At a Glance
OCCL Ltd just dropped its Q1 FY26 numbers, and oh boy, the stock jumped nearly 5% as if it sniffed its own sulphuric acid fumes! Revenue hit ₹123 Cr (up 15% QoQ), EBITDA ₹27 Cr (sweet 21.7% margin), and PAT ₹13 Cr – not bad for a baby born in 2024. Promoters hold a firm 51.76%, FIIs barely touch 0.10% (maybe they’re allergic to sulphur), and the public’s slowly accumulating. At a ₹722 Cr market cap with a P/E of 20.9, OCCL is playing in the big-boy chemical league, rubbing shoulders with SRF and Deepak Fertilisers. The only thing hotter than its margins is its 1-year price rally of over 100%.
Introduction
Picture this: a one-year-old company already giving veteran chemical giants a minor identity crisis. OCCL Ltd, the new kid on the sulphur block, decided to enter the market with insoluble sulphur, sulphuric acid, and oleum – products so chemical they make chemistry professors smile and investors richer.
While others worry about market cycles, OCCL seems to just keep cranking the reactors. Revenue growth from ₹307 Cr (FY24) to ₹430 Cr (FY25) and now ₹123 Cr in just one quarter of FY26 means they’re on steroids (financially, of course). This is not just “growth”; it’s “you-blink-you-miss” kind of growth.
But is this sustainable? Or are we just sniffing sulphur fumes that cloud our judgment? Time to break down the company the EduInvesting way.
Business Model (WTF Do They Even Do?)
OCCL manufactures and sells insoluble sulphur, a critical raw material for the tyre industry (think Bridgestone, Michelin, Apollo – all need it). Add sulphuric acid and oleum to the mix, and you’ve got a chemical cocktail powering industries from rubber to fertilizers.
Their business thrives on:
- Sticky (literally) B2B contracts with tyre companies.
- Export opportunities as global tyre demand remains high.
- Integrated chemical operations that make competitors sweat over costs.
In short, OCCL sells stuff the world can’t do without, and as long as vehicles roll on tyres, they’ll roll in cash.
Financials Overview
Let’s talk numbers – the kind that make investors’ hearts race:
- Revenue (Q1 FY26): ₹123 Cr (up from ₹107 Cr in Q4 FY25)
- EBITDA: ₹27 Cr (margin 21.7%)
- PAT: ₹13 Cr (EPS ₹2.63)
- FY25 Revenue: ₹430 Cr | PAT: ₹35 Cr | ROE: 10.8%
Commentary: For a 2024-born company, this growth is chef’s kiss. Margins above 20% show they’re not just surviving, they’re thriving. Compare that to Chemplast or GNFC, and OCCL looks like the overachieving kid in the chemistry class.
Valuation
Time for the magic formula breakdown:
- P/E Method
- Current EPS (TTM): ₹6.9
- Industry P/E: ~25
- Fair Price = ₹6.9 × 25 = ₹172
- EV/EBITDA
- EV ≈ ₹722 Cr (Market Cap) + ₹62 Cr (Debt) – negligible cash ≈ ₹784 Cr
- EBITDA (TTM): ₹79 Cr
- EV/EBITDA = 9.9x → slightly under industry (SRF trades >20x)
- Fair Price ~ ₹165-175
- DCF (Conservative)
- Assume 12% growth, 15% discount rate → value range ₹160-180
🎯 Fair Value Range: ₹160 – ₹180
At ₹146, it’s not screaming cheap but definitely not overpriced.
What’s Cooking – News, Triggers, Drama
- Q1 FY26 Beat: Strong sequential growth, margin expansion.
- Capacity Expansion? Hints in last concall suggest upcoming brownfield projects.
- Export Push: Rising tyre demand overseas = potential forex joyride.
- Risks: Raw material price volatility and competition from SRF, Tata Chem.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 534 |
| Liabilities | 148 |
| Net Worth | 396 |
| Borrowings | 62 |
Remarks: Balance sheet as clean as a lab beaker. Debt is minimal, net worth healthy. If only my personal balance sheet looked like this.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 0 | -0 | 70 |
| Investing | 0 | 0 | 4 |
| Financing | 0 | 0 | -74 |
Remarks: Strong operating cash, financing outflow shows debt repayment. Cash flow game solid.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 10.8% |
| ROCE | 14.9% |
| P/E | 20.9x |
| PAT Margin | 8.1% |
| D/E | 0.15 |
Remarks: Ratios scream “Sexy”, not “Stressy”. D/E of 0.15 means low leverage risk.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 0 | 0 | 430 |
| EBITDA | 0 | 0 | 79 |
| PAT | 0 | 0 | 35 |
Remarks: FY23 & FY24 zeros because the company was just born. FY25 proves it can print cash.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| SRF | 15,048 | 1,431 | 63.9 |
| Tata Chemicals | 14,817 | 461 | 55.3 |
| GNFC | 7,892 | 597 | 13.4 |
| OCCL | 430 | 35 | 20.9 |
Remarks: OCCL is the small-cap underdog. At current P/E, it’s cheaper than SRF but has room to grow.
Miscellaneous – Shareholding, Promoters
- Promoters: 51.76% (strong control)
- FIIs: 0.10% (nearly absent)
- DIIs: 5.07%
- Public: 43.07%
Sarcastic Take: FIIs are missing out while retail slowly piles in. Promoters clearly confident – they’re not selling.
EduInvesting Verdict™
OCCL is that new student who just joined school, aced all tests, and already made it to the basketball team. In just over a year, it has gone from zero to ₹430 Cr revenue and maintains healthy margins. Its products have sticky demand (pun intended), its balance sheet is clean, and the management seems to know its chemistry.
SWOT Quickie:
- Strengths: Strong margins, essential product, low debt.
- Weaknesses: New player, execution risk.
- Opportunities: Export growth, tyre boom, capacity expansion.
- Threats: Raw material price swings, bigger competitors.
Final Word: OCCL is not just a stock; it’s a chemical experiment gone right. Hold your beakers, this one might bubble up more – but remember, in chemicals, even a small spill can stink.
Written by EduInvesting Team | 30 July 2025
SEO Tags: OCCL Ltd, Chemical Stocks, Insoluble Sulphur, Q1 FY26 Results
