Archean Chemical Industries Faces Financial Challenges Amidst Sales Growth and High Institutional Holdings

Archean Chemical Industries, a midcap player in the specialty chemicals sector, has recently undergone an evaluation adjustment that reflects significant shifts in its financial metrics. The company's financial performance for the quarter ending June 2025 has been characterized as very negative, leading to a revision in its score. Notably, net sales for the latest six months reached Rs 637.94 crore, showcasing a growth rate of 28.46%. However, several key indicators have raised concerns.
Operating cash flow has reached a low of Rs 176.23 crore, while the return on capital employed (ROCE) stands at 12.96%, marking a low point for the company. Additionally, the operating profit to interest ratio is at 14.52 times, and profit after tax for the quarter is reported at Rs 40.19 crore, reflecting a decline of 15.3% compared to the previous four-quarter average. The debt-equity ratio is at its highest level of 0.13 times, and the debtors turnover ratio is notably low at 6.33 times.

Despite these challenges, the company has maintained a high level of institutional holdings at 35.73%, indicating a level of confidence from larger investors. The stock's current price is Rs 640.75, with a previous close of Rs 659.25.

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