Phytochem Remedies IPO

Phytochem Remedies (India) claims to have long-standing relationships with a stable customer base, including Cadila Pharmaceuticals Limited, UPL Sustainable Agri Solutions Limited, Coromandel International Limited, Anantjeet Nutriments LLP, Dhanuka Agritech Limited, and Ultimate Flexipack Limited. It reports that revenue from the sale of products grew at a CAGR of 28.87 percent over the last three fiscals, from Rs 19.91 crore in FY23 to Rs 33.07 crore in FY25, with Rs 21.92 crore recorded in the six months ended September 30, 2025.

The company claims to have improved capacity utilisation for corrugated box production from 50.54 percent in FY24 to 68.98 percent (annualised) for the six months ended September 30, 2025. It also states that it has about 90,000 square feet of unutilised land across its two manufacturing units, which is intended for future capacity expansion and new production lines.

Phytochem Remedies (India) claims to have invested in technology, including a fully automated corrugated board plant introduced in 2022. It states that this automation has enhanced operational efficiency, precision, and the ability to handle more complex packaging requirements while increasing capacity.

The company claims to have a well-diversified product portfolio, including corrugated boxes in flute combinations such as A, B, C, AB, AC, and BC, printed corrugated boxes, corrugated rolls, and corrugated pads and sheets. It reports that these products are supplied for applications across sectors such as retail, electronics, food, and pharmaceuticals.

Phytochem Remedies (India) claims that both its manufacturing units are located within the Bari Brahmana Industrial Complex in Jammu, which it describes as a well-connected industrial hub. It states that this location provides access to utilities, services, and transport infrastructure, which supports its logistics and supply chain operations.

The company has witnessed a consistent increase in its revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 20.82 crore in FY23 to Rs 32.83 crore in FY24 and Rs 36.54 crore in FY25. PAT increased from Rs 0.82 crore in FY23 to Rs 2.31 crore in FY24 and Rs 4.48 crore in FY25.

The top three customers accounted for Rs 7.74 crore (31.18 percent) of the company’s revenue for the period ended September 30, 2025; Rs 12.54 crore (34.31 percent) in FY25; Rs 12.22 crore (37.13 percent) in FY24; and Rs 7.71 crore (36.99 percent) in FY23. Any failure to retain these key customers, maintain or increase business from them, could adversely affect the company’s business, cash flows, financial condition, and results of operations.

The top supplier alone accounted for Rs 11.03 crore (66.60 percent) of the company’s total cost of goods sold for the period ended September 30, 2025; Rs 8.03 crore (34.74 percent) in FY25; Rs 4.07 crore (16.55 percent) in FY24; and Rs 5.72 crore (32.82 percent) in FY23. Furthermore, the company does not have any short-term or long-term agreement with this vendor. Any loss of this supplier, disruption in timely supplies, material cost increases, or inability to secure alternative sources on acceptable terms could adversely affect the company’s production schedules, profitability, cash flows, and overall financial condition.

Phytochem Remedies (India) is dependent on its two in-house manufacturing facilities, both located in Jammu, India, which exposes it to geographic concentration risk. Additionally, 100 percent of the company’s revenue for the period ended September 30, 2025, FY25, FY24, and FY23 was derived from this region. Any adverse political, social, economic, regulatory, or environmental developments in this region, or events such as equipment breakdowns, power interruptions, labour disruptions, natural disasters, or mandated shutdowns, could disrupt production, negatively impacting the company’s operations, customer relationships, financial condition, and cash flows.

The company reported negative cash flow from operating activities amounting to Rs 0.58 crore in FY23. Additionally, negative cash flow from investing activities amounted to Rs 8.84 crore in FY23. The company also reported negative cash flow from financing activities amounting to Rs 0.78 crore for the period ended September 30, 2025; Rs 4.66 crore in FY25; and Rs 1.43 crore in FY24. The company experienced a net decrease in cash and cash equivalents amounting to Rs 0.05 crore for the period ended September 30, 2025, and Rs 0.11 crore in FY24. Continued negative cash flows in the future could adversely affect the company’s ability to fund operations, meet obligations, and support growth, which in turn may impact its financial condition and the value of its equity shares.

As of September 30, 2025, the company had trade receivables of Rs 12.48 crore, up from Rs 9.43 crore in FY25, Rs 6.60 crore in FY24, and Rs 5.32 crore in FY23. Any delay or failure in collecting these receivables, including amounts under legal recovery, could adversely affect the company’s cash flows, financial condition, and results of operations.

Phytochem Remedies (India) is exposed to volatility in the prices of its key raw materials and consumables, such as paper, board, speciality chemicals, coatings, adhesives, BOPP/PET films, and textiles. The cost of raw materials and components consumed accounted for Rs 14.03 crore (70.82 percent) of the company’s total expenses for the period ended September 30, 2025; Rs 20.87 crore (67.88 percent) in FY25; Rs 20.83 crore (70.00 percent) in FY24, and Rs 13.61 crore (69.20 percent) in FY23. Any sustained increase in input costs or inability to pass on these increases to customers could compress margins, adversely affecting its business and profitability.

The company, its directors, KMPs, and SMPs are involved in certain ongoing legal proceedings. Adverse judgments in any of these cases could hurt the company’s business prospects.

As of November 15, 2025, the company had outstanding financial indebtedness of Rs 20.08 crore. Failure to service or repay these loans can harm the company’s operations and financial position.