TGV SRAAC Limited, the flagship entity of the **TGV Group**, is a leading Indian manufacturer of **Chlor-Alkali**, **Chloromethanes**, and **Oils & Fats** derivatives. Headquartered in Kurnool, Andhra Pradesh, the company operates a highly integrated production model where by-products from primary chemical processes serve as essential raw materials for downstream value-added products. This circular approach optimizes resource efficiency and provides a strategic buffer against the inherent cyclicality of the chemical industry. --- ### **Integrated Manufacturing & Product Ecosystem** The company’s operations are structured into three synergistic segments, supported by advanced **Membrane Cell Technology** and **Zero Gap technology** in electrolysers to ensure high-purity output. #### **1. Chemicals Segment (Core Driver)** * **Chlor-Alkali:** Produces **Caustic Soda (Lye & Flakes)**, **Caustic Potash (Potassium Hydroxide)**, **Chlorine**, **Hydrochloric Acid (HCL)**, and **Sodium Hypochlorite**. * **Chloromethanes (CMS):** Converts Chlorine into high-value derivatives including **Methylene Chloride (MDC)**, **Chloroform**, and **Carbon Tetra Chloride**. #### **2. Oils and Fats Segment** * Focuses on **Castor Oil derivatives** (Hydrogenated Castor Oil, 12 Hydroxy Stearic Acid), **Fatty Acids** (Stearic Acid), and **Soap Noodles**. * *Note:* This segment has recently been **scaled down** to mitigate the impact of thin margins and high raw material price volatility. #### **3. Power Segment** * A critical support unit providing captive **Solar**, **Wind**, and **Thermal** power to the energy-intensive chemical units. #### **Production Capacity Profile (Projected to April 2026)** | Product | Total Declared Capacity (TPA) | Recent/Upcoming Additions (TPA) | | :--- | :---: | :---: | | **Caustic Soda** | **332,150** | 73,000 (Mar 2024) | | **Liquid Chlorine** | **279,960** | 17,160 (Apr 2026) | | **Chloromethanes (Total)** | **139,914** | 12,404 (Jan 2025) | | **Methylene Chloride** | **98,550** | 17,817 (Apr 2026) | | **Potassium Hydroxide** | **76,650** | 27,150 (Apr 2026) | --- ### **Strategic Growth: Capacity Expansion & Backward Integration** TGV SRAAC is currently executing an aggressive capital expenditure program to enhance its market share and internalize Chlorine consumption. * **The ₹350 Crore Expansion:** In January 2025, the Board approved a major project to add **450 MT/day** of **Caustic Soda** and **400 MT/day** of **Chlorine** capacity. * **Chloromethanes Pivot:** To counter unremunerative market prices for Chlorine (a joint product of Caustic Soda), the company is increasing CMS capacity by **125 TPD** to reach a total of **375 TPD**. This allows the company to consume Chlorine internally to produce higher-margin MDC and Chloroform. * **R&D and Process Optimization:** * Successfully shifted the CMS production ratio to **65:31:4** (MDC: Chloroform: CTC) to align with market demand. * Ongoing efforts to reduce impurities in Chloroform and MDC to **<10 ppm**. * Efficiency upgrades include the replacement of **262 Ion exchange membranes** and **98 high-voltage Anodes**. --- ### **Energy Management & Renewable Transition** With power accounting for approximately **50%** of production costs, the company is aggressively transitioning to captive renewable energy to protect margins. * **Solar Power Expansion:** Total capacity reached **57.90 MWp** in March 2026, with a long-term strategic target of **100 MW**. * **Thermal Integration:** Commissioned a **10 MW Back Pressure Steam Turbo Generator** in September 2025 for 100% captive use. * **Asset Rationalization:** The **Bellary Power Plant** is currently closed following PPA expiry; the company is seeking to sell or relocate the machinery. A non-viable **4.89 MW Wind Mill** at Ramgiri was decommissioned in December 2024. | Solar Capacity Milestone | Date | Total Capacity (MWp) | | :--- | :--- | :--- | | Base Capacity (FY24) | Aug 2024 | **22.75** | | Phased Additions | Jan - Aug 2025 | **37.90** | | Acquisition from Group Co (SRHHL) | Sep 2025 | **45.40** | | **Current Total Capacity** | **Sep 2025** | **55.40** | --- ### **Financial Performance & Credit Profile** The company has demonstrated resilience, recovering from global volatility with improved realizations in the Chlor-Alkali segment. #### **Key Financial Metrics** | Metric (₹ in Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Gross Turnover** | **2,026.47** | **1,792.75** | **2,706.41** | | **Net Profit Before Tax** | **125.56** | **60.99** | **442.14** | | **Total Chemical Production (MT)** | **407,894** | **369,546** | **372,453** | #### **Solvency and Liquidity** * **Credit Rating:** Reaffirmed at **CARE A; Stable** (January 2026). * **Leverage:** Overall gearing remains conservative at **0.29x** (as of March 2024). Total Debt / PBILDT is maintained **below 2x**. * **Debt Management:** Prepaid bank loans of **₹71.22 Crores** in FY23. Secured over **₹300 Crores** in Capex LC facilities from major lenders (IDBI, Indian Bank, Federal Bank) for ongoing expansions. * **Shareholder Returns:** Recommended a final dividend of **₹1/- (10%)** per equity share for FY25. --- ### **Sustainability, ESG & Circular Economy** TGV SRAAC integrates environmental stewardship into its operational core: * **Zero Liquid Discharge (ZLD):** Achieved for Chlor-Alkali, Chloromethanes, and Co-generation plants. * **Waste Valorization:** A **Sulphate Recovery Plant** produces **4-5 MT/day** of saleable anhydrous sodium sulphate while reducing solid waste by **50%**. * **Social Impact:** Approximately **90%** of the workforce is recruited locally from the Kurnool region. * **Supply Chain:** Sourced **31.30%** of inputs from **MSMEs** in FY25. --- ### **Risk Factors & Mitigation Strategies** #### **1. Market & Operational Risks** * **Price Volatility:** ECU realizations dropped from **₹55,000–₹60,000/MT** in FY23 to **₹35,000/MT** in FY24, compressing PBILDT margins from **23.20%** to **8.69%**. * **Technical Disruptions:** A transformer failure in October 2025 caused a temporary production loss of **120 TPD** of Caustic Soda. * **Raw Material Sourcing:** High-quality salt is sourced from Gujarat, increasing transportation costs. **Potassium Chloride** remains a major import dependency. #### **2. Regulatory & Financial Risks** * **Power Costs:** Subject to **FPPCA** charges (₹40.48 Cr in FY24) imposed by APERC. * **Labor Codes:** New regulations effective November 2025 have increased **gratuity liabilities**. * **Forex Exposure:** Relies on **natural hedging** (Imports: **₹247.31 Cr** vs. Exports: **₹72.90 Cr** in FY24) rather than active derivatives. #### **3. Financial Sensitivities (Rating Triggers)** | Positive Trigger (Upgrade) | Negative Trigger (Downgrade) | | :--- | :--- | | TOI > **₹2,000 crore** | **PBILDT** margin < **15%** sustained | | **PBILDT** margin > **20%** sustained | Total Debt / **PBILDT** > **2x** | | Total Debt / **PBILDT** < **1x** | Heavy dumping of **Caustic Soda** | --- ### **Investment Summary** TGV SRAAC Limited presents a case of a disciplined industrial player transitioning toward a higher-margin, energy-independent future. While the company faces cyclical headwinds and power cost pressures, its aggressive expansion into **Chloromethanes**, its growing **100 MW Solar target**, and its robust **integrated circular model** position it to capture long-term growth in the Indian chemical sector.