At a Glance
Apcotex Industries, India’s latex and synthetic rubber specialist, posted Q1 FY26 with sales ₹376 Cr and PAT ₹19 Cr, a 29% YoY surge. Stock popped 2% to ₹428, but with a P/E of 38, investors are paying Michelin prices for MRF-level dreams. Margins stayed at a modest 10%, and growth came more from cost control than topline fireworks.
Introduction
Apcotex is what happens when chemistry nerds meet industrial demand – they make rubbers, latexes, and powders that end up in gloves, carpets, construction, and even your favorite tyres. The company is a steady performer, not a glamour stock. But high valuations mean even a small slip can deflate the rally faster than a punctured balloon.
Business Model (WTF Do They Even Do?)
- Products: Synthetic latex (styrene-butadiene, VP, nitrile) and synthetic rubber (nitrile, high-styrene).
- Applications: Paper coating, textiles, tyres, construction, gloves.
- Roast: They sell to industries that literally stick things together – but their own profit growth is struggling to stick.
Financials Overview
Q1 FY26 Highlights
- Revenue: ₹376 Cr (↑11.6% YoY)
- EBITDA: ₹39 Cr (EBITDA margin 10%)
- PAT: ₹19 Cr (EPS ₹3.7)
- ROCE: 12.8%
FY25 Snapshot
- Revenue: ₹1,431 Cr
- PAT: ₹58 Cr
- ROE: 10%
Comment: Revenue growth steady, but margins remain under pressure.
Valuation
- P/E Method – EPS FY25 ₹10.4; Sector P/E ~25 → FV ₹260
- Book Value Method – BV ₹107; fair P/B ~3x → FV ₹321
- EV/EBITDA – FY25 EBITDA ₹132 Cr; EV/EBITDA ~9x → FV ₹350
🎯 Fair Value Range: ₹280 – ₹340
CMP ₹428 looks overheated.
What’s Cooking – News, Triggers, Drama
- New CFO: Vivek Thakur appointed (effective July 30, 2025).
- Dividend: Healthy payout 47.2% historically.
- Trigger: Rising demand for nitrile latex from gloves and industrial segments.
- Headwind: Petrochemical price volatility can squeeze margins anytime.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 999 |
| Liabilities | 256 |
| Net Worth | 553 |
| Borrowings | 189 |
Remark: Strong net worth; borrowings creeping but manageable.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 121 | 40 | 85 |
| Investing | -179 | -20 | -29 |
| Financing | 71 | -13 | -44 |
Remark: Cash ops improving, but capex keeps liquidity tight.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 9.99% |
| ROCE | 12.8% |
| P/E | 37.9x |
| PAT Margin | 5.6% |
| D/E | 0.34 |
Remark: Sexy valuations, average returns.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,080 | 1,125 | 1,392 |
| EBITDA | 159 | 114 | 132 |
| PAT | 108 | 54 | 58 |
Remark: FY24 slump hurt profits; FY25 marginally better.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Pix Transmission | 589 | 113 | 18x |
| Tinna Rubber | 505 | 49 | 34x |
| Apcotex Industries | 1,431 | 58 | 38x |
| GRP Ltd | 548 | 28 | 43x |
Remark: Apcotex is pricey compared to peers with better ROCE.
Miscellaneous – Shareholding, Promoters
- Promoters: 58.23% (stable)
- FIIs: 0.5% (flat)
- DIIs: 1% (rising)
- Public: 40.3%
Observation: No major stake changes; institutional interest limited.
EduInvesting Verdict™
Apcotex is a niche player with a strong product portfolio, stable balance sheet, and healthy dividends. However, high P/E and stagnating profit growth make it a high expectation stock. The company needs margin expansion or volume-driven growth to justify its premium.
SWOT Quickie
- Strengths: Niche market, diversified applications, strong dividend.
- Weaknesses: High valuation, slow profit growth.
- Opportunities: Global nitrile demand, capacity expansion.
- Threats: Raw material volatility, competition from imports.
Final Word: At CMP ₹428, Apcotex is a hold for believers, avoid for bargain hunters.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Apcotex Industries Q1 FY26 Results, Synthetic Rubber Stocks, Latex Industry Analysis
