ABOUT THE COMPANY
PONDY OXIDES & CHEMISTRY LIMITED is an Indian based recycler and manufacturer of non-ferrous metals like lead, copper, aluminium, and plastic products. With customers present in India and the international market, 66% of the company sales is through exports and 34% are domestic sales. As of FY2025 the company has a capacity of finished goods recycling of 1,68,000 MTPA and states its recycling 1,40,000 MTPA. The company has entered into an agreement with the government of Tamil Nadu for building recycling plants in the state. The company has invested 70 Crores in capacity expansion and operational enhancement. Additionally, it raised 175 Crores through QIP to fund further working capital & expansion plans.
Analysis of the Financial Statements
Revenue Growth Trend
Revenue showed moderate growth from 1,220 crores in 2020 to 2,028 crores in 2025 with a CAGR for revenues standing at 10.7%, while its competing company Gravita India Ltd has a 5-year CAGR of 42.11%. CAGR rate indicates that the company is behind its competitors in grabbing the market opportunities. Growth has been driven due to the global shift towards sustainability and will surely show the same results in the future. Revenue of the company is expected to rise in the future as the order size is very high and the company has an aggressive expansion plan, shown through the massive capital investment and collaboration with the state government.
| March 2020 | March 2021 | March 2022 | March 2023 | March 2024 | March 2025 |
| 1,220 CRORES | 1,004 CRORES | 1,455 CRORES | 1,472 CRORES | 1,526 CRORES | 2,028 CRORES |
Profitability & Margin Analysis
Operating profits of the company has shown an increase from 3% in 2020, to 5% in March 2025 while its competing firm Gravita India Ltd has an Operating Profit Ratio of 8% in March 2025. This is a sign that the management has a long way to go on cost efficiency and increasing the profit, which would help company to scale profit faster when the sales increase as the fixed cost burden would be minimized.
| March 2020 | March 2021 | March 2022 | March 2023 | March 2024 | March 2025 |
| 3% | 2% | 5% | 5% | 5% | 5% |
Balance Sheet Strength
The total assets of the company have grown from 219 crores in March 2020 to 731 crores in March 2025, showing subsequent capital investment. This subsequent growth is majorly due to the investment in the fixed assets rather than only in the working capital which shows company ability to support expanded operations. This asset appreciation plus cutting operational costs can build a solid foundation for future earnings growth, provided execution stays on track. The expanded assets base delivered return on capital employed (ROCE) of 16.9%, which shows foundation for the growth of the company.
Debt Profile
Borrowings of the company had decreased from 56 crores in March 2020 to 103 crores in March 2025, indicating that the company is using leverage to support its growth. Reserves showed an increase from 145 crore to 583 crores in 5 years, indicating a large portion of the earnings is retained, which would help the company in the future to finance its growth. Increasing reserves along with borrowing sparks a question about why the company is not paying of its debt if it has sufficient funds or the company has better opportunity in the future to use such capital for growth.
Cash Flow Health
Operating cash flow of the company has been inconsistent in the future with 135 Crores positive in March 2020 to 64 Crore positive in March 2024 and 75 Crores negative in March 2025, which shows that the company is inconsistent in converting its profit into cash. Cash Conversion Cycle of the company has shown an increase in the past years, company has a higher cash conversion cycle, weakening liquidity and affecting company reserves.
Analysis of the Company Management (Investors presentation/Disclosures-based view)
Recent conference calls highlighted:
- Management highlighted that the company has invested 70 Crores in 9MFY25 for capacity expansion and operational enhancements. Additionally, it raised 175 Crores through QIP to fund further working capital & expansion plans.
- Management emphasized on acquiring larger orders and diverse procurement channels to reduce customer concentration risk versus a small recycler.
- Management concalls reflect a high level of integrity towards its shareholders and the same has been reflected through stock growth along with the company growth.
Disclaimer: The article is for informational purposes only and not investment advice.