Company is mainly into manufacturing of bulk chemical commodity like IPA, Fertiliser, Nitric Acid, Ammonia and now with the entry of China even Ammonium Nitrate.
Due to the high tide in chemical sector margin of the Company was alevated to 20% as agaisnt mean margin of 12-13%. The margins are now reverting to mean and so will the valuations will also be. With lower margin and peak debt of around 4500 Cr, it will be interesting to see how the Company performs. Company was into financial turbulence during 2018 & 2019 due to reduction in margin and higher capex, because of which the rating was also downgraded. The same cycle may repeat if the margins further decline.
Disclosure: Invested with tracking position from lower levels.