1. At a Glance
If chemistry could talk, BASF India Ltd would sound like a polite German professor teaching in a noisy Mumbai classroom — structured, disciplined, and slightly frustrated. At ₹4,395 per share and a market cap of ₹19,034 crore, the company just reported Q2 FY26 results that made even stoic analysts sigh: revenue of ₹3,904 crore (down 8.09% YoY) and PAT of ₹101 crore (down 21%).
The company’s P/E ratio stands tall at49.5x, higher than its industry’s 28.6x — a sign that either investors love the BASF brand more than their own logic, or they expect miracles from polyurethane. Return on capital employed (ROCE) sits pretty at18%, while the debt-to-equity ratio is a feather-light0.04— almost too clean for an Indian chemical company.
But behind that neat balance sheet lies a storm of corporate experiments: a demerger of its Agricultural Solutions business, a €7.7 billion global coatings spin-off with Carlyle and QIA, and Price Waterhouse dropping its resignation letter like a hot flask in May 2024.
So yes — Q2 may be down, but drama is up.
2. Introduction
Every Indian investor knows one universal truth — if something’s German, it’s efficient; if it’s chemical, it’s volatile; and if it’s listed, it’s confusing. BASF India ticks all three boxes with the precision of a chemistry lab timer.
The company’s parent, BASF SE, is a €59 billion global giant with its hands in everything from crop protection to fragrance chemistry. Its Indian subsidiary, however, is a compact version trying to mix six different business segments in one beaker — Materials, Chemicals, Nutrition & Care, Industrial Solutions, Surface Technologies, and Agricultural Solutions. In other words, it’s like watching one student attempt physics, biology, and economics in a single exam.
The last few quarters have been a roller coaster — sales growth flatlining, profit margins swinging between 2% and 8%, and every quarter’s OPM behaving like a seesaw. Add to that the Agricultural Solutions demerger (13.6% of turnover) and a coatings business transfer to a wholly owned subsidiary — and you’ve got the corporate version of a chemical reaction gone slightly exothermic.
Yet despite all that, BASF India still commands a premium valuation, thanks to its brand, parent support, and the market’s blind belief in “German precision.” But how long can this lab experiment hold before the test tubes crack? Let’s find out.
3. Business Model – WTF Do They Even Do?
Let’s simplify BASF India’s chemistry soup:
- Materials (23% of revenues)– This is the “plastic fantastic” arm: polyurethanes, engineering plastics, and specialty materials that go into cars, packaging, and buildings. Basically, everything you see, touch, or accidentally step on.
- Nutrition & Care (25%)– The nice-smelling part of BASF. It makes personal care ingredients, home cleaning agents, and food & pharma nutrition products. Essentially, it’s responsible for your soap’s foam and your vitamin tablet’s stability.
- Chemicals (18%)– The backbone of everything BASF does — petrochemicals, intermediates, and acrylic monomers. If it smells industrial, this is where it came from.
- Agricultural Solutions (15%)– The segment that’s now being demerged — makers of herbicides, fungicides, and insecticides. In short, they keep crops alive when everything else dies.
- Industrial Solutions (15%)– The dispersions, resins, and additives gang. Think of this as the “glue” that keeps industries (and balance sheets) sticking together.
- Surface Technologies (4%)– Catalysts for refining, petrochemicals, and coatings. Basically, stuff that makes your car shiny and your refinery cleaner.
Now, imagine running all that in India’s regulation maze while juggling imports, currency swings, and environmental compliance. The company’s management deserves an award — or a nap.
4. Financials Overview
Quarterly Comparison Table (₹ crore):
| Metric | Q2 FY26 | Q2 FY25 | Q1 FY26 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 3,904 | 4,248 | 3,752 | -8.09% | 4.05% |
| EBITDA | 154 | 201 | 222 | -23.38% | -30.63% |
| PAT | 101 | 128 | 147 | -21.09% | -31.29% |
| EPS (₹) | 23.34 | 29.56 | 34.00 | -21.09% | -31.29% |
EPS annualized = ₹23.34 × 4 = ₹93.36 → P/E ≈ 4,395 / 93.36 = 47.1x (close to reported 49.5x).
Commentary:The top line dipped
slightly, but margins were the real casualty. BASF’s quarterly performance looks like a monsoon forecast — unpredictable, cloudy, and occasionally shocking. Profit after tax dropped 21% YoY, signaling weak demand across segments, especially in agri and materials. The EPS fall isn’t catastrophic, but when your P/E is nearly double the industry median, every small miss feels like a chemical burn.
5. Valuation Discussion – Fair Value Range
Let’s brew this valuation potion carefully:
(a) P/E Method:Industry P/E = 28.6Company EPS (annualized) = ₹93.36→ Fair Value Range (P/E 25–35) = ₹2,334 – ₹3,268
(b) EV/EBITDA Method:EV/EBITDA = 27.3If we assume normalized EBITDA ₹750 crore (FY25), then:→ EV = ₹20,475 crore→ EV/EBITDA Fair Range (20x–25x) = ₹15,000 – ₹18,750 crore→ Market Cap Fair Range ≈ ₹3,800 – ₹4,700/share
(c) DCF Approach (Simplified):Assuming free cash flow of ₹400 crore, growth 5%, and discount rate 12%:Intrinsic Value ≈ ₹4,000–₹4,300
✅Educational Fair Value Range:₹3,200 – ₹4,500 per share
Disclaimer:This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
The BASF India news cycle this year has been hotter than its chemical reactors:
- Agricultural Solutions Demerger:In May 2025, BASF India announced the demerger of its agri business (13.6% of turnover) into a separately listed company. It’s like breaking up a joint family to reduce dinner table noise.
- Carlyle & QIA Coatings Deal (€7.7 billion):The global parent sold its coatings business to Carlyle Group and Qatar Investment Authority but retained a 40% stake — corporate chemistry at its finest.
- Price Waterhouse Resignation (May 2024):The auditors decided to drop the mic and walk out. “Creative differences,” perhaps? BASF replaced them quickly, but it sure raised eyebrows.
- Clean Max Amalfi Renewable JV:In July 2025, BASF India acquired 26% in a renewable energy project for ₹65.9 million. Green energy to power blue chemicals — poetic, right?
- GST Litigation:A ₹55.5
