Frequently asked questions
Is Kronox Lab Sciences a buy at current prices?
DalalBytes rates Kronox Lab Sciences Neutral at 57/100. The Vadodara high purity fine chemicals maker earned a 34% operating margin and Rs 27.66 crore PAT on FY26 revenue of Rs 101 crore, with borrowings of Rs 1.61 crore, but revenue compounded at only 2% over three years and the founders sold 64.26% control to Indo Borax at Rs 103.22 per share, about half the Rs 218 reference price.
What are Kronox Lab Sciences' FY2029 price targets?
DalalBytes' FY2029 targets for Kronox Lab Sciences are bear Rs 115, base Rs 240, and bull Rs 395, from a Rs 218 reference price on the current share count. Bear: 4% revenue CAGR, 24% PAT margin, 16x exit. Base: 12% CAGR, 26% margin, 24x exit, EPS about Rs 9.95. Bull: 20% CAGR, 28% margin, 30x exit. FY2029 is the year ending March 2029.
What is the Indo Borax takeover of Kronox and the open offer?
Indo Borax and Chemicals signed a share purchase agreement on August 20, 2026 to buy 64.26% of Kronox Lab Sciences from its three founding promoters for Rs 246.12 crore at Rs 103.22 per share, funded largely with Rs 225 crore of debt. The transfer completed on September 29, 2026, the founders retained 9.95%, and the mandatory open offer for up to 25.79% at Rs 157.27 per share runs from October 15 to October 29, 2026.
What is the verdict on Kronox Lab Sciences?
The business quality is elite and the growth record is not. Operating margin rose from 24% in FY22 to 34% in FY26 and PAT margin to 27%, free cash flow was positive in every year from FY20 to FY26, and the balance sheet holds about Rs 64 crore of bank balances and deposits against Rs 1.61 crore of borrowings. Against that: revenue of Rs 82 crore, Rs 96 crore, Rs 90 crore, Rs 100 crore and Rs 101 crore across FY22 to FY26 is a plateau with a margin story attached, ROCE has slid from 52% to 36% as cash accumulated, and the stock now trades at 28.2x trailing earnings and about 7.7x sales, up about 42% since the day before the takeover was announced.
How did Kronox Lab Sciences start?
Jogindersingh Jaswal, Ketan Ramani and Pritesh Ramani incorporated the company in Vadodara on November 18, 2008, on a simple insight: Indian pharma, research and industrial customers needed fine chemicals at certified purity grades (IP, BP, USP-NF, EP pharmacopoeia standards and ACS, LR, AR, GR reagent grades) and much of that supply was imported or inconsistent. The founders built three Vadodara plants with 7,242 TPA, an in-house R and D and testing lab, a catalogue of more than 185 products and customers in more than 20 countries, entirely self-funded. The June 2024 IPO at Rs 136 was a pure offer for sale, subscribed 117.25x; the company raised no fresh capital because it needed none.
What does Kronox Lab Sciences sell?
High purity specialty fine chemicals in three families: bulk reagents for laboratories and research, pharmacopoeia grade bulk ingredients for pharma, nutraceutical, food, oral care, personal care and animal health makers, and specialty chemicals including phosphates, sulphates, acetates, chlorides, citrates, nitrates, EDTA derivatives, hydroxides, tartrates and hypophosphites, plus custom specification manufacturing. These are low volume, high value products sold on qualification, which is why relationships with top customers average seven to nine years. The concentration is the other side of that coin: prospectus disclosures put the top 10 customers above 45% of revenue and the top 20 products above 60%.
What do the financials show?
Revenue of Rs 82 crore, Rs 96 crore, Rs 90 crore, Rs 100 crore and Rs 101 crore across FY22 to FY26, with PAT of Rs 14 crore, Rs 16 crore, Rs 21 crore, Rs 25 crore and Rs 27.66 crore and EPS of Rs 3.49, Rs 4.42, Rs 5.75, Rs 6.86 and Rs 7.45. Margin did all the work: operating margin climbed from 24% to 34% while the top line compounded at 2% over three years. Q1 FY27 was the best print in two years, with sales of Rs 28.39 crore up 16.9% year on year and PAT of Rs 7.30 crore up 16.2%, though operating margin compressed sequentially to 31.7% and other income on the cash pile is a growing share of pre-tax profit.
Who runs Kronox Lab Sciences now, and is governance clean?
Since September 29, 2026, Indo Borax and Chemicals runs it. Suresh Kalra is Managing Director and CEO, Shashikant Bharuka is CFO, and a reconstituted board has three executive and three independent directors. Under the founders, the record was clean: promoter holding flat at 74.21% from the IPO to June 2026, zero pledging throughout, no auditor exit or SEBI action on record. The deduction is the exit itself: control was sold at Rs 103.22 per share while public shareholders had paid up to Rs 155 weeks earlier, and the parent funded the deal with Rs 225 crore of debt that put its own rating on negative watch. Whether Kronox's cash stays at Kronox is the governance question of the next two balance sheets.
What is Kronox Lab Sciences worth?
At Rs 218: P/E 28.2x on TTM EPS of Rs 7.71, P/B 7.0x on book value of Rs 31.30, price-to-sales about 7.7x, dividend yield 0.23% on a Rs 0.50 dividend. Listed fine chemical peers trade higher on paper (Fine Organic about 38x, Fineotex about 45x, Tatva Chintan and Yasho far higher on depressed earnings), but their multiples sit on cyclically weak profits while Kronox's 28x sits on peak margins with a flat top line. The two hard anchors from the deal itself sit below the market: the control price of Rs 103.22 and the open offer at Rs 157.27. FY2029 scenarios from FY26 revenue of Rs 101 crore: bear Rs 115 (4% CAGR, 24% PAT margin, 16x), base Rs 240 (12% CAGR, 26% margin, 24x, EPS about Rs 9.95), bull Rs 395 (20% CAGR, 28% margin, 30x). The base case is only about 10% above the reference price, which is the Neutral verdict in one line.
What are the key risks?
The insider signal first: the founders accepted Rs 103.22 per share for control, about 53% below today's price, with no explanation beyond transition support. Then transition risk under a new team with no record at Kronox, parent leverage of Rs 225 crore with a negative rating watch, customer and product concentration (top 10 customers above 45% of revenue, top 20 products above 60%, exports concentrated in the United States), Dahej execution (the greenfield Unit IV missed its FY2025-26 start with Rs 0.88 crore of work in progress; the Axiom Chemicals Dahej SEZ plant approved on October 14, 2026 has no disclosed price or capacity yet), margin normalization as other income fades, and no price floor: the open offer at Rs 157.27, open until October 29, 2026, does not underwrite Rs 218.
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