Excel Industries Ltd Q2 FY26 – The Curious Case of the ₹270 Crore Quarter and the Vanishing Profit Margin
At a Glance Something smells chemical — and it’s not just the Diethylthiophosphoryl Chloride (DETC). Excel Industries, the OG of phosphorous chemistry in India, just dropped its Q2 FY26 results, and our detective senses are tingling. Revenue stood at ₹270 crore (up a forgettable 0.49% YoY), while profit after tax tumbled 40.6% to ₹21.2 crore. The market didn’t clap either — the stock sits around ₹997, down nearly 40% in one year, as if investors discovered DETC also dissolves confidence.
The market cap, a modest ₹1,253 crore, gives it the aura of a retired genius who once solved big molecular mysteries but now mumbles to itself about “supply contracts” and “GST notices.” With a P/E of 17 and a Book Value of ₹1,438, the stock trades at just 0.69x book — a value trap, or a sleeping dragon in chemical form?
As the Bhagavad Gita reminds us, “Karmaṇy-evādhikāras te mā phaleṣhu kadāchana” — you have the right to do your duty, but not to its fruits. Excel did its chemistry. The market? It clearly didn’t taste the fruits.
1. Introduction – The Molecule Detective Chronicles
Once upon a phosphorous bond, Excel Industries was a respectable chemist’s paradise. Founded in a lab haze of the 1940s, the company became India’s DETC don — manufacturing organophosphorus compounds used in agrochemicals, pharma, and industrial cleaners. Think of it as a Sherlock Holmes with a pipette: precise, old-school, and occasionally mysterious.
But lately, the story’s got plot twists — product concentration risk (DETC is 40% of revenue), regulatory letters (GST notices worth ₹4 crore), and a market that’s slowly realizing “specialty chemicals” isn’t a synonym for “guaranteed returns.”
Still, Excel keeps its white coat on. It’s nearly debt-free (₹11 crore total debt), holds ₹1,800 crore in reserves, and operates from three plants — Roha, Lote, and Vizag — churning out molecules faster than Twitter churns finance influencers.
The capex story is interesting: ₹346 crore spent since FY19, now adding biocide and pharma API capacity. But will that translate into growth or just another chapter in the detective’s “Missing Margins” file?
2. Business Model – WTF Do They Even Do?
Excel Industries manufactures and sells chemicals, pharma intermediates, and environmental products. In short, it’s the chemical version of a tiffin service — everything from agro intermediates to detergents to gout APIs.
Core Divisions:
Chemicals (98%): Agrochemical intermediates like P₂S₅, PCl₃, DETC; phosphonates like HEDP and ATMP; and pharma APIs such as Febuxostat and Teneligliptin. If that sounded like a chemistry paper you failed in Class 12, don’t worry — it’s profitable when people buy it.
Environment & Biotech (2%): Composting machines (OWC), MSW projects, and bioculum. Basically, converting waste to wonder — or sometimes just waste to more waste.
They serve agrochemical and pharma majors — the two most mood-swinging sectors in India. One drought and the agro side sneezes; one USFDA inspection and the pharma side catches a fever.
Yet, Excel has a trump card — it’s one of the top 5 phosphonate producers globally. That’s like being among the top 5 magicians in a trick no one else understands.
3. Financials Overview – The Quarter of Vanishing Margins
Quarterly Comparison (₹ crore)
Source table
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
270
269
310
+0.49%
-12.9%
EBITDA
30
49
42
-38.8%
-28.6%
PAT
21.2
36
34
-40.6%
-37.6%
EPS (₹)
16.86
28.38
26.86
-40.6%
-37.2%
Annualised EPS: 16.86 × 4 = ₹67.44 → P/E ≈ 14.8× (fair, but not fabulous).
Commentary: This quarter was less “Breaking Bad,” more “Breaking Even.” Revenue barely moved, but profit melted faster than an ice cube in Roha’s reactor heat. Operating margin shrunk to 11%, down from the highs of 18% last year.
Detective Note 🕵️♂️: Either raw material prices are haunting them, or the company is spending too much energy chasing niche molecules that haven’t yet paid rent.
4. Valuation Discussion – The Case of the Fair Value Range
Let’s unpack this like a balance sheet autopsy.
P/E Method: Annualised EPS = ₹67.44 Industry P/E = 31.2 Company P/E (current) = 17 Fair Value Range = ₹67.44 × (18–25) = ₹1,214 – ₹1,686
EV/EBITDA Method: EV = ₹1,227 crore, EBITDA (TTM) = ₹134 crore → EV/EBITDA = 9.14× Industry average = 12× If re-rated to 12×, EV = 12 × 134 = ₹1,608 crore → Fair Value = ₹1,308/share
🎯 Fair Value Range (Educational Only): ₹1,200 – ₹1,600 per share. ⚠️ This fair value range is for educational purposes only and not investment advice.
5. What’s Cooking – News, Triggers & Drama
Excel’s latest press releases read like a detective’s diary of both glory and headaches:
New 5-Year Supply Term Sheet (Nov 2025): Estimated ₹35–40 crore annual revenue, ₹40 crore capex, and ₹25 crore advance already received. Sherlock translation: someone paid upfront — a rare sight in Indian B2B.
Capacity Addition: 11,500 MTPA new capacity under construction; biocide expansion approved for 2,530 TPA.
GST Notices: Two show-cause notices totaling ₹7 crore (the government’s way of
