Hold Archean Chemical Industries; target of Rs 554: Deven Choksey

Deven Choksey report on Archean Chemical Industries

Archean Chemical reported a moderate Q2 FY26 as weather-led disruptions impacted production across core product lines. Consolidated revenue for the quarter stood at INR 2,332 mn, down 3.0% YoY missed our estimate by 34.3%. The revenue mix for Q2 comprised 33% bromine and 67% industrial salt. EBITDA came in at INR 626 mn, declining 16.1% YoY, with margins at 26.8%. PAT for the quarter stood at INR 290 mn. For H1 FY26, Consolidated revenue grew 16.0% YoY to INR 5,255 mn despite monsoon-led challenges. EBITDA declined 3.6% YoY to INR 1,407 mn, while PAT rose 14.2% YoY to INR 692 mn.

Outlook

We have roll-forward our valuation basis to Sep’27 EPS. We value Archean Chemicals at 18.0x Sep’27 EPS implying a TP of INR 554 and downgrade our rating from “ACCUMULATE” to “HOLD” factoring in challenges ahead, centered on operational inefficiencies, execution delays, and external volatility.

For all recommendations report, click here