Leading Small-cap specialty chemical stock hit 20% upper circuit after robust Q3 results. The company saw an impressive 452% QoQ growth in net profits driven by recent government policy impact and revenue growth.
Share Price Movement
With a market capitalization of ₹1,224 Cr, the share of Gulshan Polyols opened at ₹176, and right after opening it hit the upper circuit at ₹197, up 20 % from yesterday’s close.
Q3FY25 Results
The company reported a 64 % YoY increase in revenue from ₹371 Cr in Q2FY24 to ₹609 Cr in Q3FY25. On a QoQ basis, the company reported an increase of 38.40 % in revenue from ₹440 Cr in the previous quarter.
Their Net profit too saw an upside with a 45 % YoY increase from ₹4.62 Cr to ₹6.74 Cr for the same period. And their net profits also saw an incredible increase of 452 % from ₹1.22 Cr for the same period.
EBITDA Margin increased from 3.72 % to 4.51 % but the Net profit margin reduced from 1.25% to 1.11% YoY.
Segment Analysis
The largest share of revenue for the company comes from the Ethanol / Distillery which accounts for 66% of total revenue then comes the Grain Processing division which accounts for 30% and Mineral Processing accounts for the other 4 %.
The largest share of the Operating profit for the company comes from the Ethanol / Distillery which accounts for 59 % of Operating profit then comes the Grain Processing division which accounts for 16% and Mineral Processing accounts for the other 25 %.
Recent Government Policy Impact
The Government of India reduced the reserve price of rice stored with the Food Corporation of India (FCI) by ₹550 per quintal for ethanol producers, cutting costs and reducing grain price inflation.
The Assam Government granted a Production Linked Incentive (PLI) of ₹2 per liter of bioethanol for the company’s 250 KLPD ethanol plant in Goalpara, effective for three years
Management Commentary
Management states that the recent reduction in FCI grain prices and the Assam Government’s PLI incentives will further enhance cost efficiencies and margins in the coming quarters.
The company is committed to strengthening its market leadership, optimizing margins, and creating long-term value for its shareholders. By strategic expansions, improved cost structures, and rising demand for biofuels and specialty chemicals.
Potential Recovery in the Chemical Industry
The chemical industry has been underperforming the market benchmarks for the past three years due to inconsistent global & domestic demand, and profit margin pressure because of high raw material prices.
However, there is significant potential for recovery driven by factors such as the China+1 strategy, government policies like PLI, fall in raw material prices, capacity expansions, and new product launches.
About the Company
Gulshan Polyols Ltd is India’s leading manufacturer of Ethanol/Biofuel, Grain, and Mineral-based specialty products with three decades of experience. Their business portfolio broadly spans three main segments, viz. grain processing, bio-fuel / distillery, and mineral processing operations that allow them to produce specialty products such as starch and starch derivatives including sorbitol, calcium carbonate, ethanol (bio-fuel), country liquor, agro-based animal feed.
Written By Abhishek Das
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