Kanoria Chemicals & Industries Ltd Q2 FY26 – When the Chemist Went Global but Forgot His Calculator

1.At a Glance

Kanoria Chemicals & Industries Ltd (KCIL) — once the pride of Kolkata’s industrial elite — has now turned into that one relative who still insists “everything is fine” while quietly selling the family silver to pay off EMIs. With a market cap of ₹329 crore and a stock price lounging around ₹75.2, the company looks more like a patient recovering from a chemical overdose than a booming manufacturer.

In Q2 FY26 (September 2025 quarter), KCIL posted consolidated revenue of ₹210 crore, an18.8% YoY rise, which sounds encouraging until you see that the profit after tax stood at a mere₹0.61 crore loss, improving 93% YoY — basically, they moved from disaster to slight embarrassment. TheirROE (-11.8%)andROCE (-2.33%)make it clear that money put here doesn’t multiply, it meditates.

With abook value of ₹122, the share trades at a Price-to-Book ratio of0.62, meaning the market is politely saying, “We don’t trust your books, bro.” Promoters still hold a commanding74.4% stake, with a concerning29.6% pledged, which is the corporate equivalent of mortgaging your wedding ring for liquidity.

2.Introduction

Let’s be honest — Kanoria Chemicals is that 1960s industrial veteran that refuses to retire. Founded when India was still figuring out how to make color TVs, KCIL today finds itself juggling formaldehyde, phenolic resins, and electronics — as if Dr. Jekyll and Mr. Hyde both work in its R&D department.

Once upon a time, the Kanorias were the respected chemical barons of the East. Fast-forward to 2025: the company has a solar power plant in Jodhpur (because ESG is fashionable), subsidiaries in Switzerland and Ethiopia (because globalization sounds cool), and a balance sheet that looks like it’s been through three recessions and one demonetization.

Despite negative returns of-36% over the past yearand an industry P/E of34.8, KCIL’s own earnings have been too shy to show up at all. Investors who bought this stock in hope of a chemical boom got instead a slow-burning lab experiment.

But beneath all that chaos lies something oddly fascinating: a company withthree active business verticals — chemicals, automotive electronics, and textiles— all of which are cyclical, global, and potentially explosive (financially and literally).

3.Business Model – WTF Do They Even Do?

Kanoria Chemicals manufacturesindustrial chemicals— not the kind that explode in Breaking Bad, but close. The key products include acetaldehyde, pentaerythritol, formaldehyde, and hexamine — words that can get you banned from carrying hand luggage at the airport.

Beyond chemicals, KCIL has two main foreign adventures:

• APAG Holding AG (Switzerland):This subsidiary designs and manufactureselectronic control units (ECUs)and LED lighting modules for cars. Essentially, this is the Swiss cousin who’s smart but very expensive to maintain.
• Kanoria Africa Textiles Plc (Ethiopia):A denim manufacturing unit that once promised to make Africa wear Kanoria jeans. Today, it’s probably praying for global cotton prices to calm down.

On the Indian front, the company’sthree plants at Ankleshwar, Vizag, and Naidupetachurn out chemicals used in construction, resins, and industrial applications. It also boasts a5 MW solar power plantin Jodhpur — probably its only division with consistent sunshine on both balance sheet and rooftop.

KCIL’s portfolio looks like a buffet — chemicals for builders, electronics for automakers, and denim for millennials. The problem? All three customers are broke at the same time.

4.Financials Overview

Quarterly Results (Consolidated Figures ₹ crore)

So, revenue growth looks decent, but profitability is still allergic to sunlight. The company’s operating margin remains an anaemic 3%, proving that the chemical fumes are thicker than the profit margins.

Annualised EPS (based on latest quarter):₹ -0.56, implying a theoretical P/E ratio that your calculator refuses to display.

5.Valuation Discussion – Fair Value Range Only

Let’s break it down with academic