GHCL Limited (NSE: GHCL)
GHCL Limited (NSE: GHCL) Equity Research Report | Q2 FY 2025 Performance Analysis
Company Overview GHCL Limited is a diversified Indian chemical company with primary focus on soda ash, sodium bicarbonate, and emerging interests in salt and bromine businesses. The company is strategically expanding its product portfolio and operational capabilities.
Financial Highlights – Q2 FY 2025 Key Metrics
Revenue: ₹3,245 crores (-19.8% Sales Growth)
Market Capitalization: ₹6,433 crores
Current Stock Price: ₹672
EBITDA: ₹228 crores (+2% YoY)
EBITDA Margin: 23.5% (Operating Profit Margin)
PAT: ₹530 crores
Profit Growth: -40.2%
Debt: ₹175 crores
Reserves: ₹3,078 crores
Cash Position: Net cash surplus of ₹861 crores
Stock Performance Metrics
52-Week High/Low: ₹727 / ₹435
Price to Earnings (P/E): 12.1
Book Value: ₹331
Dividend Yield: 1.79%
Return on Equity (ROE): 17.3%
Return on Capital Employed (ROCE): 20.6%
Face Value: ₹10
Number of Equity Shares: 9.58 crores
Key Financial Ratios
3-Year Sales Growth: 11.4%
3-Year Profit Growth: 21.8%
Change in Promoter Holding (3 Years): -0.03%
Dividend (Previous Annually): ₹167 crores
Operational Insights Soda Ash Business
Market Position: Experiencing bottom of the cycle
Volume Impact: Temporary loss of 7,000-8,000 tons due to maintenance
Global Dynamics:
European demand remains soft
China showing mixed signals with economic stimulus
Potential demand recovery expected in 2025
Emerging Business Segments Salt and Bromine
Current Salt Capacity: 0.8-1.0 million tons
Planned Expansion:
New land parcel will increase salt capacity to 3 million tons
Bromine capacity targeted at 15,000 tons
Aim to become fourth/fifth largest bromine producer in India
Solar Glass Opportunity
Demand Estimate: 15,000 tons of soda ash per gigawatt
Current Contribution: Insignificant
Future Potential: Significant growth expected in next 2-3 years
Strategic Initiatives Growth Strategies
Soda Ash
Two-phase greenfield expansion (5.5 lakh tons each phase)
Focus on domestic and nearby markets
Bromine
Developing bromine and bromine derivatives
Exploring strategic product portfolio expansion
Targeting significant market presence
Cost Optimization
Continuous focus on energy efficiency
Salt yield improvement program
100% captive salt consumption strategy
Risk Factors
Geopolitical uncertainties
Global economic slowdown
Potential delay in FGD (Flue Gas Desulfurization) projects
Volatile freight and import dynamics
Valuation Perspective
EBITDA per Ton Trend: Historically 8-9% CAGR
Current Valuation: Stable performance with potential upside
Trigger Points:
Demand recovery in Europe
US and South American market revival
Solar glass sector expansion
Investment Thesis
Strong operational efficiency
Diversification into high-potential segments
Robust balance sheet
Consistent cost management
Potential beneficiary of economic recovery
Recommendation BUY with a NEUTRAL-POSITIVE outlook Disclaimer: This report is based on management commentary and should not be considered financial advice. Investors are recommended to conduct their own due diligence.
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