Pasupati Acrylon Limited (PAL) is a leading manufacturer of acrylic fiber, yarn, and tow in India with an established export presence across 50+ countries.
Founded in 1985, the company has grown to become a major player in the domestic acrylic market, catering to diverse segments like textiles, apparel, home furnishing, and automotive industries.
PAL boasts a vertically integrated manufacturing setup with a captive acrylic staple fiber plant, spinning facilities, and fabric production units.
Pasupati Acrylon Company Background
PAL is the market leader in the domestic acrylic fiber industry with over 30% market share.
The company derives over 60% of its revenues through exports and counts some of the largest retailers worldwide as its key clients.
Its products find applications across apparels, home furnishings, industrial fabrics, etc.
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Financial Performance
Over the last 5 years, PAL has delivered a healthy topline CAGR of 9% driven by capacity expansions. However, bottomline growth has been volatile due to raw material price fluctuations and competitive pressures.
Operating margins have ranged between 7-10% as the company faces intense competition from Reliance Industries and cheap imports. Return on capital employed has averaged around 13% over the last 5 years.
Profitability has also improved, with EBITDA margins exceeding 20% in FY23. The company maintains a healthy balance sheet with low debt levels.
Key highlights include:
- Revenue: Steady growth, exceeding ₹1,500 crore in FY23.
- Profitability: Maintaining healthy margins, with net profit margin hovering around 10%.
- Debt: Prudent debt management, with debt-to-equity ratio below 1.
- Dividends: Consistent dividend payout, reflecting strong cash flow generation.
Current Scenario
The Indian textiles market is witnessing an uptick in demand across key end-user segments providing strong growth visibility for acrylic fiber manufacturers.
To capitalize on this demand uptrend and expand its export footprint, PAL is expanding its capacities in a phased manner to reach 80,000 MTPA by 2025.
- Positives: Growing demand from apparel and home furnishing segments, government focus on infrastructure development, and rising disposable incomes.
- Negatives: Fluctuations in raw material prices (crude oil derivatives), competition from cheaper imports, and potential economic slowdown.
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Growth Aspects
The key growth drivers for PAL over the next 5 years would be:
- Increasing its production capacities by over 2.5 times to 80,000 MTPA
- Expanding product portfolio into tow and top dyeing to enter new markets
- Leveraging export demand from Asia, Africa and Latin America where textile consumption is growing rapidly
- Positive industry outlook supported by rising apparel and home furnishing demand
Other growth aspects include:
- Expansion plans: Increasing production capacity through brownfield and greenfield projects.
- Diversification: Exploring new product segments like technical textiles and value-added fabrics.
- Technological advancements: Continuous investments in R&D to improve product quality and efficiency.
- Strong brand recognition: Established reputation for quality and reliability in the market.
Risks and Challenges
However, PAL faces several key challenges and risks:
- Volatile raw material prices: Exposure to fluctuations in crude oil derivatives can impact profitability.
- Intensifying competition: Domestic (Reliance Industries) and international players vying for market share.
- Economic headwinds: Potential economic slowdown could dampen demand and affect margins.
- Environmental regulations: Stringent environmental norms may increase operating costs.
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Pasupati Acrylon Share Price Target 2025-2030
Predicting future share prices with certainty is impossible. However, considering PAL’s growth potential, financial strength, and industry outlook, analysts offer a range of estimates:
| Key Drivers | Key Risks |
|---|---|
| Growing demand for ASF and yarn | Volatile raw material prices |
| Expansion plans and diversification | Intense competition |
| Technological advancements | Economic slowdown |
| Strong brand recognition | Environmental regulations |
| Focus on cost optimization and operational efficiency | Fluctuations in foreign exchange rates |
Conclusion:
Pasupati Acrylon is well-positioned to benefit from the growing Indian textile market and rising ASF demand.
The company’s expansion plans, diversification efforts, and focus on sustainability are potential growth drivers.
However, dependence on imported raw materials, competition, and macroeconomic factors pose challenges.
Based on our analysis, we project a steady increase in the Pasupati Acrylon share price in the coming years, with a potential target of INR 80 by 2030.
It’s important to note that this is an optimistic forecast, and actual performance may vary depending on unforeseen circumstances.
Disclaimer: This report is for informational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Additional Sources for Analysis
1. Company Websites and Reports:
- Official website: https://pasupatiacrylon.com/
- Investors Page: https://pasupatiacrylon.com/investors/
2. Financial Data and Analysis:
