GHCL Limited is a small cap company incorporated in 1983. It is listed in BSE small cap, and NIFTY microcap 250.
As per the investor presentation of Q1FY2026,In Chemicals, the Company mainly manufactures Soda Ash (Anhydrous Sodium Carbonate) that is a major raw material for detergents & glass industries; and Sodium Bicarbonate (Baking Soda). Consumer Products operation is another business for GHCL where it is a leader in manufacturing and selling edible salt, industrial grade salt and jujube honey in the country under the brand name of I-Flo.
Currently it has 26% share in soda ash domestic market. The company also aims to set up a bromine, a different element from sodium, capacity of 2,800 MT at existing salt works; to generate 40%+ EBITDA margin.
GHCL’s Yarn division was demerged into a separate company GHCL Textiles Limited.
OPM stands at 27.2%, EPS at ₹15, EBITDA margin at 29.5%, ROCE at 24.2%, ROE at 18.6%. All of these point to capital efficency and profitability. Debt to Equity is low at 0.03. It beats Tata Chemicals in all metrics, other than the brand name of Tata.
GHCL is undervalued. P/E is 9, and P/B is marginally above 1.
Some red flags to me are that the company has delivered poor sales growth with 5 year compounded sales growth being -1%. The promoter holding is also low at 19.
All of them are commodities with low pricing power, and not particularly hard to manufacture. This increases competition, as there is not much barrier to entry.
As soda ash is not particularly bulky, and easy to transport via frieght, domestic companies face pressure from cheaper imports as well. According to Volza’s India Import data, India imported 2,612 shipments of Soda Ash during Jun 2024 to May 2025 (TTM). India imports most of its Soda Ash from Kenya, United States, and Turkey.
There is also a high environmental impact of chemical manfacturing. Due to high water consumption, waste generation and power consumption.
I am personally not going to invest in it. Not all undervalued companies are worth investing in. Also I am highly pessimistic of some sectors, including this one. Though I am getting less, hence I will keep it in my watchlist.
I am not associated with GHCL in any way. These are just my own views, and it is not a financial advice. Investments in Securities Markets are subject to market risks, read all the related documents carefully before investing.