Gujarat Alkalies Approves ₹67 Cr Plant, Recommends ₹17.70 Dividend

Gujarat Alkalies and Chemicals Limited (GACL) reported a 7% year-on-year growth in revenue from operations, reaching ₹4,358.08 crore for FY26. Profit after tax (PAT) also saw an increase to ₹20.84 crore from ₹15.82 crore in the previous fiscal.

Reader Takeaway: Steady standalone growth and dividend payout, but JV losses persist.

What just happened

GACL announced its annual financial results, recommending a final dividend of ₹17.70 per share (177%). The company also approved the establishment of a 5,000 TPA Hydrogen Peroxide plant at Dahej, with an estimated investment of ₹67 crore.

Standalone revenue grew approximately 7% to ₹4,358.08 crore, and PAT rose to ₹20.84 crore. Basic earnings per share improved to ₹2.84 from ₹2.15.

However, consolidated performance was impacted by the GACL-NALCO joint venture, reporting a net loss of ₹2.41 crore for FY26, an improvement from a loss of ₹65.12 crore in FY25.

Why this matters

The dividend payout provides a direct return to shareholders, reflecting the company's improved standalone profitability. The new Hydrogen Peroxide plant signifies a strategic move into high-value niche markets, such as semiconductor fabrication and solar cell manufacturing, with an expected annual sales contribution of ₹42 crore.

The backstory

Gujarat Alkalies and Chemicals Limited is a major producer of caustic soda and other allied chemicals. The GACL-NALCO Alkalies & Chemicals Private Limited joint venture has been a point of concern, having incurred significant accumulated losses.

What changes now

The approved Hydrogen Peroxide plant is expected to be operational within 18 months, diversifying GACL's product portfolio and targeting high-growth sectors. The company is also focusing on digitization and operational efficiency through 'Project Ahvaan'.

Risks to watch

The substantial accumulated losses of ₹633.31 crore in the GACL-NALCO joint venture remain a significant risk, despite the company stating no impairment provision was recognized based on an expert assessment.

Peer comparison

Information on peers is not available in the provided filing.

Context metrics (time-bound)

The share of renewable energy in GACL's power consumption increased to 35.7% from 29.7% in the previous fiscal year.

What to track next

Investors will monitor the progress of the Hydrogen Peroxide plant's construction and its eventual contribution to sales. The performance of the GACL-NALCO joint venture and the impact of digitization initiatives will also be key areas to watch.