About Mehul Colours Limited

BUSINESS OVERVIEW

Incorporated in 1995, Mehul Colours is engaged in the manufacturing of masterbatches—concentrated mixtures of pigments and additives used in the plastics industry to impart colour and enhance functional properties such as UV resistance, flame retardancy, and anti-static behavior. Masterbatches ensure uniform pigment dispersion, resulting in consistent coloration across plastic products.

The company also supplies customized pigment solutions, contributing to the aesthetics and performance of various plastic applications. In Fiscal 2025, revenue from masterbatches contributed 84.17%, while pigments accounted for 15.83% of the operational revenue.

The product portfolio includes:

• Colour Masterbatches – for consistent colouration

• Additive Masterbatches – offering enhancements like UV protection, slip resistance, flame retardancy, and impact strength

• Special Effect Masterbatches – providing pearl, metallic, sparkle, glitter, fluorescent, and wood-like finishes

• Filler Masterbatches – containing CaCO₃, talc, and other fillers to improve rigidity and processing efficiency

Manufacturing operations are based at two production units in Tungareshwar Industrial Estate, Vasai East, Palghar, Maharashtra, with an installed capacity of 12,84,000 kg per annum and a combined built-up area of 6,400 sq. ft. A dedicated R&D and testing lab is located at Units 12 to 15, supporting quality control, product development, and customized formulations aligned with customer needs.

In Fiscal 2025, the company served 500+ customers across industries such as stationery, toys, packaging, pipes, electrical components, and more. Revenue was geographically concentrated, with 93.17% derived from 16 Indian states and 2 Union Territories, particularly Maharashtra, Gujarat, Dadra & Nagar Haveli, and Kerala. The remaining 6.83% revenue came from exports, reaching markets like Canada, Jordan, Qatar, and Thailand over Fiscal 2025, 2024, and 2023.

As of June 30, 2025, the company had a total of 32 permanent employees. The Banker to the company is ICICI Bank Limited.

INDUSTRY ANALYSIS

India’s Chemical and Plastic Industry: A Rising Global Powerhouse

India's chemical industry stands as a cornerstone of its industrial economy, distinguished by its wide-ranging segments—including bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilizers. The country ranks as the 6th largest producer of chemicals globally and 3rd in Asia, contributing approximately 7% to India’s GDP. Currently valued at US$ 220 billion, the sector is projected to grow to US$ 300 billion by 2030 and surge to US$ 1 trillion by 2040, reflecting its pivotal role in the nation’s long-term economic trajectory.

India also commands a leading global position in agrochemicals, ranking 4th worldwide after the United States, Japan, and China. The country's colourants industry has emerged as a significant global player, holding nearly 15% of the market share, while its dye and dye intermediate exports totaled US$ 1.26 billion during April–September 2024. From April–May 2024 alone, agrochemical exports touched US$ 661.18 million, while dyes and dye intermediates recorded US$ 379.61 million and US$ 27.87 million, respectively.

The Indian government has been actively pushing policy initiatives to catalyze investment and innovation in this sector. Rs. 8 lakh crore (US$ 107.38 billion) is expected to be invested by 2025, with a particular focus on specialty chemicals, whose domestic market is forecast to grow at a CAGR of 12% to reach US$ 64 billion by the same year. The Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) policy and a proposed Production Linked Incentive (PLI) scheme aim to attract massive infrastructure investment, including a planned Rs. 20 lakh crore (US$ 276.46 billion) by 2035 for integrated manufacturing hubs.

India’s growing middle class, rapid urbanization, and increasing consumption in sectors like personal care, agrochemicals, food, paints, and coatings are expected to boost per capita chemical usage. The sector is poised to contribute US$ 383 billion to India’s GDP by 2030, with anticipated growth of 11-12% CAGR by 2027, potentially increasing India’s global share in specialty chemicals from 3% to 4%.

Parallel to this growth, the Indian plastic industry has evolved into a dynamic segment of the economy. Since its inception in 1957 with the production of polystyrene, the sector has rapidly expanded. Today, it supports over 4 million jobs, with more than 30,000 processing units—85-90% of which are small and medium enterprises. India manufactures and exports a wide array of plastic products such as raw materials, films, sheets, woven sacks, cordage, medical items, and packaging materials.

India exported US$ 2.93 billion worth of plastic products in FY25, marking a 5.4% year-on-year growth. Key export categories include plastic raw materials (27.76% share) and plastic films & sheets (15.13%), with notable growth in sectors such as flexible and rigid packaging, FIBC woven sacks, medical plastics, and FRP composites. In June 2024 alone, plastic and linoleum exports were valued at US$ 980.8 million.

The United States remains the top export destination, accounting for US$ 2.31 billion in plastic imports from India in 2022–23, followed by China with US$ 690.95 million. Exports span over 200 countries, including the UK, Germany, France, Japan, and the UAE. Recent free trade agreements with the UAE and Australia are expected to unlock new export potential.

To support this export surge, the Plastic Export Promotion Council (PLEXCONCIL) has set an ambitious target of reaching US$ 25 billion in exports by 2027. In tandem, the Indian government is developing plastic parks across the country to enhance manufacturing capabilities. Funding of up to Rs. 40 crore (US$ 5 million) per project is being provided under this initiative. Additionally, flagship programs like ‘Digital India,’ ‘Make in India,’ and ‘Skill India’ are fostering a supportive environment for growth in plastic manufacturing and innovation.

The establishment of Centers of Excellence (CoEs) and the strengthening of institutions like CIPET (Central Institute of Plastics Engineering & Technology) reflect the government's focus on research, skill development, and application diversification in polymers and petrochemicals.

Together, the chemical and plastic industries form a strategic growth engine for India, driving innovation, employment, and global trade leadership. With robust policy backing, rising domestic demand, and expanding export markets, these sectors are poised to play a transformative role in India's journey towards a US$ 5 trillion economy and beyond.

BUSINESS STRENGTHS

Integrated In-House Manufacturing and R&D
Manufacturing operations are conducted at two facilities located in Tungareshwar Industrial Estate, Vasai East, Palghar, with a combined built-up area of 6,400 sq. ft. The facilities are equipped for compounding and extrusion, enabling production of customized masterbatch solutions, supported by in-house testing and R&D capabilities.

Diversified Product Use Across Industries and Geographies
The company offers a comprehensive range of masterbatches—black, white, colour, special effects, additive, and filler masterbatches, along with pigments. These are used across a variety of plastic applications, serving a broad customer base across multiple industries and regions.

Established Customer Relationships
Long-standing relationships with several clients, some spanning over five fiscal years, have contributed to repeat business and stable growth. A dedicated sales and marketing team supports client engagement and market expansion.

Experienced Leadership
Promoted by Mr. Mehul Pravinchandra Joshi (25 years of industry experience) and Mrs. Bhakti Mehul Joshi (15 years of relevant experience), the leadership is actively involved in operations. The management team, along with an experienced research unit, provides strategic direction and industry insight to harness emerging opportunities.

BUSINESS STRATEGIES

Product Portfolio Expansion through New Manufacturing Facility
A new dedicated manufacturing unit is proposed at Survey No. 38/2, Village Majivali, Taluka Vasai, District Palghar, Maharashtra, covering 4,156 sq. meters. This facility is expected to boost the annual installed capacity from 12,84,000 kg to 21,60,000 kg, as per the Chartered Engineer Report dated July 15, 2025.

Geographical Expansion and Market Penetration
Plans are in place to broaden geographic reach by strengthening the marketing and sales network and entering new markets globally. The company has already exported to countries like Canada, Jordan, Thailand, and Qatar over the last three fiscal years and aims to further expand its international footprint.

Commitment to Quality and Customer Specifications
Emphasis is placed on adhering to customer specifications and maintaining consistent quality standards through continuous product review and timely corrective actions. Delivering high-quality, specification-aligned products is key to building customer trust and ensuring repeat business.

BUSINESS RISK FACTORS & CONCERNS

High Revenue Dependence on Masterbatches
A major portion of operational revenue is derived from masterbatches, contributing 84.17% in FY25, 82.29% in FY24, and 79.23% in FY23. Any decline in demand or sales for this core product may adversely impact overall business performance and financial stability.

Customer Concentration Risk
Revenue is significantly reliant on a limited number of customers. The top ten customers contributed 48.19% in FY25, 49.99% in FY24, and 56.38% in FY23. The absence of long-term contractual commitments increases vulnerability to order cancellations, delays, or loss of key clients, potentially affecting cash flows and operational results.

Geographical Concentration of Operations
Manufacturing operations are concentrated in Palghar, Maharashtra, making the business susceptible to regional disruptions such as natural disasters, socio-political unrest, or logistical challenges. Such events could severely affect production, supply chain continuity, and overall operations.

Summary :
Mehul Colours faces key risks including over-dependence on masterbatch sales, customer concentration without long-term contracts, and regional exposure due to manufacturing concentration in Palghar. These factors could materially impact business continuity, growth, and financial performance if not mitigated effectively.