GHCL Ltd Q3 FY26 – ₹4,500 Cr Capex, 91% Capacity Utilisation, EV/EBITDA 5.7x: Cyclical Pain, Balance Sheet Gain

1. At a Glance – Soda Ash King Having a Mid-Life Crisis (but with Cash)

GHCL is that classic Indian commodity story: boring product, sexy cash flows, and mood swings every time China sneezes. At a market cap of ~₹4,874 crore and a current price hovering around ₹530, the stock looks optically cheap with a P/E of ~9.6x, EV/EBITDA of ~5.7x, ROCE of 24%, and a balance sheet so clean it could audition for a detergent ad (net debt ~₹97 crore).
But don’t celebrate yet. FY24 was rough. Soda ash realizations crashed, revenue fell, profits slipped, and the stock punished investors with a ~24% one-year return. Q3 FY26 PAT dropped 37% YoY, reminding everyone that commodities giveth and commodities slap.

And yet—capacity utilisation is 91%, a ₹4,500 crore greenfield capex is underway, investments have ballooned to ₹420 crore, and the company just executed a ₹300 crore buyback at ₹725 like a rich uncle trying to calm the family WhatsApp group.

So what is GHCL right now?
A dying commodity dinosaur?
Or a cash-spitting cyclical monster in temporary depression?

Let’s audit this soda factory with chai, sarcasm, and spreadsheets.

2. Introduction – Soda Ash: Unsexy, Unavoidable, Unforgiving

GHCL makes soda ash, a product so boring that even Excel gets sleepy—but without it, glass, detergents, solar panels, and lithium batteries all cry in the corner. About 98% of GHCL’s standalone revenue comes from this one chemical. Diversification? That left the building when textiles were demerged and sold.

The company is the 2nd largest soda ash producer in India with a ~26% market share, selling to everyone from HUL and P&G to Saint-Gobain and Borosil. Basically, if you wash clothes, drink from glass, or believe in renewable energy—you’re indirectly funding GHCL’s boilers.

FY22–FY24 tells the cyclical story perfectly:

FY23: Commodity boom, fat margins, ROCE went beast mode.
FY24: Prices fell off a cliff, revenues down 25% YoY, margins sobered up.

GHCL didn’t panic. It cut debt, parked cash into investments, announced mega capex, and returned money via dividends and buyback. Very “experienced baniya uncle” behaviour.

But here’s the real question for you:
👉 Is GHCL value, or is it just cheap?

3. Business Model – WTF Do They Even Do?

Chemicals (98% of Revenue): Soda Ash, That’s It. Period.

GHCL manufactures:

Soda Ash (Light & Dense) – branded as Lion
Sodium Bicarbonate – baking soda’s industrial cousin

Manufacturing facility:

Sutrapada, Gujarat
Capacity: 1.2 MTPA soda ash + 0.12 MTPA sodium bicarbonate
FY24 utilisation: 91% (translation: plant is sweating)

Customers include FMCG giants, glass manufacturers, zinc producers, and anyone who needs alkaline chemistry to survive capitalism.

Consumer Products (2%): Salt, Honey, and Moral Support

Edible salt under I-Flo and Sapan, strong in South India.
Capacity: 0.1 MTPA
Growth: +46% revenue (FY22–FY24)
Contribution: Still pocket change.

This segment exists to tell investors: “Dekho bhai, FMCG bhi hai.”

Textiles: RIP (Respectfully)

Once 24% of revenue in FY22, now history.

Vapi home textiles sold for ₹630 crore
Yarn business demerged into GHCL Textiles Ltd

Capital recycling 101. No nostalgia, only cash.

4. Financials Overview – Numbers Don’t Lie, But They Do Roast

Key Quarterly Comparison (₹ Crore)

Metric	Latest Qtr (Dec FY26)	YoY Qtr	Prev Qtr	YoY %	QoQ %
Revenue	757	779	721	-2.8%	+5.0%
EBITDA	159	230	157	-30.9%	+1.3%
PAT	106	168	107	-37.1%	-0.9%
EPS (₹)	11.53	17.59	11.11	-34.4%	+3.8%

Annualised EPS (Q3 rule):
Average of Q1, Q2, Q3 EPS × 4
≈ (15.00 + 11.11 + 11.53) / 3 × 4 ≈ ₹50

At ₹530, implied P/E ~10.6x.

Witty takeaway:
Margins fell faster than crypto influencers’ credibility, but volumes stayed steady. This is pricing pain, not demand

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