Galaxy Surfactants Ltd is a truly Indian multinational company and a leading manufacturer of ingredients for the home and personal care ( HPC ) industry. It is fully entrenched and vertically integrated in the HPC industry with over 215 product grades across seven strategically located facilities having in-house project execution capabilities. Five facilities are spread across India while there is one each in Egypt and the US. Galaxy Surfactants is serving over 1400 clients across 80 countries with a strength of over 2000 employees. It is India’s largest manufacturer of oleochemical based surfactant , especially for the speciality care products in the home care and personal care industry. The company’s focus is in the personal and home care segment such as hair, care, oral care, skincare, cosmetics, toiletries, etc . Galaxy Surfactants is in a business which has a very high entry barrier and therefore has the potential to grow exceedingly well over other competitors during the next few years , posting decent margins and profits.
Since the year 2016, the company has grown by 1.5 times in volume, 2.0 times in terms of EBITDA and 3.0 times in terms of net profit , thereby tripling its earning and doubling its operation over the last eight years. The period FY 20–23 saw the company with low single digit volume growth while the EBITDA improved significantly from Rs 16700 per metric ton to Rs 25000 per metric ton resulting in the profit growing by 1.6 times per metric ton in 2024. The company realised that this was not a sustainable model on the back of negligible volume growth . Hence, it was critical for the company to get the volume growth back and even though the profitability took a hit in FY23–24 . It was important to restore the demand and supply cycle and improve margin simultaneously going ahead. Globally , the Suppliers have been constrained in terms of the incoming feedstock as many of the ingredients and feedstock are imported and it is very important to manage the incoming supply chain and outgoing supply chain. Managing incoming raw material and to get the material produced and delivered is the key for Galaxy Surfactant going forward.
On the other hand , with improvement in accessibility, rising value and quality based consumption, there is a lot of head room for substantial growth in the home and personal care industry. The company expects the destocking cycle to be over in the middle of this Calender year and the next restocking cycle to commence from the third quarter of the current financial year. This would help demand for premium specialities plus accelerated approvals will ensure new launches and sustained traction for new products going ahead.
Galaxy Surfactants has a capital expenditure plan of around Rs 200 crores looking to capitalise on suitable growth opportunities for the company to grow faster in the years ahead . While the consumption sector has remained resilient for the country over the last few years , rural recovery and above average rainfall will hold the key for momentum to sustain in 2024-25 . While quarter on quarter stabilisation of EBITDA along with volume growth is a major positive but geopolitical disruption could turn out to be major macro risk . The Galaxy Surfactants stock is currently quoting at Rs 2740 on the bourses and can be a dark horse in terms of the price appreciating significantly over the next one year time frame.