🟢 At a Glance

Neptune Petrochemicals Ltd is a 2021-born SME that just listed in June 2025—and it’s already firing on 119% ROCE cylinders. With just ₹668 Cr in FY24 sales, it’s running at laughably low capacity, yet managed a 100% YoY profit jump. Multibagger potential or margin mirage?

🧪 About the Company

Welcome to the petrochemical circus. Neptune Petrochemicals, incorporated in October 2021, deals in the sticky stuff that holds roads together—bitumen, furnace oils, lubricants, and emulsions.

But wait—this ain’t just another road tar trader. Neptune manufactures and trades its petroleum-based products, playing middleman and producer, depending on the mood (or maybe margin).

📦 Product Line-Up:

• Bitumen (93.8% of FY24 revenue): Black gold for highways
• Furnace Oil & LDO: Industrial heating bros
• Lubricants & Base Oils: B2B grease and grind
• Bitumen Emulsion: Just 0.7% of biz, but enough to confuse investors on product diversity

🧪 TL;DR: Bitumen is the hero. Everything else is either side character or marketing filler.

🏭 Capacity Utilization: Why Are Plants Napping?

Neptune has 3 manufacturing units and a 4th one coming soon. But spoiler: they’re mostly sitting idle.

🚧 Under Construction: Dera Bassi, Punjab
Target: North India. Status: DG set lag gaya bhai, ab bas kaam shuru hone wala hai.

🛠️ Observation: They’re scaling fast — but operating slow. Either demand is iffy, or trading margins are sweeter than manufacturing margins.

📊 Key Financials

🔥 TTM PAT Growth: +100%
📉 TTM Sales Growth: -6%
📦 Debtor Days: Improved from 80.4 → 39
🧾 Other Income FY24: ₹8.23 Cr

🤔 Translation: Profits are growing, but not because they sold more. It’s either better pricing, other income, or both.

🔍 Strategic Highlights

• Raised ₹73.2 Cr via IPO on June 4, 2025.
• Will use funds for:
  • 🏗️ Capex (hello Punjab!)
  • 🏢 New office
  • 🏦 Working capital
  • 🪙 General expenses (read: chai-samosa for board meetings)
• Value-Added Focus: Planning to make premium-grade bitumen:
  • PMB (Polymer Modified Bitumen)
  • CRMB (Crumb Rubber Modified Bitumen)
  • Target: highways, airports, high-performance infra.

📦 Also: Top 10 clients = 39.5% of revenue. These include:
Goel Petro Energy, MKC Infra, Maruti Bitumen, OFB Tech.

⚖️ Fair Value Estimate 🔍

Let’s assume FY25 PAT grows 30% → ~₹27 Cr
PE Band (Conservative SME Pack): 14–18x
Fair Value = ₹378 Cr – ₹486 Cr Market Cap
Shares Outstanding = ~2.27 Cr
🧮 Fair Value Range = ₹166 – ₹215

Current Price: ₹150
👀 Upside potential: 10% to 40% if FY25 delivers

📌 EduInvesting Take

Neptune is what happens when a 3-year-old firm tries to punch above its weight—and lands a decent jab.

• Zero debt ✅
• Insane ROCE ✅
• Underused plants ❌
• Bitumen boom tailwinds ✅
• Profit = possibly boosted by “Other Income” 🧐

This isn’t a scam. But it’s not a slam dunk yet either.
It’s like watching a Tata truck do a 0–60 in 3 seconds—you want to believe it, but you keep checking the engine.

🚩 Risks & Red Flags

🚨 Promoter Holding Dropped 25% in 1 quarter — Why tho?

📉 Sales fell YoY even before new capacity ramped up.

💸 Other income = 39% of PAT — recurring or fluke?

⚖️ Capacity Utilization Still Low — scaling without sweating

🔄 Heavy dependence on trading (76% of revenue) — volatile margins

🧠 Final Word

Neptune Petrochemicals isn’t your average SME fuel filler. It’s small, sharp, and weirdly efficient at turning ₹668 Cr sales into 119% ROCE. But low capacity usage and heavy “other income” flavor leave a slight aftertaste.

If the company delivers on premium bitumen, hits 40–50% utilization, and maintains margins — this ₹150 stock could hit cruise control at ₹200+.

Just don’t forget your helmet. It’s petrochemicals after all.

✍️ Written by Prashant | 📅 June 16, 2025
Tags: neptune petrochemicals, sme ipo, bitumen stocks, sme multibaggers, high roce stocks, ipo 2025