1. At a Glance – Blink and You’ll Miss the Volatility
Paushak Ltd, the ₹1,288 Cr phosgene wizard from Gujarat, just delivered a quarter that looks like a chemistry experiment gone slightly wrong. Q3 FY26 revenue came in at ₹48.8 Cr, basically flat YoY, while PAT nose-dived 59.6% YoY to ₹6.17 Cr. Ouch. EPS for the quarter cooled off to ₹2.50, a far cry from the glory days when specialty chemical margins felt immortal.
The stock is currently chilling at ₹524, down ~23% in the last three months, and almost everyone who bought the “capacity expansion = automatic riches” thesis is now re-reading basic chemistry textbooks. Valuations? Still spicy. P/E ~35x, EV/EBITDA ~21x, despite ROCE slipping to 11.2% and ROE hovering around 9.8%.
Yes, this is still India’s largest phosgene-based specialty chemicals player. Yes, it’s backed by the Alembic lineage. But the latest numbers suggest Paushak is in a digestion phase, not a growth party. Question is simple: temporary indigestion or structural slowdown? Ready to put on your lab coat? Let’s dive in.
2. Introduction – From Phosgene Royalty to Market Mood Swing
Paushak isn’t your random chemical microcap that discovered “specialty” last Diwali. This company sits inside the Alembic Group, whose roots go back to 1907. That pedigree matters in a sector where one safety slip can shut down an entire plant and your stock price along with it.
Paushak’s claim to fame is phosgene chemistry – a niche, hazardous, high-entry-barrier segment that most players don’t even want to touch without three hazmat suits and a prayer. The company supplies critical intermediates to pharma, agrochemicals, dyes, plastics, perfumery, basically anything that smells like money but also smells… well, like chemicals.
For years, Paushak enjoyed a near-monopoly vibe. High margins, clean balance sheet, respectable growth. Then came capex. Big capex. Automated plants, multi-purpose derivatives, tripled phosgene capacity, and a
price tag that would make even CFOs sweat a little.
Now, FY25–FY26 is where the rubber meets the reaction vessel. Growth has slowed, margins are compressing, depreciation is climbing, and profits are no longer photogenic. The market hates transitions. So the stock corrected. Hard.
Is Paushak still a specialty compounder temporarily sulking? Or is it entering the boring phase where capital employed balloons faster than returns? Let’s dissect molecule by molecule.
3. Business Model – WTF Do They Even Do? (In Simple Human Language)
Paushak makes phosgene-based specialty chemicals. Translation for non-chemistry folks: it handles extremely toxic raw material to produce high-value intermediates that customers can’t easily source elsewhere.
Core Product Buckets
- Chloroformates
- Isocyanates
- Acid Chlorides
- Carbonates & Carbamates
These are not FMCG soaps. These are critical building blocks used by pharma innovators, agrochemical majors, and performance chemical companies. Once you’re qualified as a supplier, switching costs are high because:
- Safety approvals are painful
- Process chemistry is tightly guarded
- One mistake = regulatory nightmare
Geography
- Domestic: 78%
- Exports: 22%
So Paushak isn’t a pure export darling yet, but global customers audit its plants, which is a big credibility flex in chemical land.
Competitive Moat
- Phosgene handling capability (most players say “no thanks”)
- Long customer relationships
- Alembic ecosystem support
- High entry
