🟡 1. At a Glance
Archit Organosys Ltd (AOL) makes and trades chemicals like monochloroacetic acid (MCA), sodium chloroacetate, pigments, and recently… adhesives and sealants. The business is steady, the profits real — but barely exciting. With 10% OPMs, a P/E of 17.8x, and sub-₹100 Cr market cap, it’s the chemical cousin nobody invites to the multibagger party.
🎬 2. Introduction with Hook
“From Chemicals to Sealants: Archit Is Trying to Stick to Growth.”
Archit Organosys isn’t your typical fancy chemical stock.
No import-export buzz.
No mega expansion.
No 5000% profit growth slides on Twitter.
But it’s still… profitable.
✅ ROCE? 10.8%
✅ Promoter holding? Increasing steadily
❌ Growth? Meh.
❌ Moat? Hard to spot.
This is the stock equivalent of dal chawal with a side of sriracha — basic, but occasionally spicy.
🏭 3. Business Model – WTF Do They Even Do?
📦 Core Products:
– Monochloroacetic acid
– Sodium Chloroacetate
– Pigments and intermediates
– Adhesives & Sealants under AOL brand
💡 Use Cases:
– Agri-chemicals
– Oilfield drilling
– Surfactants & cosmetics
– Plastic additives
🛠️ Recent diversification: Sealants & Adhesives → Construction chemicals angle?
✅ B2B focus
🧪 Still largely commoditized product portfolio
📊 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | ₹95 Cr | ₹138 Cr | ₹128 Cr | ₹113 Cr | ₹126 Cr |
| Net Profit | ₹5 Cr | ₹8 Cr | ₹11 Cr | ₹3 Cr | ₹5 Cr |
| OPM % | 12% | 12% | 15% | 6% | 10% |
| ROCE | 12% | 18% | 17% | 4% | 11% |
| ROE | 3.3% | 4.0% | 6.0% | 1.6% | 7.6% |
📉 FY24 was a down year — margins and profit both dropped
📈 FY25 saw mild recovery
🧂 OPM back to double digits, but not consistent
💸 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹43.9 |
| P/E | 17.8x |
| EPS (FY25) | ₹2.46 |
| Book Value | ₹33.7 |
| P/B | 1.30x |
| Dividend | Nil |
| Market Cap | ₹90.1 Cr |
🎯 Fair Value Range: ₹35 – ₹50
→ Valuing it at 14–20x earnings
→ No dividend, low liquidity, niche business = discount
🧨 6. What’s Cooking – News, Triggers, Drama
📢 Q4 FY25 Profit = ₹2 Cr, best quarter in a year
📈 Promoter holding now 65.3% → rising every quarter
🔁 New CFO appointed in July 2025
💼 Adhesive vertical under AOL brand launched
🧾 SEBI compliant, no frauds or fancy restatements
🔮 No major trigger or order pipeline announced
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY21 | FY23 | FY25 |
|---|---|---|---|
| Debt | ₹30 Cr | ₹31 Cr | ₹28 Cr |
| Reserves | ₹26 Cr | ₹41 Cr | ₹49 Cr |
| Fixed Assets | ₹48 Cr | ₹50 Cr | ₹54 Cr |
| Total Assets | ₹87 Cr | ₹120 Cr | ₹123 Cr |
✅ Debt under control
🧱 Assets funded via equity & retained earnings
📉 Limited capex in FY25 = consolidation mode?
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹18 Cr | ₹-12 Cr | ₹-7 Cr | ₹-1 Cr |
| FY25 | ₹19 Cr | ₹-21 Cr | ₹-1 Cr | ₹-4 Cr |
– Consistent operational cash
– Investing ramped up in FY25 (adhesive biz?)
– No fundraising. No fancy rights issues.
📉 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 10.8% |
| ROE | 7.6% |
| OPM % (FY25) | 10.2% |
| Debt / Equity | 0.38x |
| Working Cap Days | 111 |
| Cash Conv. Cycle | -8 |
🟡 Middling efficiency
🟢 Debt is okay
🔴 ROE still below cost of equity
🧪 Not high-growth, but not dying either
📊 10. P&L Breakdown – Show Me the Money
| Quarter | Revenue | OPM % | PAT | EPS |
|---|---|---|---|---|
| Q1 FY25 | ₹27 Cr | 11.3% | ₹1 Cr | ₹0.49 |
| Q2 FY25 | ₹29.5 Cr | 9.6% | ₹1 Cr | ₹0.50 |
| Q3 FY25 | ₹25.9 Cr | 10.3% | ₹1 Cr | ₹0.49 |
| Q4 FY25 | ₹43.2 Cr | 10.2% | ₹2 Cr | ₹0.98 |
Growth mainly in Q4
→ Possibly stocking or export spike
→ Margin now stable near 10%
🧩 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | ROE | OPM | CMP/BV |
|---|---|---|---|---|---|
| GNFC | 13.8x | 9.6% | 7.0% | 7.8% | 0.96x |
| Deepak Fertilizer | 23.5x | 16.0% | 16.0% | 18.7% | 3.52x |
| GHCL | 9.9x | 24.2% | 18.6% | 27.5% | 1.69x |
| Archit Organosys | 17.8x | 10.8% | 7.6% | 10.2% | 1.30x |
🧯 Lower margins vs peers
🧠 ROCE decent, not stellar
🧊 Niche B2B chemical stock — less scalable
🕵️ 12. Miscellaneous – Shareholding, Promoters
| Category | Jun ’22 | Mar ’25 |
|---|---|---|
| Promoters | 57.4% | 65.3% |
| Public | 42.6% | 34.7% |
| Total Holders | ~8,400 | ~9,900 |
✅ Promoter confidence rising
📉 Public float shrinking
🧾 No FII or DII participation
🧠 13. EduInvesting Verdict™
Archit Organosys is a steady, smallcap chemical player —
✅ Clean accounts
✅ Decent promoter intent
✅ Adhesives play adds flavor
But let’s be honest:
– This isn’t Deepak Nitrite
– Growth is patchy
– No major moat or scale
🎯 Fair Value Range: ₹35 – ₹50
→ Based on core EPS of ₹2–2.5, 15–20x multiple, no hype buffer
Verdict: If you’re holding this stock… it won’t burn you. But it might just bore you.
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Archit Organosys, chemical smallcap, sealant business, monochloroacetic acid, SME stocks, value pick, EduInvesting
