🔍 At a Glance

NACL Industries Ltd (CMP: ₹189) has posted a loss of ₹93 Cr in FY25 despite receiving a ₹29.26 Cr insurance award. What’s more? The company is in the middle of a 52.98% promoter stake sale to Coromandel International. With rising borrowing, falling equity, and mysterious trade receivables from ghost customers, this isn’t just a result update — it’s a thriller. 🎭

🧬 About the Company

• Sector: Agrochemicals (Crop protection, technical-grade APIs, formulations)
• Legacy: Formerly Nagarjuna Agrichem Ltd
• Operations: Manufacturing + R&D with domestic and export clients
• Products: Herbicides, fungicides, insecticides, and custom synthesis

👨‍💼 Key Managerial Personnel

📊 FY25 Financials – Highlights

📌 Standalone Results (₹ in Lakhs)

Even with a ₹29 Cr insurance income, the bottom line is deep in red. Without it, the hole would be deeper than an auditor’s sigh.

📌 Consolidated Results (₹ in Lakhs)

🧮 Forward-Looking Fair Value (FV) Calculation

Let’s assume:

• Target EBITDA Margin Recovery: 10%
• Realistic Revenue (FY26): ₹1,35,000 Lakhs
• EBITDA = ₹13,500 Lakhs
• EV/EBITDA Multiple (AgChem Avg): 8x
• Enterprise Value = ₹1,08,000 Lakhs
• Less: Net Debt (₹39,594 – ₹5,731 cash) ≈ ₹33,863 Lakhs
• Equity Value = ₹74,137 Lakhs
• Shares Outstanding: ~10.06 Cr

🔮 Estimated FV/Share = ₹737

But: That assumes EBITDA bounces back 10x. Realistic FV if margin remains under pressure is closer to ₹250–₹300 range.

🌾 Growth & Industry Outlook

• Seasonality Matters: Q4 is always lean, but FY25 saw rainfall issues + export pressure.
• Industry Consolidation: Larger players are integrating backward; smaller ones are struggling with working capital.
• Takeover Effect: Coromandel International (Murugappa Group) will take control after acquiring 52.98%. If regulatory approvals come through by FY26, a full restructuring is expected.
• Global Demand: USA, Africa, and LATAM are still strong, but compliance and certification delays (especially EU) affect smaller Indian players.

🚩 Risks & Red Flags

1. Losses Despite Insurance Windfall: Even a ₹29 Cr cash inflow couldn’t salvage profitability.
2. Auditor Alert 🚨: ₹77.96 Cr of FY24 trade receivables were flagged for “ghost customers.” Now fully provided — but seriously?
3. Debt Levels Still High: Despite halving borrowings, interest costs ate over ₹65 Cr.
4. Equity Dilution: ₹100 Cr raised via preferential issue (EQ India Fund). Another stake sale to Coromandel underway.
5. Subsidiary Drag: Australian and Nigerian ops posted net losses.
6. Seasonal + Agro Dependent: Weather = Revenue = Mood swings.

💡 EduInvesting Take

Imagine running a business where your customers ghost you, auditors raise eyebrows, and your insurance claim becomes your biggest highlight. That’s NACL Industries in FY25.

But here’s the twist: The worst may be behind.

• Receivables cleaned up ✅
• Debt trimmed ✅
• New parent incoming ✅

So, at ₹189, you’re not just buying an agrochem stock — you’re buying a turnaround drama where Coromandel is the hero, and the villain is… well, probably bad monsoon.

Is this a toxic pesticide business or a sprayed-clean multibagger?

Let’s just say: if you can stomach a few cockroaches, this might just be a meal worth serving.

🏷️ Tags

NACL Industries, Agrochemicals, Q4 Results, FY25 Earnings, Coromandel Acquisition, Auditor Flag, Insurance Claim, Multibagger Stocks, EduInvesting, Crop Protection, Seasonal Business, Equity Dilution, Debt Restructuring

🗓️ Published: May 28, 2025
✍️ By: Prashant Marathe