Kothari Petrochemicals Ltd. (KOTHARIPET) AI Stock Analysis

• Market Cap: ₹6.26B
• Dividend Yield: 0.81%
• Average Volume (3M): 59.02K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 1.61
• Revenue Growth: -4.92%
• EPS Growth: 1.29%
• Country: IN
• Employees: 177
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 3.18
• 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: ₹112.00 ▼(-9.34% Downside)
• Action: N/A Date: 10/02/25
• Date: Action: N/A 10/02/25

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

Low leverage / strong balance sheet

Extremely low leverage and a high return on equity provide durable financial flexibility. Minimal debt reduces insolvency risk, preserves borrowing capacity for capex or volatility, and supports investment or dividend continuity over the next several months.

Healthy profitability margins

Sustained net and operating margins indicate the business can convert sales into profits reliably. Strong margins support internal funding for operations and strategic initiatives, cushioning short-term demand swings and helping maintain shareholder returns.

Specialized product with recurring demand

As a supplier of specialty PIB to multiple industrial end markets, the company benefits from recurring, diversified demand from lubricant, additive and adhesives producers. Product qualification and industrial use create stickiness and steady structural revenue streams.

Negative Factors

Declining revenue trend

A sustained decline in top-line sales undermines operating leverage and long-term growth prospects. If revenue contraction continues, it will compress margins, reduce cash generation, and limit ability to invest in capacity or new product development over the medium term.

Negative free cash flow

Negative free cash flow signals that reported profits are not fully converting into discretionary cash. This limits capacity to fund capex, repay obligations, or return capital to shareholders, making the company more reliant on working capital management or external financing.

Operating margin pressure

Declining EBIT/EBITDA margins point to cost pressure or weaker pricing power, likely from higher feedstock or utility costs or softer market pricing. Persistent margin compression would erode profitability resilience and weaken returns on invested capital.

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. makes money mainly by manufacturing and selling Polyisobutylene (PIB) to industrial customers. Revenue is generated through (1) domestic and export sales of PIB across different grades/specifications, with pricing typically influenced by product grade, customer qualification requirements, order volumes, and prevailing petrochemical feedstock conditions; and (2) recurring demand from end-use segments such as lubricant/fuel additive manufacturers and adhesives/sealants producers that consume PIB as an input material. The company’s earnings are largely driven by sales volumes, realized selling prices, product mix across PIB grades, and the margin between selling prices and input/operating costs (including feedstock and utilities). Specific disclosures on major customer partnerships, contract structures (e.g., long-term offtake agreements), or non-PIB revenue streams are null.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.88B	5.77B	5.92B	4.79B	3.80B	2.26B
Gross Profit	1.63B	1.26B	1.20B	1.26B	1.06B	407.99M
EBITDA	970.94M	917.18M	1.04B	641.40M	519.83M	376.13M
Net Income	661.18M	658.18M	637.84M	391.77M	328.85M	225.44M
Balance Sheet
Total Assets	4.09B	3.78B	3.19B	2.70B	2.23B	1.71B
Cash, Cash Equivalents and Short-Term Investments	322.69M	311.80M	729.76M	530.04M	402.18M	280.80M
Total Debt	26.24M	30.11M	22.38M	228.35M	120.43M	38.77M
Total Liabilities	731.17M	723.44M	724.21M	782.71M	671.95M	475.47M
Stockholders Equity	3.36B	3.06B	2.47B	1.92B	1.56B	1.23B
Cash Flow
Free Cash Flow	433.27M	-256.66M	559.59M	57.54M	-20.92M	257.34M
Operating Cash Flow	484.18M	603.99M	715.22M	262.16M	183.73M	308.35M
Investing Cash Flow	-450.43M	-455.81M	-444.04M	-261.87M	-320.09M	-140.54M
Financing Cash Flow	-66.17M	-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 110.99, above the 50-day MA of 116.02, and below the 200-day MA of 143.93, indicating a bearish trend. The MACD of -2.85 indicates Negative momentum. The RSI at 38.97 is Neutral, neither overbought nor oversold. The STOCH value of 46.15 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	₹10.63B	17.06	―	―	8.45%	-14.27%
IGPL	66 Neutral	₹11.02B	-28.19	―	2.59%	-10.71%	-40.89%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
KOTHARIPET	60 Neutral	₹6.26B	10.26	―	0.81%	-4.92%	1.29%
MANALIPETC	57 Neutral	₹7.25B	3.95	―	0.82%	-2.41%	178.19%
MADRASFERT	48 Neutral	₹9.36B	127.23	―	―	3.38%	0.68%
GOACARBON	43 Neutral	₹2.63B	-4.16	―	5.02%	-19.25%	-220.20%