Archean Chemical Industries
Bromine cost-curve leader
- Last close
- ₹490.60
- 29 Sept 2026 · reference
- 1D · 1M
- +1.6% · +1.3%
- price-only
- Weight
- 0.6%
- 31 Jul 2026 · Aug rank —
- Thesis review
- 8 Sep 2026
- Why We Own, p66
Approved description
Archean Chemical is India's largest producer of bromine and industrial salt from brine at Hajipir, Gujarat (Rann of Kutch), with ~78% of revenue exported; FY26 revenue Rs 1,108 cr split industrial salt Rs 729 cr and bromine Rs 308 cr. It is building sulphate of potash (SOP), bromine derivatives (Acume, EBITDA-positive for the first time in Q1FY27), zinc-bromide energy storage, and a USD 250 mn silicon-carbide semiconductor fab/packaging unit (SiCSem, Odisha; 60,000 wafers and 96 mn packaging units/yr; partners Clas-SiC UK, Aixtron, IIT Bhubaneswar) approved under the India Semiconductor Mission.
- 01Bromine cycle turning after three weak years: Q1FY27 bromine realisations +50% YoY, volumes at a five-quarter high; China bromine +35% in Q1CY26 to ~USD 4,900/t (Jun-2026) before easing to USD 4,347/t (Jul-2026) - still far above the 2024-25 trough.
- 02Operating leverage on a low base: FY26 EBITDA Rs 239 cr (22% margin) vs Rs 463 cr (35%) in FY24; ICICI Sec sees >50% EBITDA CAGR FY26-28 as bromine run-rate rises to 20-24 kt and freight/fuel costs stabilise.
- 03New products moving from cost to profit: Acume bromine derivatives EBITDA-positive for the first time in Q1FY27 (Rs 1.9 cr vs Rs -2.7 cr), SOP phase-2 trials by Q3FY27, zinc-bromide off-grid storage.
- 04Optionality in SiC semiconductors: USD 250 mn SiCSem fab in Odisha under ISM fiscal support (agreement 11-May-2026), 60,000 wafers/yr, revenue from FY29 - not in broker estimates.
- 05Low leverage and export-led: borrowings Rs 466 cr vs equity Rs 1,935 cr; ~78% exports; working-capital days improved from 49.5 to 10.8.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 327 | +12.0% | +8.6% |
| Operating Profit | 67 | −13.9% | +53.9% |
| Net Profit | 31 | −23.7% | +128.6% |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
Commodity/cyclical preset: volumes, realisations, unit cost, mid-cycle earnings, leverage.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- Q2FY27 results (Nov-2026): bromine volume run-rate progressing toward 20-24 kt and salt pricing stabilisation guided for H2FY27.
- SOP phase-2 commissioning by Q3FY27 and continued Acume derivatives profitability.
- SiCSem fab milestones (equipment orders with Aixtron, Clas-SiC integration) and any ISM disbursement news.
- Bromine price volatility: prices already fell 11% QoQ in Jul-2026 as Chinese supply recovered; FY26 bromine revenue fell 13% and Q4FY26 had technical downtime.
- Capital intensity and execution: borrowings up from Rs 98 cr (FY24) to Rs 466 cr (FY26) funding SOP, derivatives and the USD 250 mn SiC fab - a technology the company has no track record in; interest/depreciation already dragged Q1FY27 PAT -25%.
- Salt business (66% of FY26 revenue) faces weak pricing and freight sensitivity; ROE only 5.4% in FY26 (3-yr 11%).