India Glycols Splits: Three Stars Emerge!

The National Company Law Tribunal (NCLT) has approved the strategic trifurcation of India Glycols into three distinct entities: India Glycols, focusing on specialty chemicals; IGL Spirits, encompassing spirits and biofuels; and Ennature Bio Pharma, dedicated to nutraceuticals and APIs. This significant restructuring is expected to eliminate any conglomerate discount, allowing each business to pursue its independent growth strategies.

IGL Spirits has established itself as a market leader in Uttar Pradesh and Uttarakhand, leveraging captive molasses-based extra neutral alcohol (ENA) production for cost efficiency. The company reported a 26 percent year-on-year increase in Indian Made Foreign Liquor (IMFL) revenue, reaching 1.4 million cases. A strategic focus on premiumization includes recent launches in deluxe whisky and semi-premium vodka categories, anticipating revenue growth to surpass volume increases.

India Glycols, the specialty chemicals division, is recognized globally as the largest supplier of bio-based specialty chemicals. It is a pioneer in bio-based amines and carbon-smart glycols, holding strong partnerships with major consumer brands like Dove, L'Oréal, and Unilever. Meanwhile, Ennature Bio Pharma has seen its nicotine business double quarter-on-quarter, supported by new capacity at its Kashipur facility. The management anticipates this division could achieve an EBITDA of ₹130-150 crore within four to five years.

Financial projections indicate a compound annual growth rate (CAGR) of 12 percent for revenue, 15.4 percent for EBITDA, and 29 percent for profit after tax (PAT) from FY26 to FY29E. This growth is expected to drive an expansion in EBITDA margins to 16.9 percent by FY29E. Analysts maintain a "Buy" rating with a target price of ₹1,639 per share, derived from a sum-of-the-parts (SOTP) valuation.