At a Glance
OCCL Ltd manufactures insoluble sulphur, a sticky little compound with a big role in tyre rubber. Freshly listed in 2024, the company boasts solid Q-o-Q growth, healthy margins, and a juicy anti-dumping trigger on Chinese imports. But with a P/E of 31x and debt ticking up, is this a specialty gem or a temporary tyre grip?
1. 🚀 Introduction – New IPO, Old Business, Massive Trigger
- Listed in 2024, OCCL is a spin-off from Oriental Carbon & Chemicals Ltd (that legacy sulphur biz).
- Core focus? Insoluble Sulphur – a critical input in radial tyres and high-performance rubber.
- Stock is already up 2x from its ₹63.6 lows. Current market cap: ₹664 Cr.
- 🔥 June 2025: Anti-dumping duties imposed on imports from China and Japan = direct demand boost for OCCL.
2. 🏭 WTF Do They Even Do?
- 🧪 Insoluble Sulphur (IS): Used in tyre manufacturing (mainly radial tyres).
- 🧫 Sulphuric Acid + Oleum: Co-products that ride on IS production.
- 🛞 Customers: Tyre giants like MRF, Apollo, CEAT, JK Tyre, plus exports.
- 🏗️ Facilities: Manufacturing plant with capacity of 22,000+ MTPA in Gujarat.
💡 Think of them as the MSG to Michelin. Tiny input, huge performance.
3. 📈 Financials – Profits, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue | ₹307 Cr |
| Net Profit | ₹21 Cr |
| ROE | 10.8% |
| ROCE | 15.5% |
| EPS | ₹4.29 |
| OPM | 17.3% |
🧠 For a first-year standalone, this is impressive. Especially in a volatile chemical cycle.
4. 💸 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹133 |
| P/E | 31x |
| Book Value | ₹79.3 |
| P/B | 1.68x |
| Market Cap | ₹664 Cr |
🧮 Fair Value Estimate (EPS ₹4.29 × 15–20x)
→ ₹64 – ₹85
🔮 With Anti-dumping benefit & Q1FY26 momentum: stretch bull case = ₹100
🚨 CMP ₹133 = “already priced for expansion” zone. Market is expecting Michelin-sized miracles.
5. 🧪 What’s Cooking – Triggers, News, Khaas Cheez
- 🇮🇳 Anti-Dumping Duties (June 2025):
- Imported IS from China & Japan now taxed.
- OCCL becomes the only meaningful domestic player.
- 🏗️ Capex on the cards? No announcements yet, but 90% utilization suggests need.
- 🎯 Recent Quarters:
- Q3FY25: ₹107 Cr sales, ₹8.7 Cr PAT, 17.3% OPM
- Q4FY25: ₹96 Cr sales, ₹5.2 Cr PAT
- Company is not just profitable, it’s scaling
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity | ₹10 Cr |
| Reserves | ₹386 Cr |
| Borrowings | ₹43 Cr |
| Other Liabilities | ₹95 Cr |
| Total Assets | ₹534 Cr |
| Fixed Assets | ₹379 Cr |
✅ Reserves healthy
✅ Debt/Equity < 0.15
🧼 Clean sheet. Ready for scaling.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY25 | ₹70 Cr | -₹26 Cr | -₹74 Cr | -₹30 Cr |
🧠 CFO is healthy = business is self-funding.
CFI suggests small investments, possibly maintenance.
CFF negative = debt repayment & no equity dilution. Strong signs.
8. 📐 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 10.8% |
| ROCE | 15.5% |
| OPM | 17.3% |
| EPS | ₹4.29 |
| Debtor Days | 77 |
| Inventory Days | 188 |
| Payable Days | 74 |
| CCC | 192 Days |
📌 CCC = 6 months = typical for chemical + tyre-linked supply chains
📌 ROCE > WACC = Value accretion confirmed.
9. 💥 P&L Breakdown – Show Me the Sulphur
| Year | Revenue | Net Profit | OPM | EPS |
|---|---|---|---|---|
| FY25 | ₹307 Cr | ₹21 Cr | 17.3% | ₹4.29 |
| Q4FY25 | ₹107 Cr | ₹8.7 Cr | 17.4% | ₹1.74 |
| Q3FY25 | ₹96 Cr | ₹5.25 Cr | 16.4% | ₹1.05 |
🧪 Business model working at scale
📈 Margin stability indicates good pricing power
10. ⚖️ Peer Comparison – OCCL vs Chemical Mafia
| Company | Revenue | PAT | ROE | P/E | CMP |
|---|---|---|---|---|---|
| SRF | ₹14,693 Cr | ₹1,249 Cr | 10.3% | 76.6x | ₹3,230 |
| GNFC | ₹7,892 Cr | ₹597 Cr | 7% | 13.7x | ₹558 |
| Deepak Fert | ₹10,274 Cr | ₹933 Cr | 16% | 23x | ₹1,709 |
| GHCL | ₹3,183 Cr | ₹600 Cr | 18.5% | 9.9x | ₹617 |
| OCCL | ₹307 Cr | ₹21 Cr | 10.8% | 31x | ₹133 |
🚨 OCCL’s scale is tiny. Yet valuation is richer than GHCL and GNFC.
11. 📊 Misc – Shareholding, Ownership Game
- 👑 Promoter Holding: 51.76% (Stable)
- 🏦 FII: 0.19%
- 🧢 DII: 5.69%
- 🤹 Public: 42.35%
- 📊 20,000+ shareholders already
📢 Retail is watching. Smart money hasn’t piled in. Yet.
12. 🚩 Red Flags Checklist
✅ No pledging
✅ Positive CFO
✅ High promoter holding
🚨 P/E of 31x = Not cheap
⚠️ CCC > 180 days – working capital pressure
✅ Strong moat post anti-dumping
⚠️ Still dependent on tyre cycle
13. 🧑⚖️ EduInvesting Verdict™
OCCL Ltd is one of those quiet compounders in the making — strong balance sheet, deep moat (only player in India), and now tariff protection from Chinese imports.
But remember:
📈 FY25 was their first big year
🔮 Valuation assumes next year will be better
🎯 Fair Value Range: ₹85–₹100 (for FY26 EPS of ₹5–6, 15–20x P/E)
💥 CMP ₹133 = Future priced in. Any miss? Correction aayega.
📌 Verdict: Great business,
Keep it on your radar – especially if market gives a 20–25% dip.
✍️ Written by Prashant | 📅 July 5, 2025
Tags: OCCL Ltd, Insoluble Sulphur, anti-dumping duty, tyre chemical stock, specialty chemicals, EduInvesting
