Chemicals & Petrochemicals
Valuation | |
|---|---|
| Market Cap | 5.43 kCr |
| Price/Earnings (Trailing) | 9.47 |
| Price/Sales (Trailing) | 1.71 |
| EV/EBITDA | 6.07 |
| Price/Free Cashflow | 18.59 |
| MarketCap/EBT | 7 |
| Enterprise Value | 5.45 kCr |
Fundamentals | |
|---|---|
| Revenue (TTM) | 3.17 kCr |
| Rev. Growth (Yr) | -8.9% |
| Earnings (TTM) | 569.5 Cr |
| Earnings Growth (Yr) | -31.1% |
Profitability | |
|---|---|
| Operating Margin | 24% |
| EBT Margin | 24% |
| Return on Equity | 15.66% |
| Return on Assets | 13.33% |
| Free Cashflow Yield | 5.38% |
Growth & Returns | |
|---|---|
| Price Change 1W | -4.9% |
| Price Change 1M | -6.8% |
| Price Change 6M | -4.2% |
| Price Change 1Y | -18.6% |
| 3Y Cumulative Return | 2.5% |
| 5Y Cumulative Return | 22.8% |
| 7Y Cumulative Return | 13.1% |
| 10Y Cumulative Return | 15.3% |
Cash Flow & Liquidity | |
|---|---|
| Cash Flow from Investing (TTM) | -357.66 Cr |
| Cash Flow from Operations (TTM) | 637.88 Cr |
| Cash Flow from Financing (TTM) | -230.32 Cr |
| Cash & Equivalents | 56.52 Cr |
| Free Cash Flow (TTM) | 322.99 Cr |
| Free Cash Flow/Share (TTM) | 33.62 |
Balance Sheet | |
|---|---|
| Total Assets | 4.27 kCr |
| Total Liabilities | 636.47 Cr |
| Shareholder Equity | 3.64 kCr |
| Current Assets | 1.91 kCr |
| Current Liabilities | 319.96 Cr |
| Net PPE | 1.81 kCr |
| Inventory | 556.09 Cr |
| Goodwill | 0.00 |
Capital Structure & Leverage | |
|---|---|
| Debt Ratio | 0.02 |
| Debt/Equity | 0.02 |
| Interest Coverage | 63.2 |
| Interest/Cashflow Ops | 45.89 |
Dividend & Shareholder Returns | |
|---|---|
| Dividend/Share (TTM) | 12 |
| Dividend Yield | 2.12% |
| Shares Dilution (1Y) | 0.30% |
| Shares Dilution (3Y) | 0.50% |
Summary of GHCL's latest earnings call, featuring management's outlook on business performance, financial results, and analyst Q&A sessions that highlight key strategic initiatives and market challenges.
Last updated:
The management of GHCL Limited provided an outlook highlighting their cautious approach due to current market dynamics in the soda ash industry. Key points include:
Market Conditions: The domestic soda ash demand has grown by around 5% year-to-date, but the market remains oversupplied due to high volumes of cheap imports, averaging 85,000 tons per month. This has led to pressure on realisations, causing a cautious price outlook for the next 1-2 quarters.
Antidumping Duty: A significant development is the recommendation for an antidumping duty on soda ash which is currently awaiting clearance from the Finance Ministry. This could potentially assist in mitigating the competitive pricing pressures from imports.
Global Dynamics: China's domestic soda ash demand has seen a year-on-year decline of approximately 2%, contributing to an oversupply in the global market. This has led to volatile prices, affecting realizations worldwide.
Cost Optimization: Despite challenging conditions, GHCL's focus on operational efficiencies and cost optimization is expected to sustain margins. The EBITDA for Q2 FY '26 was INR 175 crores, with an EBITDA margin of 23.8%, down from 27% in the same quarter last year.
Share Buyback Program: The management announced a buyback program of INR 300 crores, aiming to optimize capital structure and enhance shareholder value.
Expansion and Diversification Plans: GHCL is optimistic about future growth from new applications like solar glass, expected to ramp up demand starting next year. The bromine and vacuum salt projects are on track for commissioning in early Q4 FY '26 but may face slight delays.
Long-Term Vision: The Greenfield soda ash project is a strategic long-term investment that is progressing slower than anticipated, but efforts are underway to address these delays.
Overall, management remains confident in GHCL's ability to navigate current challenges and capitalize on long-term growth opportunities in India, particularly driven by renewable energy applications.
Last updated:
1. Question: Sir, I just wanted to know what was the volume loss that we had due to the shutdown that we had taken at the end of September?
Answer: The volume loss primarily occurred in the second quarter and will continue into October, significantly impacting our third quarter. We estimate the total volume loss to be around 21,000 to 22,000 tons.
2. Question: As you mentioned that we are going to commence our capex, what could be the contribution that we could expect in FY '27 from the bromine and vacuum salt plants?
Answer: We expect that the full benefits from both bromine and vacuum salt projects will materialize next year, potentially contributing around INR70 crores to INR80 crores in EBITDA with margins of about 40% to 45%.
3. Question: What is the decline in pricing year-on-year for us in soda ash?
Answer: The year-on-year decline in soda ash pricing stands at approximately 9%. This decline reflects the challenging market conditions, primarily due to increased cheap imports affecting realizations.
4. Question: Regarding the antidumping duty, could you clarify its impact on pricing in the domestic markets?
Answer: While we believe the antidumping duty will provide a level playing field, its exact impact is hard to quantify until we see how the market dynamics unfold post-approval from the Finance Ministry.
5. Question: What is the anticipated timeline for the Greenfield soda ash project?
Answer: The current timeline indicates that Phase 1 will likely be commissioned by the end of FY '28, pending land clearances and regulatory approvals, which we're actively working to resolve.
6. Question: Can you provide insight into the current realization and EBITDA per metric ton?
Answer: Our current realization per metric ton has declined by 9% year-on-year, with an EBITDA margin of approximately 24%, down from 28% in the same quarter last year.
7. Question: If anti-dumping duties are imposed, how will it affect our EBITDA?
Answer: The actual impact on EBITDA from anti-dumping duties remains uncertain until implemented. However, we anticipate a significant portion should enhance the bottom line if realizations improve.
8. Question: How do you plan to address the incremental soda ash demand in the domestic market?
Answer: We anticipate that Indian producers will ramp up their production to meet the rising demand, and any remaining gap will be fulfilled by imports, given that we project around 3 lakh tons of additional yearly demand.
9. Question: Given the global oversupply situation, how are you looking at your soda ash pricing strategy?
Answer: We remain cautious about pricing, expecting it to be under pressure in the short term due to global market dynamics. However, we are committed to cost optimization to navigate this challenging environment.
10. Question: Can you elaborate on your expected cash generation and buyback strategy?
Answer: We expect to generate INR500 crores to INR600 crores in annual cash flow, which supports our decision to initiate a buyback program of INR300 crores while continuing our strategic investments and providing returns to shareholders.
Understand GHCL ownership landscape with insights into key distribution patterns, offering investors a clear view of stakeholder dynamics.
| Shareholder Name | Holding % |
|---|---|
| Ares Diversified | 4.87% |
| Dsp Small Cap Fund | 4.21% |
| Arial Holdings 1 | 3.13% |
| Hindustan Commercial Company Limited | 3.07% |
| Gems Commercial Company Limited | 3.06% |
| J.P. Financial Services Pvt Ltd | 2.91% |
| Banjax Limited | 2.9% |
| Hexabond Limited | 2.83% |
| Oval Investment Private Limited | 2.69% |
| Varanasi Commercial Ltd. | 1.69% |
| Franklin India Small Cap fund | 1.51% |
| Lhonak Enternational Private Limited | 1.42% |
| UTI Large & Mid Cap Fund | 1.41% |
| Investor Education and Protection | 1.32% |
| Aarkay Investments Pvt. Ltd. | 1.31% |
| Dolly Khanna | 1.21% |
| Rajiv Kumar | 1.2% |
| Noble Communications Pvt Ltd | 1.17% |
| Ishares Core Msci Emerging Markets Etf | 1.03% |
| Atul Jain | 1.02% |
Distribution across major stakeholders
Distribution across major institutional holders
Detailed comparison of GHCL against industry peers, highlighting key financial metrics, valuation ratios, and performance indicators to provide competitive context within the sector.
Ticker | Name | Mkt Cap | Revenue | Price %, 1M | Returns, 1Y | P/E | P/S | Rev 1-Yr | Inc 1-Yr |
|---|---|---|---|---|---|---|---|---|---|
| TATACHEM | Tata Chemicals | 19.26 kCr | 15 kCr | -9.20% | -30.30% | 87.49 | 1.28 | - | - |
| GUJALKALI | Gujarat Alkalis & Chemicals | 3.7 kCr | 4.4 kCr | -8.90% | -35.00% | 25222.5 | 0.84 | - | - |
| DCW | DCW | 1.77 kCr | 2.05 kCr | -10.80% | -39.10% | 35.37 | 0.87 | - | - |
| SRHHYPOLTD | Sree Rayalaseema Hi-Strength Hypo | 914.37 Cr | 706.98 Cr | +1.20% | -32.50% | 10.24 | 1.29 | - | - |
Comprehensive comparison against sector averages
GHCL metrics compared to Chemicals
| Category | GHCL | Chemicals |
|---|---|---|
| PE | 9.64 | 23.12 |
| PS | 1.74 | 1.15 |
| Growth | -4.2 % | 4.9 % |
GHCL Limited, together with its subsidiaries, manufactures and sells inorganic chemicals in India and internationally. The company offers light soda ash, a basic industrial alkali chemical used in soap and detergents, pulp and paper, iron and steel, aluminum cleaning compounds, water softening and dyeing, in fiber-reactive dyes, effluent treatment, and chemicals products; dense soda ash for use in glass manufacturing, silicate, ultramarine, and other chemical industries; and refined sodium bicarbonate for use in food, food dyes, poultry and animal feed, leather tanning, fire extinguishers, vegetable cleaning, blasting of metals, manufacture of chemicals, pharma, deodorizers, and personal and oral care products. It also provides edible and industrial grade salt products. In addition, the company trades in various chemicals, such as sodium tripolyphosphate, sodium lignosulfonate, PVC resin, titanium dioxide, citric acid, EVA, flour and sand, kaolin clay, and borax pentahydrate. It sells its products under the LION, i-FLO, and Sapan brands. GHCL Limited was incorporated in 1983 and is based in Noida, India.
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GHCL vs Chemicals (2021 - 2025)