Kothari Petrochemicals Ltd. (KOTHARIPET) AI Stock Analysis

• Market Cap: ₹6.98B
• Dividend Yield: 0.81%
• Average Volume (3M): 59.02K
• Price to Earnings (P/E): 10.6
• Beta (1Y): 1.72
• Revenue Growth: -4.92%
• EPS Growth: 1.29%
• Country: IN
• Employees: 177
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 3.13
• Shares Outstanding: 58,846,400
• 10 Day Avg. Volume: 56,625
• 30 Day Avg. Volume: 59,017
• PEG Ratio: 4.49
• Price to Book (P/B): 2.94
• Price to Sales (P/S): 1.56
• P/FCF Ratio: -35.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: ₹122.00 ▼(-1.25% Downside)

Kothari Petrochemicals Ltd. has a solid financial foundation with strong profitability and low leverage, but faces significant challenges with declining revenue and cash flow issues. The technical indicators suggest bearish momentum, which is a concern for potential investors. The valuation is reasonable, but the modest dividend yield may not appeal to income-seeking investors.

Positive Factors

Very low leverage

A debt-to-equity of 0.0098 signals minimal financial leverage and strong balance sheet resilience. Over 2–6 months this supports funding flexibility for working capital or selective capex, lowers default risk in cyclic petrochemicals, and preserves strategic optionality during feedstock volatility.

Solid profitability margins

A durable net margin of 11.4% indicates the business can convert sales into earnings effectively. For a specialty polymer supplier, sustained margins reflect pricing power across differentiated PIB grades and the ability to absorb input cost swings, supporting long-term cash generation if revenue stabilizes.

Niche, recurring end-market demand

Supplying PIB to lubricant additives, adhesives and sealants creates recurring, industrial customer demand that is structurally driven. Specialty polymer status and qualification requirements raise customer switching costs, supporting steady order pipelines and long-term revenue visibility if product quality and service remain consistent.

Negative Factors

Declining revenue trend

A multi-percent revenue decline signals shrinking volumes or lost pricing momentum, which is structurally important for a specialist manufacturer. If not reversed, declining sales erode scale, reduce negotiating leverage with suppliers, and make it harder to cover fixed costs, pressuring margins and reinvestment capacity.

Negative free cash flow

Negative free cash flow despite operating cash roughly covering net income suggests cash is consumed by capex or working capital. Over months this constrains dividend capacity, reduces buffer against feedstock swings, and may force external funding for growth or cyclical troughs despite accounting profitability.

Eroding operational margins

Declining EBIT/EBITDA margins point to rising unit costs or mix shifts away from higher-grade PIB. In petrochemicals, persistent margin compression reduces free cash generation and ROE over time, limiting capacity to invest in product development or customer qualification needed to sustain premium pricing.

Kothari Petrochemicals Ltd. Business Overview & Revenue Model

Company Description

Kothari Petrochemicals Limited produces and sells chemicals in India and internationally. It offers polyisobutylene, a linear polymer used in lubricants, adhesives, stretch/silage, sealants and caulks, polymer modification, construction chemicals and rubber, optical fibre, and other applications under the KVIS brand. The company was incorporated in 1989 and is headquartered in Chennai, India. Kothari Petrochemicals Limited is a subsidiary of BHK Trading LLP.

How the Company Makes Money

Kothari Petrochemicals Ltd. generates revenue primarily through the sale of its synthetic rubber products, which are in high demand across multiple industries. The company's key revenue streams include the production and distribution of various grades of rubber, such as styrene-butadiene rubber (SBR) and polybutadiene rubber (PBR). Additionally, KOTHARIPET benefits from strategic partnerships with major manufacturers and suppliers in the automotive and construction sectors, enabling it to secure long-term contracts and maintain a steady flow of orders. The company's focus on research and development allows it to innovate and expand its product offerings, further enhancing its market position and profitability.

Kothari Petrochemicals Ltd. Financial Statement Overview

Summary

Kothari Petrochemicals Ltd. demonstrates strong profitability and a solid balance sheet with low leverage, but faces challenges with revenue growth and cash flow generation. The company needs to address its declining revenue and improve cash flow management to sustain its financial health.

Income Statement

Kothari Petrochemicals Ltd. shows a mixed performance in its income statement. The company has a strong net profit margin of 11.4% for 2025, indicating good profitability. However, the revenue growth rate is negative at -7.58%, suggesting a decline in sales compared to the previous year. The EBIT and EBITDA margins are healthy, but they have decreased compared to the previous year, reflecting some pressure on operational efficiency.

Balance Sheet

The balance sheet of Kothari Petrochemicals Ltd. is robust, with a very low debt-to-equity ratio of 0.0098, indicating minimal leverage and financial risk. The return on equity is strong at 21.5%, showcasing effective use of shareholder funds to generate profits. The equity ratio is also solid, reflecting a stable financial position with a good proportion of equity in the asset base.

Cash Flow

The cash flow statement reveals some challenges, particularly with free cash flow, which is negative, indicating potential liquidity issues. The operating cash flow to net income ratio is slightly above 1, suggesting that the company is generating enough cash from operations to cover its net income. However, the negative free cash flow to net income ratio highlights concerns about cash generation relative to profits.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.25B	5.77B	5.92B	4.79B	3.80B	2.26B
Gross Profit	1.47B	1.26B	1.20B	1.26B	1.06B	407.99M
EBITDA	945.95M	917.18M	1.04B	641.40M	519.83M	376.13M
Net Income	640.33M	658.18M	637.84M	391.77M	328.85M	225.44M
Balance Sheet
Total Assets	0.00	3.78B	3.19B	2.70B	2.23B	1.71B
Cash, Cash Equivalents and Short-Term Investments	281.81M	311.80M	729.76M	530.04M	402.18M	280.80M
Total Debt	0.00	30.11M	22.38M	228.35M	120.43M	38.77M
Total Liabilities	-3.06B	723.44M	724.21M	782.71M	671.95M	475.47M
Stockholders Equity	3.06B	3.06B	2.47B	1.92B	1.56B	1.23B
Cash Flow
Free Cash Flow	0.00	-256.66M	559.59M	57.54M	-20.92M	257.34M
Operating Cash Flow	0.00	603.99M	715.22M	262.16M	183.73M	308.35M
Investing Cash Flow	0.00	-455.81M	-444.04M	-261.87M	-320.09M	-140.54M
Financing Cash Flow	0.00	-69.59M	-330.28M	48.69M	75.70M	-40.23M

Kothari Petrochemicals Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 123.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:KOTHARIPET, the sentiment is Negative. The current price of 123.54 is above the 20-day moving average (MA) of 119.35, below the 50-day MA of 125.28, and below the 200-day MA of 151.54, indicating a bearish trend. The MACD of -3.02 indicates Negative momentum. The RSI at 40.26 is Neutral, neither overbought nor oversold. The STOCH value of 66.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:KOTHARIPET.

Kothari Petrochemicals Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BHARATWIRE	76 Outperform	₹11.79B	14.41	―	―	8.45%	-14.27%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
KOTHARIPET	60 Neutral	₹6.98B	10.56	―	0.81%	-4.92%	1.29%
IGPL	59 Neutral	₹11.16B	34.33	―	2.59%	-10.71%	-40.89%
MANALIPETC	49 Neutral	₹9.88B	8.85	―	0.82%	-2.41%	178.19%
MADRASFERT	48 Neutral	₹12.25B	14.79	―	―	3.38%	0.68%
GOACARBON	43 Neutral	₹3.44B	-5.67	―	5.02%	-19.25%	-220.20%