Broker’s Call: India Glycols (Buy)

The NCLT-approved division of the conglomerate into three separate companies – India Glycols, IGL Spirits, and Ennature Bio Pharma – is seen as a significant catalyst for growth. This restructuring removes the conglomerate discount, creating three distinct, pure-play entities with unique operational dynamics. Each business will be able to focus on its own growth trajectory, potentially unlocking substantial shareholder value.

IGL Spirits is the current market leader, particularly in Uttar Pradesh and Uttarakhand. The subsidiary benefits from captive ENA production, providing it with cost leadership. Revenue for IGL Spirits increased by 26% year-on-year, reaching 1.4 million cases. The company is focusing on premiumisation, with new launches in deluxe whisky, semi-premium vodka, and white spirits. Management aims to achieve EBITDA of more than ₹1,000 crore within four to five years.

India Glycols, known as the world's largest supplier of bio-based specialty chemicals, is a pioneer in bio-based amines and carbon-smart glycols. The company has strong partnerships with major brands such as Dove, L'Oréal, and Unilever. In Ennature Bio Pharma, the nicotine business has shown remarkable growth, doubling on a quarterly basis with the introduction of new capacity at Kashipur. Management targets EBITDA of ₹130-150 crore in the next four to five years.

The analyst estimates revenue, EBITDA, and PAT compound annual growth rates (CAGRs) of 12%, 15.4%, and 29% respectively over FY26-FY29E. They aim to expand EBITDA margins to 16.9% by FY29E. The analyst maintains a "Buy" rating for India Glycols shares at a target price of ₹1,639 per share, based on the SOTP (Strategic Outlook Target Price).