1. At a Glance
Fairchem Organics Ltd is currently trading around ₹617, nursing a market cap of ~₹803 crore, and carrying the emotional baggage of a 253x trailing P/E. Yes, you read that right. Two hundred. Fifty. Three.
The latest Q3 FY26 results came in like a diet cola at a wedding buffet — technically present, emotionally disappointing. Quarterly revenue slipped to ₹100 crore, down 11.8% YoY, while PAT shrank to ₹0.64 crore, a brutal 81.8% YoY decline.
Margins? Operating margin is hovering around 4%, which is awkward for a “specialty chemicals” company competing in a world where peers flex 15–30% EBITDA margins like gym selfies.
And yet — promoters increased stake to 63.25%, completed a ₹34 crore buyback at ₹800, and are talking about Isostearic Acid, animal feed, and new oleo products like it’s Avengers Endgame Phase 2.
So what’s going on here? Is this a classic mid-cap chemical downcycle story… or a premium valuation refusing to accept reality?
Let’s open the lab notebook.
2. Introduction – A Demerger, a Dream, and a Margin Hangover
Fairchem Organics was born in 2019, carved out of Fairchem Speciality Ltd via a demerger. The idea was simple and elegant:
👉 separate oleochemicals + nutraceuticals into a focused entity
👉 unlock value
👉 let investors enjoy clean reporting and margin clarity
Fast forward to FY26, and investors are instead enjoying a masterclass in patience.
On paper, Fairchem Organics checks many boxes:
- niche products
- limited domestic competition
- export approvals
- long customer relationships
But markets don’t pay for potential PowerPoint slides. They pay for earnings, returns, and cash flows. And right now, Fairchem’s numbers look more like a chemistry experiment that hasn’t stabilised yet.
The company is stuck between:
- legacy linoleic/dimer acid volatility
- new products not yet at scale
- rising working capital
- and margins thinner than a
- CA’s smile during tax audit season
So before judging, let’s understand what this company actually does.
3. Business Model – WTF Do They Even Do?
Think of Fairchem Organics as a by-product whisperer.
They take vegetable oil refining waste — acid oil (~1.25%) and deodoriser distillate (~0.25%) — and convert it into high-value oleochemicals and nutraceutical intermediates.
Segment 1: Oleo Chemicals
This is the OG business:
- Dimer Acid
- Linoleic Acid
- Palmitic Acid
- Monomer Acid
- Isostearic Acid (new kid on the block)
Applications:
- paints
- inks
- adhesives
- detergents
- industrial resins
Fairchem is one of the only manufacturers of Linoleic Acid and Dimer Acid in India, which sounds powerful… until you realise pricing is still commodity-linked.
Segment 2: Nutraceuticals
This includes:
- Mixed Tocopherols
- Sterol Concentrates
Used in:
- FMCG
- food additives
- supplements
Higher margin in theory. More regulation, approvals, and customer validation in practice.
The entire operation runs out of one manufacturing facility in Gujarat, with ~230 employees and a processing capacity that has scaled from 10,000 MTPA in FY11 to 120,000 MTPA in FY25.
Scale is not the problem. Monetisation is.
4. Financials Overview – Numbers Don’t Lie, They Roast
Quarterly Performance (Q3 FY26)
(Figures in ₹ crore)
| Metric | Latest Qtr (Dec-25) | YoY Qtr (Dec-24) | Prev Qtr (Sep-25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 100.13 | 113.57 | 111.52 | -11.8% | -10.2% |
| EBITDA | 4.17 | 7.83 | 4.19 | -46.7% | -0.5% |
| PAT | -0.10 | 3.52 | 0.77 | -102.8% | -113% |
| EPS (₹) | -0.08 | 2.70 | 0.59 | -103% | -113% |
