1. 🧼 At a Glance
Advance Petrochemicals is a microcap chemical manufacturer producing everything from radiator coolants to castor oil ethoxylates. With under ₹50 Cr in revenue, wafer-thin margins, and a 55x P/E slapped on a ₹30 lakh annual profit, this company is either undiscovered… or unprofitable. A classic “looks cheap on price, expensive on math” story.
2. 🧪 Introduction with Hook
- You’ve probably never heard of Advance Petrochemicals — unless you’re deeply passionate about diethylene glycol monobutyl ether.
- It’s been around since 1985, but has stayed a “₹10–50 Cr revenue club” member for decades.
- Stock ran from ₹80 to ₹330 in 2023, then crashed to ₹185.
- Now, with the promoter quietly hiking stake, investors are wondering — is this the next Deepak Nitrite? Or just a warmed-up coolant?
3. 🧪 Business Model – WTF Do They Even Do?
Advance Petrochemicals makes:
🔧 Automotive Chemicals
- Radiator coolants
- Brake fluids
- Fuel system icing inhibitors
🧪 Solvent & Industrial Chemicals
- Ethylene/Diethylene Glycol Ethers
- Triethanolamine, Mono Methyl Ethanolamine
- Polyethylene Glycols
🧴 Specialty Ethoxylates
- Castor oil ethoxylate, coconut oil ethoxylate
- Used in detergents, textiles, lubricants
Clients are mostly B2B buyers in automotive, textile, and lubricant sectors.
But here’s the catch — no marquee clients disclosed, and no clear export business.
4. 📊 Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 17.4 | 27.9 | 37.1 | 35.2 | 49.9 |
| Net Profit (₹ Cr) | 0.28 | 0.30 | 0.94 | 0.22 | 0.30 |
| OPM (%) | 6.8% | 5.4% | 7.4% | 5.2% | 3.0% |
| ROE (%) | 11.8% | 12.6% | 20.4% | 8.0% | 7.7% |
| EPS (₹) | 3.11 | 3.33 | 10.44 | 2.44 | 3.33 |
So yes, profits were up in FY23. But FY24 saw a big drop – back to sub-₹30 lakh PAT.
5. 💸 Valuation – Cheap, Meh, or Crack?
- CMP: ₹185
- TTM EPS: ₹3.33
- P/E: ~55x 😳
- Book Value: ₹44.9 → P/B: 4.12x
- Dividend: 0% (never paid)
So what do we have here?
- A ₹16 Cr company
- With ₹0.30 Cr net profit
- And a valuation of ₹55+ crore-equivalent earnings multiple
🚨 This is not cheap — even Deepak Fertilizers trades at 22x with 16% ROE.
6. 🔥 What’s Cooking – News, Triggers, Drama
📈 Promoter Stake Up:
- From 44.3% (Mar’23) to 50.1% (Mar’25)
- Gradual, non-pledged increase
📉 Stock down 36% YoY:
- Crashed post-2023 run-up
🧾 Zero Dividends ever
- Despite profitability for over 5 years
🔍 Trading Volume Low:
- Extremely illiquid
- Price jumps/drops with small trades
7. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Total Assets | ₹25.35 Cr |
| Borrowings | ₹10.85 Cr |
| Networth | ₹4 Cr |
| Fixed Assets | ₹5.17 Cr |
| CWIP | ₹2.49 Cr |
⚠️ Debt is high relative to equity.
⚠️ Promoter has grown assets via debt, not retained earnings.
✅ But no signs of cash crunch or insolvency.
8. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex (Est) | FCF |
|---|---|---|---|
| FY23 | ₹3.34 | ₹2.76 | ₹0.58 |
| FY24 | ₹1.10 | ₹1.01 | ~₹0.10 |
| FY25 | ₹2.11 | ₹2.53 | NEGATIVE |
🧻 Cash flows fluctuate wildly. FCF often close to zero.
No reinvestment runway from internal accruals.
9. 📉 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 7.7% |
| ROCE | 9.6% |
| OPM | 3.0% |
| Interest Coverage | ~1.6x |
| Debtor Days | 70 |
| Inventory Days | 54 |
| Cash Conversion Cycle | 37 Days ✅ |
Margins are razor-thin. ROE has crashed post-FY23.
10. 📈 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹49.94 Cr
- EBITDA: ₹1.51 Cr
- Net Profit: ₹0.30 Cr
- PAT Margin: 0.6% 😐
- EPS: ₹3.33
Even toothpaste companies have better margins. This is more like Volume x Volume x Hope.
11. ⚗️ Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | M-Cap |
|---|---|---|---|---|
| GNFC | 13x | 7.0% | 7.8% | ₹8,100 Cr |
| Deepak Fert | 22x | 16% | 18.7% | ₹20,000 Cr |
| SRF | 76x | 10.3% | 18.5% | ₹96,000 Cr |
| Advance Petrochem | 55x | 7.7% | 3.0% | ₹16 Cr |
It’s like a scooter parked in a Formula 1 lineup.
12. 🧩 Misc – Shareholding, Promoter Moves
- Promoters: 50.11% (gradual increase)
- Public: 49.89%
- No FII, DII – pure retail play
- No pledging
- No ESOPs
- No corporate drama yet
Also, no investor presentations. No visibility. No moat.
13. 🧑⚖️ EduInvesting Verdict™
“Advance Petrochemicals is like a small-town factory with 50 chemicals but no pricing power, no growth trigger, and a premium valuation. Coolant banaya, aur khud heat mein phans gaya.”
✅ Profitable
✅ Promoter slowly increasing stake
⚠️ Barely scalable
⚠️ High debt relative to net profit
⚠️ Wild valuation vs. earnings quality
🎯 Fair Value Range
Assume normalized EPS: ₹2.5–3.5
Fair P/E for microcap B2B chemical: 12–18x
🧮 Fair Value Range: ₹30 – ₹65
(Current price = ₹185 ❌ = Deep in overvaluation zone)
Tags: Advance Petrochemicals, Brake Fluid Manufacturer, Ethoxylates India, Microcap Chemicals, Radiator Coolants, Illiquid Stocks, EduInvesting
✍️ Written by Prashant | 📅 July 8, 2025
