Chemical stock jumps after its production capacity to increase 5x with new facility

Synopsis: The shares of a Micro-Cap company, specializing in the manufacturing and trading of specialty chemicals, particularly pigments and dyes, as well as organic intermediates, are in spotlight after production capacity set to grow 5x, and the company forays into the Membrane Market.

With a market capitalization of Rs. 384.98 crores on Tuesday, the shares of Vipul Organics Ltd jumped by upto 2.6 percent, making a high of Rs. 218.95 per share compared to its previous closing price of Rs. 213.35 per share.

What Happened 

Vipul Organics Ltd, engaged in the manufacturing and trading of specialty chemicals, particularly pigments and dyes, as well as organic intermediates, is in the spotlight as it announces a foray into membrane manufacturing and expands capacity with a new Sayakha plant.

The Sayakha facility

Vipul Organics is set to launch a new Greenfield pigment facility in Sayakha, Gujarat, which the company sees as a major step forward. Currently producing 2,000 tonnes per year, the new plant will expand capacity to 10,000 tonnes, lowering costs and boosting competitiveness against larger Chinese players. 

Production is expected to start in about few weeks, with a significant improvement in EBITDA anticipated. The facility will focus on high-performance pigments for industries like automotive coatings, and the company may also produce its own pigment intermediates for better quality, pricing, and supply control.

Diversifying into membrane technology

Vipul Organics is diversifying into membrane manufacturing, a sector with strong growth potential in India. The company had no prior experience in membranes until 2023, but Dr. Vatsal Shah, who recently completed his PhD in membrane technology, highlighted a gap in the market, as most membranes were imported from the US, Korea, or China. 

With his expertise, Vipul Organics aims to produce high-quality, efficient membranes at competitive prices, leveraging in-house innovation to challenge global players like Hydranautics and Toray.

Investing in Innovation and Sustainability

Vipul Organics continues to prioritise R&D, investing 6–7% of its revenues in advanced pigment technologies and plant modernisation. Shah notes that older machinery, especially at the Ambernath site, is being upgraded to meet modern sustainability norms. The company has also adopted Zero Liquid Discharge (ZLD) systems, strengthening trust among global clients such as Flint USA, Siegwerk and Toyo Ink. 

According to Managing Director Shah, these customers value strong environmental compliance and view the in-house ZLD system as a guarantee of uninterrupted, sustainable production, something they are even willing to pay a premium for.

Expanding global footprints

Vipul Organics is strengthening its global presence, with North America, particularly the US, now forming the largest share of its exports. Shah highlights the importance of the market, noting that a new Delaware office helps maintain inventory for the quick deliveries American customers expect. 

Despite tariff hurdles, the company aims to expand into Central and Latin America, targeting countries like Mexico, El Salvador, Honduras and the Dominican Republic, where demand across paints, plastics and agrochemicals is rising, and market access is comparatively easier.

Competing with China

Managing Director Shah highlights that while India’s raw material costs are similar to China’s, production costs have been much higher, about twice as much. With the new Sayakha facility, Vipul Organics expects to reduce costs to nearly 1.1 times China’s, enabling it to compete directly. At this level, Indian products could be preferred for their quality, sustainability, and reliability, even at a slightly higher price.

Looking ahead, Vipul Organics aims for global growth and technological advancement. Shah emphasises that the company wants to match India’s top organised pigment players, competing not just on price but on precision, performance, and purpose.

Financial & Others

The company’s revenue rose by 0.48 percent from Rs. 39.24 crore in September 2024 to Rs. 39.43 crore in September 2025. Meanwhile, Net profit rose from Rs. 1.06 crores to  Rs. 1.81 crores during the same period.

The company demonstrates solid financial performance, with a Return on Capital Employed (ROCE) of 8.64% and a Return on Equity (ROE) of 6.78%. Its debt-to-equity ratio of 0.70 indicates a balanced capital structure.

Vipul Organics Ltd is a leading Indian manufacturer of dyes and pigments, founded in 1968 and formerly known as Vipul Dye Chem before its 2017 rebranding. The company produces a wide range of products for various industries, including paint, ink, plastics, textiles, and rubber, and is known for being a fully integrated manufacturer of both pigment powders and dispersions and it has two manufacturing facilities in Maharashtra, India. 

Written by Sridhar J 

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