Buy Vishnu Chemicals; target of Rs 650: Emkay Global Financial

Emkay Global Financial' research report on Vishnu Chemicals

Vishnu Chemicals (VCL) completed the acquisition of the chrome ore mine for ~USD10mn on a debt-free, cash-free, and liability-free basis on 21-Nov-25. VCL’s wholly owned subsidiary would own 74% of the mining entity and 100% of the chrome beneficiation plant, along with mining and infrastructure assets. The chrome mine is spread over ~1,800 hectares and has >10mmt of reserves. Postbeneficiation, the actual usable chrome ore would be ~5.5-6mmt, which can last 50Y (ie basis VCL’s current demand). With further expansion in chromium chemicals, VCL estimates the life of the reserve at 30Y. We expect it to benefit from a) integrated sourcing and manufacturing, b) stable supply of chemical-grade chrome ore without price volatility, and c) a faster ramp-up of the acquired plant.

Outlook

We expect annual EBITDA improvement of Rs300-400mn (basis current chrome ore prices) at optimal utilization, which will help meet VCL’s annual chrome ore requirement. We retain BUY with an unchanged TP of Rs 650 (20x Dec-27E EPS).