1. At a Glance – The Chemical Comeback or Just One Good Quarter?
Kanoria Chemicals & Industries Ltd is currently trading at ₹78 with a market cap of ₹341 crore. In the last 3 months? Flat like yesterday’s soda — 0.08% return. Over 1 year? Down 11.8%. Over 3 years? Down 15.1%. So clearly, this isn’t a momentum darling.
Now comes the twist.
Q3 FY26 delivered ₹265.82 crore sales and ₹3.55 crore PAT. That’s a 47.4% jump in sales YoY and a 395% jump in quarterly profit. EPS for the quarter stands at ₹0.81.
Annualised EPS (Q3 rule: average of Q1, Q2, Q3 × 4)
Q1 EPS: -1.79
Q2 EPS: 21.39
Q3 EPS: 0.81
Average = ( -1.79 + 21.39 + 0.81 ) / 3 = 6.80
Annualised EPS = 6.80 × 4 = ₹27.2
At ₹78 CMP, implied P/E ≈ 2.87.
But wait — TTM EPS is ₹12.08. That gives a P/E of ~6.46.
So which one is real? And why did EPS swing from -₹8.33 in Mar 2025 quarter to +₹21.39 in Sep 2025 and then back to ₹0.81?
Also:
- ROCE: -2.33%
- ROE: -11.8%
- Debt: ₹327 crore
- Debt/Equity: 0.62
- Promoter holding: 74.39%
- Promoter pledge: 29.6%
- Price to Book: 0.64
Undervalued gem… or value trap wearing lab coat?
Let’s open the chemical drum and see what’s inside.
2. Introduction – The Comeback Kid with a Complicated Family
Kanoria Chemicals is not a startup story. It was incorporated in 1960. This company has seen more business cycles than your favourite uncle has seen election promises.
It manufactures industrial chemicals — formaldehyde, hexamine, phenolic resins, pentaerythritol — basically stuff that goes into infrastructure, textiles, electronics, explosives, and pharmaceuticals. Not glamorous. But essential.
Revenue mix FY23:
- Alco Chemicals – 43%
- Electronic Automotive – 46%
- Textile – 11%
So this isn’t just a chemical company. It’s also exposed to automotive electronics via Swiss subsidiary APAG Holding AG. It has textile operations in Ethiopia. And recently, it divested 100% stake in APAG.
Now here’s where it gets spicy.
Recent announcements show:
- Divestment of APAG via staged share transfer worth USD 19.37 million
- Equity raise of CHF 5 million earlier
- Sale of 13.79% shares in subsidiary for USD 2 million
- Board approval of ₹50 crore NCRPS to promoter
