidy margins while doing it.
✅ Debt-free
✅ 100% YoY PAT growth
✅ Insane ROCE
⚠️ But also…
❗ Promoter stake dropped by 25%
❗ EPS seems inflated beyond belief
❗ Other income forms 30%+ of PAT in FY24
❗ SME listing = less scrutiny = more drama potential
So… is Neptune a petro gem or a petro mirage? We’d love to believe the 96.9% ROE is from business — not Excel acrobatics.
⚠️ Risks & Red Flags
- EPS & Face Value Glitch: ₹20,820 EPS on ₹10 FV? Needs audit-level clarification.
- Other Income Dependency: ₹8.23 Cr in FY24 — that’s nearly 40% of the year’s PAT
- Promoter Exit Warnings: 25% stake cut = “exit while stock is hot”?
- Zero Asset Manufacturing? Fixed assets are ₹3 Cr on ₹668 Cr revenue — even software firms have more infra.
Tags: neptune petrochemicals, 5 year recap, sme ipo analysis, bitumen manufacturer india, high ROCE SME stock, petrochemical sme review
Author: Prashant Marathe
Date: 12 June 2025
