1. At a Glance
Aether Industries just posted a decently cooked Q1 FY26 — sales grew, OPM crossed 32%, and net profit came in at ₹40 Cr. But wait — while the earnings sizzled, promoters mysteriously cut stake from 81.77% to 74.99%. Are they confident? Or just liquidating in style?
2. Introduction with Hook
Imagine a chemical company with margins slicker than your hair gel and a P/E ratio more inflated than your mutual fund’s brochure. Now add 3 business lines, a management obsessed with CRAMS, and sprinkle in promoter stake sales.
Welcome to Aether Industries — India’s homegrown specialty chemical marvel with Bollywood-style drama and Silicon Valley pricing.
Key FY26 Q1 stats:
- Revenue: ₹214 Cr (up 33% YoY)
- PAT: ₹40 Cr (flat YoY, but better than last quarter)
- OPM: 32% (finally recovering after last year’s freefall)
3. Business Model (WTF Do They Even Do?)
Aether’s business model is like a thali plate — you get a bit of everything:
- Large Scale Manufacturing (59%)
- Advanced intermediates sold to pharma, agrochem, and coatings industries.
- Think: high volumes, medium margins, global clients.
- Contract Manufacturing (26%)
- Manufacturing for large MNCs on a long-term basis.
- Think: “you bring the formula, we make the magic.”
- CRAMS (14%)
- Low-volume, high-value, niche research-based products.
- Think: nerdy chemical R&D in a lab with good lighting.
Basically, they’re the guy at the chemical party who does everyone’s homework — and then bills them for it.
4. Financials Overview
| Quarter | Revenue | EBITDA | PAT | OPM | EPS |
|---|---|---|---|---|---|
| Q1 FY25 | ₹161 Cr | ₹45 Cr | ₹30 Cr | 28% | ₹2.28 |
| Q4 FY25 | ₹215 Cr | ₹67 Cr | ₹43 Cr | 31% | ₹3.24 |
| Q1 FY26 | ₹214 Cr | ₹69 Cr | ₹40 Cr | 32% | ₹3.03 |
Commentary:
- Back-to-back quarters with over 30% margins. Not many smallcaps can say that.
- PAT growth YoY was flat, but sequentially strong.
- And yes, this is their best margin since FY23.
5. Valuation
Fair Value Estimate:
| Method | Assumption | FV Range |
|---|---|---|
| P/E | 40x FY26E EPS of ₹12 | ₹480 – ₹520 |
| DCF | 12% CAGR, 9% discount | ₹850 – ₹950 |
Current Price: ₹808
P/E: 62.8
Book Value: ₹168 → P/B = 4.8x
Verdict:
“If you think paying 63x for a chemical company is sane, you probably also pay for airport WiFi.”
6. What’s Cooking – News, Triggers, Drama
- Promoters shaved off ~7% stake between Mar and Jun 2025. From 81.77% → 74.99%.
- Q1 FY26: Best OPM in 6 quarters.
- NSE fine for some “technical non-compliance.” (Classic… even auditors forget Zoom passwords.)
- 13th AGM scheduled for Sept 12.
- Cash from ops turned positive for the first time in 4 years: ₹118 Cr in FY25.
Plot twist potential: high.
7. Balance Sheet
FY25 Standalone Snapshot (₹ Cr):
| Item | Amount |
|---|---|
| Equity | ₹133 Cr |
| Reserves | ₹2,093 Cr |
| Borrowings | ₹137 Cr |
| Total Liabilities | ₹2,561 Cr |
| Net Block | ₹995 Cr |
| CWIP | ₹333 Cr |
| Investments | ₹100 Cr |
Takeaways:
- Nearly debt-free.
- CWIP ballooned — someone’s building a new lab or probably a helipad.
- Networth is strong, but inventory + receivables still bloated.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹-7 Cr | ₹-348 Cr | ₹439 Cr | ₹84 Cr |
| FY24 | ₹-2 Cr | ₹-399 Cr | ₹854 Cr | ₹453 Cr |
| FY25 | ₹118 Cr | ₹-415 Cr | ₹-19 Cr | ₹-316 Cr |
Commentary:
- Operating cash flow finally flipped green.
- But investing cash flow is still burning hot — expansion mode ON.
- Net cash flow down ₹316 Cr — this company spends money like a crypto influencer in Dubai.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 10% |
| ROE | 7.49% |
| OPM | 30% |
| D/E | 0.06 |
| P/E | 62.8 |
Verdict:
- ROCE is okay-ish. ROE needs vitamins.
- Debt low, margins high. Valuation? Still nosebleed territory.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹651 Cr | ₹186 Cr | ₹130 Cr |
| FY24 | ₹596 Cr | ₹131 Cr | ₹88 Cr |
| FY25 | ₹789 Cr | ₹225 Cr | ₹152 Cr |
| TTM | ₹823 Cr | ₹251 Cr | ₹162 Cr |
Commentary:
FY24 was a hiccup year. FY25 bounced back. But PAT still not at peak comfort. EPS at ₹11.47 now.
11. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E | OPM | ROE |
|---|---|---|---|---|---|
| Deepak Nitrite | 8,282 | 697 | 37.6 | 13% | 13.7% |
| Navin Fluorine | 2,349 | 289 | 90.2 | 22% | 11.5% |
| Vinati Organics | 2,248 | 415 | 47.4 | 26% | 15.8% |
| Aether Industries | 823 | 162 | 62.8 | 30% | 7.5% |
Aether has better margins but lags on ROE. High P/E suggests “priced for perfection” — just one mishap and… BOOM.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | Mar 2025 | Jun 2025 |
|---|---|---|
| Promoters | 81.77% | 74.99% |
| FIIs | 3.33% | 5.03% |
| DIIs | 11.43% | 13.41% |
| Public | 3.47% | 6.55% |
Red flag: Promoter holding dropped ~7% in one quarter.
Green flag: FIIs and DIIs scooped up the slack like desi aunties at a Big Bazaar clearance sale.
13. EduInvesting Verdict™
Aether Industries is the nerdy chemist in the specialty sector — brilliant formulas, big expansion plans, but slightly awkward in execution.
Margins are elite. Growth is visible. But at 63x earnings? You’re paying designer-brand price for lab coat chic.
Solid business. Great margins. Valuation? Let’s just say it needs a sedative.
Metadata:
Written by EduInvesting Team | 24 July 2025
Tags: Aether Industries, Specialty Chemicals, Q1 FY26, Promoter Stake Cut, EduInvesting Premium
