1. At a Glance
Welcome to Thirumalai Chemicals Ltd (TCL) — where chemistry isn’t just a science, it’s a mood swing. The ₹2,713 crore market-cap company closed Q2 FY26 at ₹265 per share, down over 8% in 3 months and 20% in a year, giving investors more acidity than its Malic Acid product.
Revenue for Q2 FY26 stood at ₹445 crore, down 15.2% YoY, and net loss widened to ₹33.4 crore. The company’s margins have melted faster than sugar in acid, with OPM slipping to –1.9% and PAT margin deep in red at –7.5%. Meanwhile, debt balloons have floated to ₹2,086 crore, courtesy of an ongoing ₹705 crore capex and a 40,000 TPA U.S. plant that’s still under construction.
With an ROE of –4.13% and a microscopic ROCE of 0.26%, Thirumalai Chemicals right now looks like it needs a caffeine shot stronger than its sulfuric acids. Promoter holding dropped 5.7% last quarter (ouch!), while the company raised ₹450 crore via preferential allotment at ₹277 per share to fund its U.S. dreams. Investors are asking — is this expansion chemistry, or just toxic leverage?
2. Introduction – The Acid Trip of FY26
Let’s start with a chemical reality check. Thirumalai Chemicals Ltd, one of India’s largest producers ofPhthalic Anhydride (PAN),Malic Acid,Fumaric Acid, andDiethyl Phthalate (DEP), has built its empire on molecules that make other industries shine — plastics, paints, foods, and fragrances. Ironically, it’s the one looking faded right now.
This is the same company that once flaunted 22% operating margins (FY22), but has since been smacked by commodity volatility, energy prices, and global demand stagnation. Imagine a chemistry topper who suddenly forgot the periodic table — that’s Thirumalai’s profit curve.
The FY24 margin collapsed to 2% (down from 9% in FY23), and now it’s chilling atnegativeterritory. Meanwhile, the management’s “expansion-first, profit-later” approach is in full swing, with a ₹705 crore Dahej capex and an ambitious U.S. greenfield plant underway.
And yet, there’s something oddly fascinating here — despite everything, the company keeps pushing. Maybe it’s blind optimism, maybe it’s a strategic masterstroke, or maybe it’s just…a lab experiment gone long-term.
3. Business Model – WTF Do They Even Do?
Thirumalai Chemicals is not your average paint-and-powder stock. It makes thestuffthat makes thestuff— the chemical backbone of everything from Asian Paints’ hues to Parle’s tangy candies.
Here’s a simple breakdown:
- Phthalic Anhydride (PAN)– The company’s bread and butter. Used in plasticizers, pigments, and resins. Basically, if it bends or shines, PAN had a hand in it.
- Malic Acid– Gives that tart kick to beverages and candies. Also used in skincare and metal cleaning. Fun fact: TCL is theonlyproducer of Malic Acid in Southeast Asia.
- Fumaric Acid– A workhorse used in food, pharma, resins, and animal feed. Thirumalai is thelargestproducer in India and Southeast Asia.
- Diethyl Phthalate (DEP)– Used to make plastics flexible, perfumes stable, and toothbrushes durable.
The company operates two manufacturing units —Ranipet and Dahej, with total capacity of 1,72,000 TPA, plus a Malaysian plant through a subsidiary.
So yes, they make acids, esters, and anhydrides — not the kind that burn through your hand, but maybe through your portfolio (temporarily, we hope).
4. Financials Overview
| Metric (₹ Cr) | Latest Qtr (Sep 25) | YoY Qtr (Sep 24) | Prev Qtr (Jun 25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 445 | 525 | 450 | –15.2% | –1.1% |
| EBITDA | –4 | 24 | –27 | –117% | 85% |
| PAT | –33.4 | 5 | –60 | –783% | –44% |
| EPS (₹) | –3.26 | 0.48 | –5.86 | –781% | 44% |
Annualized EPS = –3.26 × 4 = –13.04 → P/E not meaningful.
Commentary:TCL’s top line may have only slipped modestly, but the bottom line fell like a lead balloon. EBITDA is negative, profit is MIA, and the P/E ratio? Let’s just say it took early retirement. However, compared to the previous quarter’s ₹–60 crore loss, the ₹–33 crore loss
actually feels like progress — in the way losing less hair feels like regrowth.
5. Valuation Discussion – Fair Value Range (Educational Purpose Only)
Let’s play chemist and crunch a few educational numbers.
Assumption:Normalized annual EPS (in recovery year) = ₹10 (from FY22–23 historical average).
a) P/E Method
Industry median P/E ≈ 23.8→ Fair Value Range = ₹10 × 15 to ₹10 × 25 =₹150 – ₹250
b) EV/EBITDA Method
Current EV = ₹4,441 Cr; TTM EBITDA ≈ ₹–17 Cr (negative).So, realistic normalized EBITDA (using FY23 = ₹186 Cr):→ EV/EBITDA ≈ 24× currently.If it normalizes to 10× EV/EBITDA → fair EV ≈ ₹1,860 Cr → Equity Value ≈ ₹1,860 – ₹2,086 (debt) + ₹218 (investments) =₹–8 Cr (i.e., below book if profits don’t recover).
c) DCF Snapshot
Assuming 10% growth, 12% discount rate, and FCF normalization to ₹200 Cr in FY27:DCF suggests value range ₹2,200 – ₹2,800 Cr.
Educational Fair Value Range:₹200 – ₹275(Disclaimer: This range is for educational purposes only and not investment advice.)
6. What’s Cooking – News, Triggers, Drama
Ah, the Boardroom has been busy cooking — and not just acids.
In November 2025, Thirumalai approved apreferential allotment of 1.62 crore shares at ₹277, raising₹450 crore, followed by another₹56 crore issue at ₹296for its U.S. plant and working capital. That’s nearly ₹506 crore fresh equity, signaling “We’re serious about this capex, bro.”
But wait, the plot thickens:
- InOctober 2025, the companylost an appealover a ₹7.47 crore GST demand (though part was quashed).
- Key personnelretired(President – Food Ingredients bowed out in Oct 2025).
- Debt rose sharply post-ICRA downgrade review cycles in mid-2025.
Meanwhile, theU.S. greenfield projectfor Maleic Anhydride and food ingredients was announced in June 2025 — a strategic shift to tap premium global markets. So basically, while
1 thought on “Thirumalai Chemicals Ltd Q2 FY26: ₹445 Cr Sales, ₹–33 Cr Loss, Debt Hits ₹2,086 Cr — Is This Capex Hangover or a Chemistry Experiment Gone Wrong?”
Good evaluation but peer comparison is with wrong companies. The only one competitor is IG Petrochemical because both are manufacturing same products