Phytochem Remedies (India) Ltd IPO Analysis

As India’s consumption story grows, Phytochem packs its ambitions into every box, aiming to be a package maker for a variety of daily life products.

Let’s explore this upcoming IPO further:

Phytochem Remedies (India) Ltd Share Price will be finalised post-allotment, while grey market cues through the Phytochem Remedies (India) Ltd IPO GMP will likely reflect market sentiment closer to listing.

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This industry primarily involves plastic, metal and paper-based packaging solutions, catering to sectors like food processing, FMCG, pharma, e-commerce and consumer electronics. The Indian packaging industry, valued at USD 85 billion by CY 2024, is expected to grow with a CAGR of 13.5%, reaching USD 182 billion by 2030. 

The shift from loose, unbranded goods to branded, hygienically packed products, along with rising urban incomes and deeper distribution into tier 2/3 cities, is structurally increasing the volume of packaging used in India. 

Here is a snapshot of market-wise growth drivers of the packaging industry:

The packaging industry is segmented into 2 categories:

• Flexible Packaging (64%): Involves Plastic-films and cellophane-based packaging 

• Rigid Packaging (36%): Involves Wood-based, Metal, Glass and Paper-based packaging

Currently, due to the flexibility in transportation and storage along with superior barrier properties, the Indian packaging sector is dominated by the flexible packaging segment. Despite being in the same industry, the flexible segment acts as a competitor to the rigid-based packaging solutions.

Company Origin Story 

Incorporated in 2002, Phytochem Remedies (India) is a corrugated packaging player and a focused manufacturer of customised boxes and boards for everyday consumption stories across North India. The company today sits inside multiple value chains from apples and agro-produce to FMCG, pharmaceuticals, pesticides and e-commerce. 

Its portfolio spans printed and plain corrugated boxes, boards, rolls, sheets and pads. The company has an emphasis on higher-spec products like multi-coloured printed cartons and coated substrates that can handle moisture, oil or handling stress better.

Commercially, Phytochem sells mostly B2B, directly into large and mid-sized customers across pharma, FMCG, agri-produce and chemicals, supplemented by a network of regional relationships built over years of supplies. 

These are the 4 product categories made by the company:

1. Corrugated Boxes: sturdy, lightweight packaging solutions made from multiple layers of paperboard.

2. Printed Corrugated Boxes: Combine the protective features of regular corrugated boxes with custom branding & logos.

3. Corrugated Rolls: They are the continuous sheets of corrugated paper that are often used for wrapping and protecting items.

4. Corrugated Pads and Sheets: These are flat pieces of corrugated cardboard that are used for protection and reinforcement.

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In packaging, corrugated usually refers to paper or board where a wavy (fluted) sheet is placed between flat sheets, creating a lightweight but high-strength structure used for boxes and protective packaging. 

The primary raw material used is Kraft paper, made from wood pulp. Manufacturing also involves the usage of coatings, adhesives and other speciality chemicals. 

The company sources its paper from B-class paper mills, mainly located within a 300 km radius in Western UP, Punjab, and Himachal Pradesh, for efficient logistics. Adhesives are procured from trusted local dealers. 

Industry-Wise Revenue (%)

The company generates the majority of its revenue from the ‘Pharma & Others’ category. It includes cartons for tablets, syrups, injectables and medical devices. The other category includes packaging solutions for chemicals, auto-components and the beverage sector. 

Both pesticides and FMCG represent around a quarter of the company’s revenue, while the fruits sector accounts for 11%.

(*The company has not yet disclosed the product and region-wise revenue.)

Analysis of Phytochem’s Client Base

The company has a well-established client base, with prominent names from various industries:

Phytochem’s client list is a good reflection of where Indian consumption and agri spend are heading. On one side are established, scale players like Cadila Pharmaceuticals, Coromandel International and Dhanuka Agritech. 

On the other side are more brand‑led or emerging businesses like Farm Fresh Apples, Himalayan Bio Organics Foods, Polymet Films and SS Tins, which sit closer to India’s premiumisation and formalisation story.

In terms of revenue concentration, the company is well diversified with sales from the Top 3 & Top 5 concentrated at 36% and 44% respectively.

It can also be observed that over the years, the company has significantly improved its revenue concentration.

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The company has two manufacturing units, both located in Jammu. Unit 2, established later in 2022, operates a fully automatic corrugated board plant equipped with the latest technology.

Over the years, it can be observed that the company has been increasing its overall utilisation, reaching 57% as of FY25. Despite the constant increase in utilisation trend, the company still has substantial room for an increase in utilisation.

(It must also be noted that out of the IPO proceeds, the company will be using up to Rs 11Cr for CAPEX.)

Management + Promoter Holding

Promoters of Phytochem Remedies Ltd consist of three individuals: Niranjan Surana, Aditi Bohra, and Shilpa Surana, along with the corporate entity, Bohra Agrifilms Private Limited. With the combined experience of over four decades in the manufacturing sector. 

The leadership leverages its expertise to operate the company's two specialised manufacturing units efficiently and plans to expand product lines to meet evolving market demands. 

While 2 out of 5 board members are independent directors, the governance ensures quality as the audit and remuneration committees are led by independent directors. 

From a control standpoint, the promoters hold a dominant 100% stake pre-issue. Post-IPO, this stake will dilute to 66.88% but promoter influence will remain firmly intact, given their high base ownership and board control.

Financial Performance 

In previous years, the topline has given a decent 54% CAGR from FY22 to FY24. However, the growth in FY25 has only been 12.1%. While the topline growth as per 9MFY26 has been on the negative side, this is a cause of concern for the company.

Margins jumped sharply, with EBITDA margin climbing from 7.3% in FY22 to 17.9% in FY24, and hitting 23.6% in FY25. That’s a big shift toward higher-value formulations and better cost control.

PAT margin improved by almost 3x in three years — from 3.8% (FY22) to 12.1% ( FY25) — showing the operating leverage finally kicking in as capacity utilisation rises. The CFO has been positive, while the working capital days have remained volatile.

Debt-equity, while improved significantly from the past year, remains slightly lower when compared to FY22, at 1.6x. This signals real balance-sheet repair and improved cash generation.

ROE and ROCE stand at 26% and 19%, respectively. The financials witnessed a surge in ROE & ROCE, when compared to FY22, placing Phytochem Remedies well above many listed peers. The company has also maintained its current ratio well over the years at around 1.

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When compared to peers, Phytochem has very strong margins and return ratios. While the EBITDA margins of the peer stand at 6%-10%, Phytochem recorded 24% of the EBITDA margin, indicating strong efficiency. The ROE & ROCE also stand higher than the listed peers. 

Coming to the valuation part, in terms of PE, while the company is fairly valued at 15.4x, the estimated EV/EBITDA is extremely high at 18.5x, when compared to the peers.

Overall, the company is giving better performance in terms of margins and returns. The valuation, however, is on the higher side than the industrial peers. 

IPO Objectives

The company will be using the proceeds for:

• Funding the capital expenditure requirements of the Company 

• Repayment/prepayment, in full or part, of all or certain outstanding borrowings 

• General Corporate Purposes 

Overall, the issue aims to strengthen Phytochem’s operational capacity while improving its financial flexibility. The combination of expansion and deleveraging positions the company for more sustainable future growth.

Strength and Risk

Final Words

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals.

Leadership: Founder-led with strong industrial experience and equity retention, ensuring aligned execution and focus on scaling the manufacturing capacity.

Moat: Plants in Jammu, close to clusters of Food, Agro and FMCG clients. Significant installed capacity with room to expand on existing land. 

Tailwinds: High growth in the Pharma and Agro market base and shift towards sustainable packaging solutions made from kraft paper.

Valuation: While the valuation is in the fair range in terms of PE, the company is overvalued on the EV/EBITDA comparison. 

Bottom Line: Phytochem Remedies has decent business performance and fundamental ratios, along with a double-digit industrial growth. The valuation, however, and the decrease in the latest revenue numbers, demand faith in continued execution. This is not a buy for investment purposes.

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