1. At a Glance
I G Petrochemicals Ltd, India’s largest manufacturer of Phthalic Anhydride (PAN), also produces Maleic Anhydride (MAN), Benzoic Acid, and DEP. With a market cap ₹1,405 Cr, CMP ₹458, and book value ₹435 (P/B ~1.05), it’s priced like a value play… but the P/E is 23.2 thanks to falling profits.
Q1 FY26 just saw a ₹13 Cr loss, OPM collapse to negative territory, and the share price is still licking its wounds after a 26% fall in the last year.
2. Introduction
In the chemical kingdom, PAN is the crown jewel used in plasticizers, paints, resins, and pigments. IGPL has ruled this niche since 1988, with economies of scale, captive raw material integration, and export markets.
The problem? PAN prices are cyclical, crude-linked, and China loves dumping excess supply when it’s bored. After a blockbuster FY21–FY22, margins have nosedived, capex is ongoing, and Q1 FY26 numbers were… let’s just say, “lab accident” level bad.
3. Business Model (WTF Do They Even Do?)
Core Products:
- Phthalic Anhydride (PAN): Main revenue driver.
- Maleic Anhydride (MAN): By-product with industrial applications.
- Benzoic Acid & DEP: Niche derivatives for pharma, personal
- care, and perfumes.
End-User Sectors: Paints, plastics, textiles, automobiles, dyes, perfumes.
Revenue mix is commodity-heavy — pricing power is limited, so volume + cost efficiency decide profits.
4. Financials Overview
Latest Quarter (Q1 FY26):
- Revenue: ₹470 Cr (-19.7% YoY)
- Operating Profit: -₹1 Cr (OPM: -0.2%)
- Net Profit: -₹13 Cr
- EPS: -₹4.22
Fresh P/E Calculation:
Annualizing a loss makes P/E meaningless, but using FY25 EPS ₹19.71 → P/E ~23.2 at CMP ₹458.
TTM:
- Revenue: ₹2,091 Cr
- Net Profit: ₹61 Cr
- ROE: 8.17%
- ROCE: 10.9%
- Dividend Yield: 2.18%
5. Valuation (Fair Value RANGE only)
| Method | Basis | Multiple / Assumption | Value (₹ Cr) | Per Share (₹) |
|---|---|---|---|---|
| P/E | EPS ₹19.7 × 12–15 | 12x – 15x | 1,415 – 1,768 | 462 – 577 |
| EV/EBITDA | EBITDA ₹157 Cr × 6–7 | 6x – 7x | 942 – 1,099 | 308 – 360 |
| DCF | Flat 0% growth 2 yrs, 8% thereafter | Conservative | ~₹1,250 Cr | ~₹408 |
Fair Value Range: ₹400 – ₹460 per share.
Disclaimer: This FV range is for educational purposes only and is
