1. At a Glance
Archean Chemical Industries Ltd — the bromine boss of Bharuch and industrial salt superstar — just reported its Q2FY26 results, and let’s just say the chemistry is losing some sparkle. The stock has tumbled -21% in the last three months, and FY26 is turning into a real acid test. The company’s Q2FY26 consolidated revenue stood at ₹233 crore, down 3.03% QoQ, while PAT nosedived 40.5% QoQ to ₹29.1 crore. That’s not just a slip — that’s bromine burning through profits.
At ₹541 a share, the company commands a market cap of ₹6,673 crore and trades at a P/E of 39.1×, a premium that screams “hopeium” rather than fundamentals. Its ROCE is 12.8% and ROE at 9.8%, both showing that even with all the chemistry, the reaction isn’t exothermic enough. Meanwhile, promoters hold 53.4% stake, with 12% of it pledged, making investors slightly nervous — because even the promoters are hedging their bromine bets.
The good news? Archean still remains India’s largest exporter of bromine and industrial salt, and one of the lowest-cost producers globally. The bad news? The cyclical salt game is turning soggy.
So, is Archean still a specialty chemical gem or a marine salt shaker pretending to be a semiconductor stock? Let’s dive in.
2. Introduction
Archean Chemical started as the salty kingpin of India’s marine chemicals — an exporter who made bromine cool long before chemistry memes existed. But 2025 hasn’t exactly been kind. With global bromine demand fluctuating, shipping costs rising, and competitors catching up, Archean’s once-sparkling margins are showing corrosion marks.
This fiscal year, the company tried to distract the market with a tech twist — announcing its SiCSem Private Limited subsidiary’s ₹2,067 crore compound semiconductor fab in Bhubaneswar, approved by the Union Cabinet in August 2025. On paper, that’s a bold diversification move; in reality, it’s a leap from bromine tanks to clean rooms. The question every analyst is asking: can a salt exporter really build silicon chips?
While the management is busy signing USD 12 million Offgrid Energy Labs investments and conducting bhoomi poojans for semiconductor fabs, the P&L quietly screams: profits down 40%, margins falling, and CRISIL revising outlook to “Stable → Negative.”
So yes, Archean’s investor story right now reads like a chemistry student suddenly enrolling in computer science — ambitious, but probably needs a lot of lab time.
3. Business Model – WTF Do They Even Do?
At its salty core, Archean Chemical Industries is India’s leading marine chemical manufacturer, producing bromine, industrial salt, and sulphate of potash (SOP). Its operations revolve around extracting minerals from brine reservoirs in the Rann of Kutch, then refining, processing, and exporting them to global customers.
Here’s how the business breaks down:
- Bromine – Used in flame retardants, pharmaceuticals, water treatment, and agrochemicals. Archean is India’s largest exporter, competing with global players like Israel Chemicals and Albemarle.
- Industrial Salt – Supplied to
- chemical and detergent manufacturers across Asia. Archean is again India’s biggest exporter, which is basically the marine equivalent of being the country’s “Salt Bae.”
- SOP (Sulphate of Potash) – A niche fertilizer used for high-value crops.
Now comes the twist: Archean has gone full sci-fi. Through SiCSem Private Limited, its step-down subsidiary, it’s entering the semiconductor materials business — focusing on Silicon Carbide (SiC) compound semiconductors. This venture got Union Cabinet approval for ₹2,067 crore in August 2025. The bhoomi poojan is done; now we wait to see if bromine cash can really fuel a chip dream.
So in short:
- Past = Marine chemicals.
- Present = Bromine exporter with declining margins.
- Future = “Make in India” semiconductor fab dreams.
A chemical company trying to play tech stock — what could go wrong?
4. Financials Overview
Quarterly Performance (Consolidated Figures in ₹ crore)
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 233 | 240 | 292 | -2.9% | -20.2% |
| EBITDA | 63 | 75 | 78 | -16.0% | -19.2% |
| PAT | 29.1 | 16.0 | 40.0 | +81.9% | -40.5% |
| EPS (₹) | 2.36 | 1.28 | 3.26 | +84.4% | -27.6% |
Commentary:
Archean’s Q2FY26 performance shows both chemistry and chaos. YoY, it looks decent — PAT doubled from ₹16 crore to ₹29 crore — but sequentially, things went downhill fast. EBITDA margins at 27% are far from the 51% glory days of FY23. If bromine prices don’t stabilize, Archean’s profitability could continue evaporating faster than seawater at its evaporation ponds.
5. Valuation Discussion – Fair Value Range
Let’s break it down with cold math (and a pinch of salt).
(a) P/E Based Method:
- Current EPS (TTM): ₹13.8
- Industry P/E: 28.6×
- Fair Value Range = 28.6 × ₹13.8 → ₹395 – ₹420 per share
(b) EV/EBITDA Method:
- EV: ₹6,902 crore
- EBITDA (TTM): ₹309 crore
- EV/EBITDA = 22.3× (premium to peers)
Assuming fair multiple of 15–17× → Fair Value = ₹465 – ₹525 per share
(c) DCF Snapshot (Conservative):
Using OCF of ₹176 crore (FY25), growth 8%, discount 12%, terminal 3% → ₹500–₹550 range
Educational Fair Value Range: ₹400–₹550 per share.
Disclaimer: This range is for educational purposes only and
