Company Overview

Fairchem Organics Limited (BSE: 543252, NSE: FAIRCHEMOR) submitted its 7th Annual Report for FY 2025-26 along with Notice of 7th Annual General Meeting, complying with SEBI LODR Regulation 34 requirements.

Financial Performance

Revenue & Profitability: The company reported a significant 14.5% YoY decline in revenue from operations to ₹45,964.82 lakhs (₹459.65 crore), while net profit plummeted 75% to ₹554.05 lakhs (₹5.54 crore) from ₹2,197.43 lakhs in FY25. Earnings per share declined to ₹4.28 from ₹16.88 in the previous year.

Exceptional Items: The company recognized a one-time provision of ₹88.27 lakhs as exceptional items related to the implementation of new Labour Codes effective November 21, 2025, which significantly impacted profitability.

Capital Structure: The equity share capital stood at ₹1,259.59 lakhs (12,595,902 equity shares of ₹10 each) following the completion of a share buyback. Total borrowings were ₹8,378.23 lakhs in working capital loans.

Corporate Actions & Capital Management

Share Buyback: The company successfully completed a ₹34 crore buyback of 425,000 equity shares (3.26% of pre-buyback capital) at ₹800 per share during January 8-14, 2026. This resulted in reduction of paid-up capital from ₹13.02 crore to ₹12.60 crore, with ₹42.50 lakhs transferred to Capital Redemption Reserve.

Dividend Declaration: The board proposed a final dividend of ₹1.00 (10%) per equity share, subject to shareholder approval at the AGM, with record date set for July 20, 2026.

Operational Highlights

Asset Base: Gross block increased to ₹266.61 crore with significant capital work in progress of ₹183.81 crore, indicating ongoing expansion activities. Major additions included Plant and Equipment worth ₹1,002.34 lakhs.

Inventory Management: Total inventory stood at ₹9,225.01 lakhs, comprising raw materials (₹1,925.17 lakhs), work-in-progress (₹5,269.12 lakhs), and finished goods (₹730.56 lakhs).

Segment Performance: The company operates in a single reportable segment - Manufacturing of specialty chemicals (Oleo Chemicals and Intermediate Nutraceuticals), with export contribution of 7.80% of total turnover.

Corporate Governance & Management Changes

AGM Agenda: The 7th Annual General Meeting scheduled for July 27, 2026 includes key resolutions for reappointment of Managing Director Nahoosh Jariwala for 3 years with remuneration of ₹12 lakh per month plus commission, and reappointment of Independent Director Sudhin Choksey for a second term of 5 years.

Management Changes: Mr. Rajen Jhaveri (CFO & Company Secretary) ceased effective November 14, 2025, with Mr. Bhavesh Shah appointed as CFO and Mr. Jatin Jain as Company Secretary & Compliance Officer effective November 15, 2025.

Promoter Shareholding & Related Parties

FIH Mauritius Investments Ltd holds 54.61% promoter stake (6,878,656 shares), with total promoter holding at 63.26%. Dividend paid to promoters amounted to ₹597.59 lakhs, while key management personnel remuneration totaled ₹412.16 lakhs.

Asset Security & Contingencies

Non-current assets of ₹19,340.56 lakhs and current assets of ₹16,037.74 lakhs are pledged as security for working capital loans. Contingent liabilities total ₹61.23 lakhs, including disputed tax liabilities across income tax, GST, and excise/service tax.

Auditor Information & Compliance

Statutory auditors B S R and Co and secretarial auditors Parikh Dave & Associates were appointed for 5 years from FY 2025-26 to FY 2029-30. The company maintains CARE A (Stable) rating for long-term facilities and CARE A1 for short-term facilities.

Financial Ratios & Performance Metrics

Key ratios showed deterioration: Current Ratio declined to 1.59 (from 2.30), Debt Equity Ratio increased to 0.32 (from 0.21), Net Profit Ratio fell to 1.21% (from 4.10%), and Return on Equity decreased to 2.09% (from 7.39%).

The company continues to maintain ISO certifications (9001:2015, 14001:2015, 45001:2018) valid until April 2028 and spent ₹98.08 lakhs on CSR activities, representing 2% of average net profit of preceding 3 years.