At a Glance
Aether Industries, the chem bro with 15 MW solar panels and 122 Debtor Days, plays in three segments: Large Scale Manufacturing, Contract Manufacturing, and CRAMS. It’s got innovation in the lab, but valuations that would make even Pidilite flinch. Is it truly “specialty,” or just “expensive”?
1. 🚀 Introduction with Hook
Some companies are boring.
Some are volatile.
Aether? It’s the Elon Musk of Indian specialty chemicals—ambitious, erratic, and oddly solar-powered.
- From zero to ₹800 Cr+ in 10 years
- From CRAMS to global deals (Baker Hughes, SEQENS, Milliken)
- From profits to… well, working capital chaos 😵
Let’s break it down before the next solar plant is commissioned.
2. ⚗️ WTF Do They Even Do?
👨🔬 Business Segments (FY24):
- 💊 Large Scale Manufacturing (59%)
– Produces specialty molecules like 4MEP, MMBC, OTBN. Think niche pharma and agri chemicals. - 🤝 Contract Manufacturing (26%)
– Supplies MNCs under long-term agreements. Milliken, Baker Hughes are on the list. - 🧪 CRAMS (14%)
– Research + pilot + scale-up services for global clients.
Also:
- Just commissioned 25 MW of solar 🌞
- Buying land like it’s Monopoly
- And yeah, new subsidiary launched: Aether Specialty Chemicals
3. 📈 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹651 Cr | ₹596 Cr | ₹789 Cr |
| PAT | ₹130 Cr | ₹88 Cr | ₹152 Cr |
| OPM | 29% | 22% | 29% |
| ROE | 10.5% | 6.6% | 7.5% |
| ROCE | 18% | 8% | 9.9% |
📉 FY24 was a growth holiday
📈 FY25 = bounce back with decent margins
But look at those ROE/ROCE numbers…
It’s giving: “Valuation hai, return nahi.”
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹794
- Market Cap: ₹10,500 Cr
- EPS (TTM): ~₹11.5
- P/E: 65+
- P/B: 4.7
- ROE: ~7.5%
🎯 Fair Value Range: ₹350–₹500 (Assuming normalized EPS of ₹15–18, P/E of 25–30)
Unless you think it’s the next Navin Fluorine + Solar ETF hybrid, this is rich.
5. 🔥 What’s Cooking – News, Triggers, Drama
- ✅ Milliken Deal: Long-term CMO contract for Site 3+. Volume ramp-up already visible.
- 🔬 Baker Hughes: Strategic supply deal extended and amended. Repeat business!
- 🏭 15-acre land acquisition for capacity expansion.
- ☀️ 25 MW solar commissioned to offset energy costs.
- ⚠️ GPCB Closure Notice Drama – Resolved in Jan 2025, but operations were briefly halted.
They’re playing chess… but Gujarat Pollution Board is playing ludo sometimes.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹125 Cr | ₹133 Cr | ₹133 Cr |
| Reserves | ₹1,120 Cr | ₹1,936 Cr | ₹2,093 Cr |
| Borrowings | ₹16 Cr | ₹144 Cr | ₹137 Cr |
| Total Assets | ₹1,380 Cr | ₹2,356 Cr | ₹2,561 Cr |
⚖️ Leverage creeping back
🧱 Fixed Assets + CWIP ~₹1,300 Cr = Expansion is real, but payback?
7. 💰 Cash Flow – Sab Number Game Hai
- FY24 Op Cash Flow: ₹–2 Cr
- FY25 Op Cash Flow: ₹118 Cr
- Capex Burn: ₹400+ Cr in FY25 😵💫
- Net Cash Flow FY25: –₹316 Cr
If you were wondering how to make ₹800 Cr revenue disappear, Aether has a masterclass.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| OPM | 29% |
| ROE | 7.5% |
| ROCE | 9.9% |
| Debtor Days | 122 |
| Inventory Days | 341 |
| CCC (Cash Conversion Cycle) | 363 Days 😬 |
They sell fast science, but get paid in slow motion.
That CCC > 300 days is not cute.
9. 💵 P&L Breakdown – Show Me the Money
- Revenue: ₹789 Cr
- Operating Profit: ₹225 Cr
- Other Income: ₹32 Cr
- Net Profit: ₹152 Cr
- EPS: ₹11.47
Nice margin story.
But working capital is sucking the soul out of profits.
10. 🧠 Peer Comparison – Who Else in the Game?
| Peer | P/E | ROE | OPM | Market Cap |
|---|---|---|---|---|
| Navin Fluorine | 84 | 11.5% | 22.7% | ₹24,000 Cr |
| Deepak Nitrite | 39 | 13.7% | 13.1% | ₹27,000 Cr |
| Vinati Organics | 50 | 15.8% | 26% | ₹21,000 Cr |
| Aether | 65 | 7.5% | 29% | ₹10,500 Cr |
Aether has better margins than Vinati, but worse ROE than your bank FD.
11. 📦 Miscellaneous – Shareholding, Promoters, etc.
| Category | Stake |
|---|---|
| Promoters | 81.77% (very high) |
| FIIs | 3.33% |
| DIIs | 11.43% |
| Public | 3.47% |
Retail is almost absent. This one’s an institutional playground with DII/PE interest.
12. 🌐 EduInvesting Verdict™
Aether is building something big:
- Long-term contracts = recurring revenue 💵
- Solar investments = ESG brownie points 🍀
- Margin profile = premium-worthy 🧠
But…
- Cash flows = bad
- ROE = weak
- Valuation = premium++
- Working capital = chaos
🎯 Fair Value = ₹350–₹500
At ₹794, you’re pricing perfection.
And chemistry, dear Watson, is rarely perfect.
✍️ Written by Prashant | 📅 8 July 2025
Tags: Aether Industries, specialty chemicals, CRAMS, solar capex, Milliken, Baker Hughes, Gujarat Pollution Board, contract manufacturing, SME to smallcap, high margin low return, PE-rich stock
