Sree Rayalaseema Hi-Strength Hypo: FY26 Results—All Profit, Half the Sales
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Revenue sank ₹199 Cr year-on-year—a 31% slide from FY24’s peak—but profit refused to fall in line. Net profit held flat at ₹90 Cr, matched almost identically to FY25.
The real story lives in the mix. Other income surged to ₹41 Cr, nearly half of what it earned two years prior, absorbing the sales cliff whole. A shrinking manufacturing base met a swelling balance sheet, and the company now wears the math of a business in transition. The 10 MW thermal plant walks toward the scrap yard. Exports doubled as a share of revenue, shifting geography while revenue gutted.
The market prices this at 9.5× earnings—well below peers and its own 5-year average of 8.88× (wait, that’s still lower).
Is this a liquidation-in-slow-motion, or a simplification that clears away the clutter?
2. Introduction
Sree Rayalaseema Hi-Strength Hypo was born in 2005 as a chemicals maker, planted in Andhra Pradesh. It sits at the intersection of three unrelated streams: industrial chemicals (calcium hypochlorite, bleaching powder, sulphuric acid), coal trading that it just paused, and power plants running at poor economics.
FY26 forced reckoning. In June 2024, founder T.G. Bharath stepped down; his daughter T.G. Shilpa Bharath took the chair as MD. Within months, the board shelved coal trading temporarily (“difficulties faced in marketing, fluctuations in prices”). On 14 August 2025—three months ago—that same board ordered the 10 MW thermal plant shut and sold, citing “economic viability.”
The resignation and the power plant shutter form a single arc: the company is editing its portfolio, not abandoning it.
3. Business Model: WTF Do They Even Do?
Three legs, only one built for distance.
Chemicals (69% of FY26 sales): Calcium hypochlorite dominates the mix at 48% of revenue, nearly doubling its share since FY22. This is the crown jewel—a specialty bleach used in water treatment. The company owns the first and possibly still the only Sodium Process plant in India for this product, a proprietary low-cost route they trumpet in filings. Bleaching powder, sulphuric acid (down to 12% of the mix from 24%), and newer plays like sodium methoxide and sodium metal fill the gaps.
The chemical segment shed ₹158 Cr in sales over four years, yet operating margins stay firm at 13% in FY26. Translation: cost discipline beat volume collapse.
Trading (3% of FY26): Coal brokerage. The company bought and resold coal. It stopped in May 2024. Why bother—volumes were tiny and commodity prices are a casino.
Power (5% of FY26): A 10 MW coal plant, soon to be ash. A 5 MW solar farm. Seven windmills in Tamil Nadu (11.25 MW). All three legs run on subsidy hope and merchant power volatility. The 10 MW plant alone bled into this year’s P&L; now it dies.
The model is shrinking, but shrinking toward its core.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY24
FY25
FY26
Revenue
866.0
637.8
667.0
EBITDA*
121.9
100.0
95.2
PAT
79.1
90.1
90.2
EPS
46.1
52.5
52.5
*EBITDA = PBT + Interest + Depreciation
The Arc: Sales fell 23% from FY24 to FY25, then stabilised—barely—in FY26 (up 5% YoY). Profit climbed despite this: FY25 net profit beat FY24 by ₹11 Cr even as revenue plunged by ₹228 Cr. The mechanic was simple: other income jumped from ₹11 Cr in FY24 to ₹36 Cr in FY25, then ₹41 Cr in FY26.
Other income means investment gains, interest on cash, and sundry. The company is drawing from its fortress balance sheet—not from operations.
Operating profit (PBT before other income and exceptional items) halved from ₹149 Cr in FY22 to ₹80 Cr in FY26. The chemicals business is thinner than it used to be.
Q1 FY26 (Jun 2025): Revenue ₹180 Cr, net profit ₹22 Cr. On annualisation
