1. At a Glance – Blink and You’ll Miss the Profits
Indokem Ltd is one of those companies that makes you rub your eyes twice. Founded in 1946, part of the old-money Khatau Group, selling dyes, sizing chemicals, auxiliaries, pigments… and somehow trading at a market cap of ₹2,047 Cr with FY25 sales of just ₹178 Cr and PAT of ₹5.33 Cr.
Let that sink in.
At a CMP of ₹734, the stock is sitting at a P/E of ~384, P/B of 32x, EV/EBITDA of 185, and an earnings yield of 0.43%. Meanwhile, Q3 FY26 numbers show ₹42.02 Cr revenue and ₹0.40 Cr PAT, with QoQ profit down ~45%. ROCE is 7.38%, ROE 5.21%, margins are thin, and cash flows are… polite, not powerful.
Yet the stock has delivered 439% return in one year. This is not valuation expansion; this is valuation gymnastics.
Is the market seeing a turnaround masterpiece, or is it just intoxicated by scarcity, legacy pedigree, and low float drama? Let’s put on the auditor’s glasses and go line by line.
2. Introduction – A 1946 Company Living in 2026 Valuations
Indokem is not a startup. It’s older than Indian independence. It has survived textile cycles, chemical booms, environmental crackdowns, and promoter reshuffles. Respect.
But longevity alone doesn’t justify a valuation that rivals specialty chemical leaders with 20–30% ROCE and fat margins. Indokem operates in textile chemicals and dyes, one of the most cyclical, price-sensitive, and environmentally regulated segments of chemicals.
The company’s recent narrative cocktail includes:
- Amalgamation with Refnol Resins
- A Bangladesh subsidiary
- Entry into digital textile printing
- MPCB closure… and restart
That’s a lot of drama for a company doing ₹40–45 Cr quarterly sales.
So the
big question:
Is Indokem quietly transforming into a niche specialty play, or is this a classic case of stock price sprinting far ahead of business fitness?
3. Business Model – WTF Do They Even Do?
Explaining Indokem is easy. Explaining its valuation is not.
Indokem manufactures and sells:
- Sizing chemicals – binders, softeners, lubricants, antistatic agents
- Textile auxiliaries – pretreatment, dyeing, finishing, printing
- Textile dyes – vat, reactive, sulphur, disperse, acid dyes
- Textile pigments – shade-specific fastness products
- Electrical capacitors – tiny side hustle, almost irrelevant
Customers come from denim, knits, woven fabrics, towels, garments—basically, if it wears clothes, Indokem wants to touch it chemically.
Capacity is 35,000 MTPA across 5 units near Mumbai, but utilization is clearly low. FY23 production numbers (dyes ~679 MT, sizing ~8,337 MT, auxiliaries ~2,704 MT) scream underused assets, not scale efficiency.
This is a volume + working capital business, not a high-moat IP machine. Pricing power is limited. Environmental compliance is mandatory and expensive. So margins stay thin.
Which again begs the question:
Why is the market behaving like this is the next Deepak Nitrite?
4. Financials Overview – Numbers Don’t Lie, But They Do Judge
Quarterly
