At a Glance
Alkyl Amines Chemicals has grown sales to ₹1,572 Cr in FY25 with standalone net profit of ₹186 Cr and maintained 19% operating margins. ROCE/ROE stand at 19%/14%. Virtually debt-free, the stock trades at 61× earnings and 8.2× book. KMP include founder Yogesh Kothari (CMD) and CFO Sanjit Pandey.
1. Introduction with Hook
- From niche lab reagents to global specialty-amine powerhouse, Alkyl Amines has quietly become a kingpin in methyl, ethyl, and propyl amines.
- Yet at 61× P/E and 8× book, investors may be paying for chemistry magic that’s already baked in.
- Time to titrate: is this specialty chemicals firm still brewing upside or simply overshot?
2. Business Model (WTF Do They Even Do?)
- Core Products: Over 100 aliphatic amines and derivatives, serving pharma, agrochemicals, water treatment, and surfactants.
- Specialty Chemicals: Unique products like DMAHCL, Triethylamine, Diethylhydroxylamine, and sole global acetonitrile producer.
- Vertical Integration: Backward integration into raw-material sourcing and forward in-house R&D for custom amine solutions.
- Global Footprint: Exports to over 60 countries; manufacturing plants at Kurkumbh (Maharashtra) and Dahej (Gujarat).
3. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Sales (₹ Cr) | 1,242 | 1,542 | 1,683 | 1,441 | 1,572 |
| Net Profit (₹ Cr) | 295 | 225 | 229 | 149 | 186 |
| OPM (%) | 35% | 21% | 21% | 17% | 19% |
| ROCE (%) | 56% | 33% | 28% | 16% | 19% |
| ROE (%) | 57% | 45% | 46% | 29% | 14% |
- Sales Growth: Modest 10% CAGR over 5 years; high-margin base kept profit afloat.
- Profit Volatility: Net profits dipped in FY24 on volume pressure, rebounded to ₹186 Cr in FY25.
- Margins: Operating margins normalize around 19%—down from pandemic highs but healthy for specialty chemicals.
- Return Ratios: ROCE/ROE remain strong, though ROE halved as equity base rose with reserves.
4. Valuation – Is It Cheap, Meh, or Crack?
- Current P/E: 61.3× trailing EPS of ₹36.39.
- Price/Book: 8.15× book value of ₹274.
- Fair Value Range:
- Conservative (25–30× EPS): ₹910–₹1,090.
- Growth premium (35–40× EPS): ₹1,274–₹1,456.
- Takeaway: Even at the upper band, fair value under ₹1,500 implies current ₹2,234 price richly factors in dream growth.
5. What’s Cooking – News, Triggers, Drama
- New Specialty Plant: Dahej facility commissioned for advanced amines—could boost volumes by 15% in FY26.
- Derivatives Incident: Dec 2024 plant rupture at Kurkumbh; operations restored, but safety protocols under watch.
- Dividend Boost: Final dividend of ₹10/share (500%) recommended for FY25—28% payout.
- Credit Rating: CRISIL upgrade in May 2023 underpins strong balance sheet and liquidity.
6. Balance Sheet – How Much Debt, How Many Dreams?
- Total Liabilities: ₹1,789 Cr (up from ₹1,584 Cr) due to capex payables.
- Borrowings: Virtually nil (₹6 Cr) – “almost debt-free” status intact.
- Reserves: ₹1,392 Cr – cushion for future expansions.
- Net Debt/Equity: 0.00× – room for opportunistic M&A or shareholder returns.
7. Cash Flow – Sab Number Game Hai
| Activity | FY24 (₹ Cr) | FY25 (₹ Cr) |
|---|---|---|
| Cash from Operations | 275 | 263 |
| Cash from Investing (capex) | –121 | –196 |
| Cash from Financing | –140 | –49 |
| Net Cash Flow | +13 | +18 |
- Operating Cash: Strong and stable; converted ~17% of sales to cash.
- Capex: ₹196 Cr in FY25 mainly for Dahej and Kurkumbh expansions.
- Financing: Minor outflows as capex largely self-funded.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| Debtor Days | 66 | 56 | 54 |
| Inventory Days | 76 | 85 | 75 |
| Payable Days | 105 | 85 | 80 |
| Cash Conversion Cycle | 36 | 56 | 48 |
- Working Capital: Efficient receivables and payables management; CCC under 50 days—a plus in chemicals.
9. P&L Breakdown – Show Me the Money
- Revenue Mix FY25:
- Commodity Amines: 60%
- Specialty & Derivatives: 30%
- R&D/Custom Solutions: 10%
- Cost Structure:
- Raw Materials & Utilities: ~55%
- Employee Expenses: 8%
- Other Overheads: 18%
10. Peer Comparison – Who Else in the Game?
| Company | CMP (₹) | P/E | Mar Cap (₹ Cr) | ROCE (%) |
|---|---|---|---|---|
| Deepak Nitrite | 1,988 | 38.9 | 27,104 | 16.6 |
| Atul | 7,385 | 44.6 | 21,736 | 12.8 |
| Vinati Organics | 1,929 | 48.2 | 20,014 | 20.6 |
| Alkyl Amines | 2,234 | 61.3 | 11,422 | 18.7 |
- Takeaway: Alkyl Amines trades at ~1.5× peer P/E average despite similar returns—valuation premium demands sustained growth.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 72.0% (steadily holding).
- FIIs: 3.2%.
- DIIs: 2.2%.
- Public Float: ~22.5%.
- KMP:
- Yogesh Kothari – CMD & Founder
- Sanjit Pandey – CFO
12. EduInvesting Verdict™
Alkyl Amines’ fortress balance sheet, high returns, and debt-free status make for an enviable specialty-chemicals outfit. But with 10% sales CAGR, margin normalization, and a valuation north of 60× earnings, most growth is already priced in. Unless Dahej ramps volumes beyond projections, this molecular marvel may be better admired from the lab bench than bought at ₹2,234.
✍️ Written by Prashant | 📅 July 12, 2025
Tags: Alkyl Amines, Specialty Chemicals, Stock Analysis, EduInvesting Verdict
