Multibagger Stock: Epigral yields 120% return in a year, 430% in over 3 years

Multibagger Stock: Epigral, India’s leading integrated chemical manufacturer, has delivered substantial returns to its shareholders, showcasing remarkable growth in its share price. Over the past year, the stock has surged from ₹932 to its current trading price of ₹2,057, delivering a stellar gain of 120%.

The stock's performance becomes even more impressive when considering its recovery from a low of ₹387 hit in August 2021. Since then, it has appreciated by 432%. On Tuesday, the stock jumped nearly 8% as investors reacted positively to the company’s Q2 earnings, which surpassed Street expectations.

The stock's stellar performance in recent years is attributed to a combination of strong financial results, buoyant domestic demand, and increased export activities. This growth is further bolstered by the global shift towards the China-plus-one strategy and opportunities arising from plant shutdowns in Europe, enabling Indian specialty chemical companies to expand their market presence. 

The company completed a Qualified Institutional Placement (QIP) in late October, raising ₹333.05 crore at an issue price of ₹2,093.13 per share. These funds will support the company’s growth plans and further strengthen its financial position, ensuring continued market expansion.

For the September-ending quarter, Epigral reported strong financial performance with a 111% increase in PAT to ₹81 crore compared to ₹38 crore in Q2 FY24. Revenue rose by 32% to ₹632 crore, driven by volume growth in derivative products. EBITDA grew by 65% YoY to ₹178 crore, with a margin of 29%, up from 23% in Q2 FY24, reflecting higher utilisation and volume contributions from new projects.

The company has approved an expansion project at its Dahej facility in Gujarat, which includes increasing CPVC resin capacity by 75,000 TPA to a total of 1,50,000 TPA and expanding Epichlorohydrin (ECH) capacity by 50,000 TPA to 1,00,000 TPA.

With this expansion, Epigral's total CPVC resin capacity will be elevated as the largest resin facility in the world and Epichlorohydrin will be the largest facility in India.

Well-Positioned

Epigral is a leading integrated chemical manufacturer in India, known for being the first to set up an Epichlorohydrin plant and for having the largest CPVC plant in the country. 

It produces a wide range of products including Epichlorohydrin (ECH), CPVC resin, Chloromethanes (CMS), and Hydrogen Peroxide, all of which are critical to various industries such as construction, chemicals, and manufacturing. The demand for these products has seen significant growth in recent years, driven by sectoral developments and market trends.

In FY 2023-24, the demand for Epichlorohydrin (ECH) in India reached approximately 1,25,000 tons, with double-digit growth expected due to increased infrastructure spending.

Similarly, the demand for CPVC resin surged to 2,30,000 tons, driven by a booming construction sector. Globally, the chlorinated polyvinyl chloride (CPVC) market, valued at USD 1.6 billion in 2023, is projected to grow at a robust CAGR of 11.1%, reaching USD 2.7 billion by 2028.

Chloromethane (CMS) demand in India remained steady at 6,15,000 TPA in FY 2023-24, compared to 5,80,000 TPA in FY 2022-23, with production capacity stable at 6,77,000 TPA.

On the global front, the hydrogen peroxide market, worth USD 3.2 billion in 2023, is projected to grow at a CAGR of 5.3% over the next decade, reaching USD 6.76 billion by 2032. For the upcoming year, a growth rate of around 10% is anticipated, as per the recent estimates.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.