At a Glance
Archean Chemical posted Q1 FY26 revenue of ₹292 Cr (flat YoY) and net profit ₹52 Cr (down from ₹94 Cr a year ago). OPM shrank to 27%. The stock at ₹663 trades at a frothy P/E of 43. Investors expected fireworks; got a damp cracker.
Introduction
Picture a salt baron trying to juggle bromine barrels in a storm—that’s Archean this quarter. Sales barely moved, margins eroded, and profits fell 46% YoY. Despite cost advantages, the specialty chemical darling is showing cracks under price pressure.
Business Model (WTF Do They Even Do?)
Archean is India’s largest exporter of bromine and industrial salt.
- Products: Bromine, industrial salt, sulphate of potash.
- USP: Lowest cost globally in bromine & salt production.
- Markets: Exports to 13+ countries.
Roast: They dig salt out of the sea but can’t seem to season their earnings.
Financials Overview
- Revenue (Q1 FY26): ₹292 Cr (↓37% from peak)
- Net Profit: ₹52 Cr (↓46% YoY)
- OPM: 27% (vs 33% last year)
- ROE: 9.8%
- ROCE: 12.8%
Verdict: Profitable but losing edge.
Valuation
- P/E: 43×
- CMP/BV: 4.4×
- Fair Value Range: ₹520–₹650
DCF says “meh”, market says “premium”.
What’s Cooking – News, Triggers, Drama
- Strategic investments in semiconductor and energy storage—diversification or distraction?
- Corporate guarantee ₹35 Cr for subsidiary.
- Debt rising—borrowings at ₹235 Cr.
- Earnings call scheduled today; expect salt-and-pepper Q&A.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 1,755 | 2,055 | 2,389 |
| Liabilities | 1,755 | 2,055 | 2,389 |
| Net Worth | 1,431 | 1,702 | 1,864 |
| Debt | 69 | 98 | 235 |
Punchline: Leverage creeping up—watch your step.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 496 | 379 | 176 |
| Investing | -290 | -307 | -246 |
| Financing | -212 | -33 | 65 |
Snark: Cash flows look like a sandcastle—washed away quickly.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 20% | 25% | 10% |
| ROCE % | 45% | 25% | 13% |
| D/E | 0.05 | 0.06 | 0.13 |
Verdict: From hot to lukewarm—ratios cooling fast.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,441 | 1,330 | 1,041 |
| Net Profit | 383 | 319 | 162 |
Comment: Revenue drifted, profits halved. Ouch.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Pidilite | 13,140 | 2,093 | 70× |
| Deepak Nitrite | 8,282 | 680 | 37× |
| Atul | 5,739 | 500 | 40× |
| Archean | 1,121 | 157 | 43× |
Humour: Archean trades like a leader but performs like an underdog.
Miscellaneous – Shareholding, Promoters
- Promoters: 53.4%
- FIIs: 11% (rising)
- DIIs: 25%
- Public: 10.8%
FIIs smell opportunity, DIIs not so much.
EduInvesting Verdict™
Archean is still a low-cost bromine boss but profits are evaporating faster than seawater in Kutch. Strategic bets may pay off later, but current earnings are under pressure.
Final Word: Strong moat, weak boat. Hold your salt shaker tight.
Written by EduInvesting Team | 28 July 2025
SEO Tags: Archean Chemical, Bromine Export, Industrial Salt, Specialty Chemicals, Q1 FY26 Results
