Pasupati Acrylon Ltd (₹72.54): Why Patience, Not Chasing, Is the Smartest Way to Own This Earnings Turnaround
Net profit of ₹32.01 crore in Q2FY27, up 97.6 percent year on year. Six straight quarters of rising profit. A trailing P/E near 5.8x. Ethanol capacity heading to 240 KLPD by December. Our plan: accumulate on declines, in three disciplined tranches.
| PARTICULARS | DETAILS |
| Stock | Pasupati Acrylon Ltd (NSE: PASUPTAC | BSE: 500456) |
| Reference price | ₹72.54 (early November 2026) |
| 52-week range | Approximately ₹40 to ₹79 |
| Market capitalisation | Approximately ₹646 crore (about 8.91 crore shares) |
| Trailing EPS | About ₹12.48 (Q3FY26 to Q2FY27, our calculation) |
| Trailing P/E | About 5.8x |
| Promoter holding | 65.87% (September 2026 pattern), unchanged for many consecutive quarters, with no pledged shares |
| SumanSpeaks stance | Positive | Buy on dips | Accumulate in staggered tranches |
1 | The Short Version: Great Business Momentum, Better Entry Discipline |
That is exactly why we are not asking you to chase. Our view is positive on the business and disciplined on the entry. Accumulate on declines, in tranches, and let the stock come to you.
Interestingly, earnings have moved faster than the price. Over the last four reported quarters the company has earned about ₹12.48 per share, so the stock trades near 5.8 times trailing earnings. A business compounding profit at this pace rarely stays at that multiple for long. But small-cap prices never climb in a straight line, and the buyers who do best are the ones who let volatility work for them.
2 | The Business: Three Engines Under One Roof |
Pasupati Acrylon was incorporated in 1982 and set up its acrylic fibre operations with technical collaboration from SNIA BPD of Italy. The company is headquartered in New Delhi, with its manufacturing base at Thakurdwara in Moradabad district, Uttar Pradesh. Vineet Jain, Executive Chairman and Managing Director, leads the promoter group.
- Acrylic fibre: Sold under the ACRYLON brand and used in sweaters, shawls, blankets, carpets and upholstery. Installed capacity is 42,000 MT a year, and the company holds ISO 9001:2015 and OEKO-TEX Standard 100 certifications.
- CPP films: Cast polypropylene films in natural, white and metallised variants for flexible packaging, with capacity of 10,000 MT a year on imported European machinery. This segment moved from a small operating loss in FY25 to a profit in FY26.
- Ethanol and DDGS: A grain-based distillery commissioned in March 2025, which supplies ethanol to oil marketing companies and sells DDGS as a by-product.
Finally, notice how the three legs complement each other. Fibre follows the winter-wear season, packaging follows everyday consumption, and ethanol follows national fuel policy. No single leg has to carry the whole company.
3 | FY26: The Year the Numbers Changed |
FY26 was the first year revenue crossed ₹1,000 crore, and profit grew far faster than sales. That gap is the heart of the story.
| ₹ CRORE | FY26 | FY25 | CHANGE |
| Revenue from operations | 1,010.16 | 621.43 | +62.6% |
| EBITDA | 119.22 | 56.20 | +112.1% |
| Profit before tax | 94.36 | 47.72 | +97.7% |
| Net profit | 69.91 | 35.38 | +97.6% |
| EPS (₹) | 7.84 | 3.97 | +97.5% |
EBITDA margin for the year came to 11.8 percent including other income. On the company's own definition, the reported operating margin was 10.43 percent against 7.94 percent a year earlier. The auditors, B.K. Shroff & Co., gave an unqualified opinion on the accounts. CARE Ratings pointed to the stabilisation of the new ethanol plant as a primary driver of the improved operating performance, and the CPP film segment moving into operating profit added to it.
Segment Scorecard, FY26
| SEGMENT | REVENUE (₹ CR) | SHARE OF REVENUE | SEGMENT PROFIT BEFORE INTEREST (₹ CR) | FY25 SEGMENT PROFIT (₹ CR) |
| Acrylic fibre | 587.03 | 58.1% | 65.96 | 50.48 |
| CPP films | 98.90 | 9.8% | 7.63 | (0.31) |
| Ethanol | 324.22 | 32.1% | 33.71 | 0.04 |
| Total | 1,010.16 | 100% | 107.30 | 50.21 |
Source: segment note in the FY2025-26 Annual Report. Ethanol began commercial production on 25 March 2025, so its FY25 figures cover only a week.
Ethanol contributed about 32 percent of FY26 revenue and roughly 31 percent of segment profit, which means the new engine is carrying its weight without overshadowing the core. Acrylic fibre profit rose about 31 percent on sales volume that grew nearly 12 percent, to 37,878 MT. CPP film volumes grew about 19 percent.
4 | Q2FY27: Six Quarters, Six Steps Up |
The September quarter extended the run. Revenue was ₹274.74 crore, down about 2 percent from ₹280.25 crore a year earlier, but up roughly 15 percent over Q1FY27. Net profit nearly doubled to ₹32.01 crore from ₹16.20 crore.
| QUARTER | REVENUE (₹ CR) | NET PROFIT (₹ CR) | EPS (₹) |
| Q1FY26 | 216.0 | ~1.8 | 0.20 |
| Q2FY26 | 280.3 | 16.20 | 1.82 |
| Q3FY26 | 269.2 | ~25.7 | 2.88 |
| Q4FY26 | 244.6 | 26.28 | 2.95 |
| Q1FY27 | ~238.3 | ~27.4 | 3.07 |
| Q2FY27 | 274.74 | 32.01 | 3.59 |
Figures marked ~ are derived from the company's full-year and half-year disclosures.
Look at the profit column. It has risen every single quarter for six quarters in a row. Few small-caps can show that kind of staircase.
The margin story is just as encouraging. On our calculation, Q2FY27 EBITDA of ₹47.37 crore works out to about 17 percent of revenue, against roughly 10 percent a year ago. EBITDA grew 66 percent, profit before tax doubled to ₹42.48 crore, and EPS for the quarter was ₹3.59 against ₹1.82.
Revenue for the half year was ₹513 crore, profit before tax ₹79.17 crore and EPS ₹6.66. The earnings base has clearly stepped up, and that is what the current price has to be measured against.
5 | Ethanol: The Capacity Ladder |
Ethanol is the engine that changed the earnings profile, and the company keeps adding to it in small, low-cost steps.
| WHEN | CAPACITY | WHAT HAPPENED |
| March 2025 | 150 KLPD | Plant commercialised. |
| May 2026 | 180 KLPD | UP Excise Department consent, achieved without fresh capital outlay. |
| 13 October 2026 | 240 KLPD | UP Excise consent for 60 KLPD more (a 33.3% increase) through debottlenecking. |
The annual report puts the first full year in numbers. The plant produced 41,923 KL and sold 41,162 KL of ethanol in FY26, earning segment revenue of ₹324.22 crore and segment profit of ₹33.71 crore before interest. Product purity was 99.83 percent. That output is roughly three-quarters of nameplate on a 365-day basis, so the existing plant still has room to run harder before any new capacity arrives.
The estimated outlay for the latest step is about ₹25 crore, funded entirely from internal accruals, with completion targeted by the end of December 2026. That is less than a quarter of the company's trailing twelve-month profit, so the expansion does not lean on the balance sheet.
For a sense of scale, 60 KLPD of extra capacity is about 19.8 million litres a year over 330 operating days. FY26 segment revenue works out to about ₹79 per litre sold, including DDGS. At ₹70 to ₹79 per litre, the extra capacity is worth roughly ₹140 to ₹155 crore of annual revenue at full utilisation, or about 14 to 15 percent of FY26 sales. This is an illustration, not a forecast. Ethanol prices are set by the oil marketing companies, so actual numbers depend on their allocations, grain costs and plant utilisation.
The policy backdrop remains supportive. India notified fuel standards in May 2026 that accommodate blending of up to 30 percent ethanol in petrol, and Uttar Pradesh is among the leading ethanol-producing states. DDGS adds a second revenue line from the same grain.
Investors should watch three milestones in order: regulatory approval, commissioning, and then revenue. The first is done. The next two are the catalysts that sit ahead.
6 | Balance Sheet and Credit Rating: A Comfortable Base |
| FY26 BALANCE SHEET | ₹ CRORE |
| Net worth | 435.42 |
| Total assets | 637.62 |
| Total outside liabilities | 202.20 |
| Borrowings (non-current plus current) | 107.10 |
| Cash, bank balances and current investments | 150.00 |
| Net cash (our calculation) | About 42.9 |
| Debt-to-equity | 0.25x (0.30x in FY25) |
In June 2026, CARE Ratings upgraded the long-term bank facilities from CARE BBB+ to CARE A- (Stable) and the short-term facilities from A2 to A2+. CARE put gearing at 0.33x as of 31 March 2026 on its own definition, and described liquidity and debt coverage as adequate to healthy.
The annual report records return on net worth of 17.49 percent, up from 10.21 percent, and return on capital employed of 20.54 percent, up from 11.86 percent. Interest coverage improved to 7.51x from 5.49x, and the current ratio stands at 4.25x. The company holds more cash and liquid investments than debt, so it is a net-cash business at the March 2026 balance sheet date. The board declared no dividend for FY26, keeping every rupee inside a business that is earning well.
Ownership is as stable as the earnings are strong. The promoter group holds 65.87 percent in the September 2026 pattern, the same figure reported in every quarter since at least March 2025, and none of those shares is pledged or otherwise encumbered. All of them are held in dematerialised form. Vineet Jain personally holds 18.91 percent, and the balance of the promoter stake sits in family holding entities such as Gurukripa Finvest (10.10 percent), Sulabh Plantation & Finance (9.26 percent), Arihant Exports (6.48 percent) and Shubh Exim (5.05 percent).
Foreign institutions hold roughly half a percent, domestic institutions about 0.2 percent, and the public about 33.4 percent. Institutions have barely arrived, which means any future entry is additive and not yet in the price. That is a quiet but important supportive factor for a dip-buyer.
The exchange filing adds two clean points. Total equity stands at 8,91,33,121 shares, and there are no warrants, ESOPs, convertibles or partly paid shares, so the fully diluted share count is identical to the basic count. Finally, the company has more than 63,000 shareholders, so the stock is widely held even though institutions are scarce.
7 | Valuation: Three Lenses, One Message |
| LENS | BASIS | RESULT |
| Trailing P/E | EPS of about ₹12.48 over the last four quarters | About 5.8x |
| FY26 P/E | EPS of ₹7.84 | About 9.3x |
| Annualised H1FY27 | EPS of ₹6.66 doubled to ₹13.32 | About 5.4x |
| Price to book | Book value was about ₹48.9 a share at March 2026; we estimate near ₹55 after H1FY27 profit | About 1.3x |
| Earnings yield | Trailing profit of about ₹111 crore on market cap of about ₹646 crore | About 17% |
| Graham Number (FY26 basis) | Square root of 22.5 x EPS x book value | About ₹92.8 |
| Graham Number (trailing basis) | Same formula on trailing EPS and estimated book value | About ₹125 |
Trailing EPS, book value and the Graham Numbers are SumanSpeaks calculations from company disclosures. The Graham Number is a classical benchmark, not a price target.
The pattern is consistent. On every lens that uses recent earnings, the stock looks inexpensive. Only the older FY26 figure pushes the P/E above 9x, and that figure is already out of date.
Net of that cash surplus, the market is valuing the operating business at about ₹603 crore. Our medium-term value zone is ₹92 to ₹105. The lower end matches the Graham Number on FY26 figures, and the upper end matches the 12-month target of one research desk. From today's price that implies roughly 27 to 45 percent upside. From the dip prices in our plan below, it is considerably more.
8 | The Buy-on-Dips Framework |
Here is the core of this report. A stock can be excellent and still be a poor buy at the wrong moment. With a market capitalisation of about US$70 million at recent exchange rates and institutional holding of well under one percent, Pasupati Acrylon moves on sentiment as much as on fundamentals. That volatility is a gift to the patient buyer.
| Case file |
The August 2026 Dip: What the Chart Taught Us
The stock climbed from ₹44 in January to about ₹79 at its 52-week high. Then it slipped to ₹59 by 14 August, a fall of roughly a quarter, while the business kept improving. By 10 September it was back at ₹67.97, by 18 September at ₹70.48, and it now stands at ₹72.54.
Anyone who bought only after the rally paid ₹70 or more. Anyone who waited for the dip had a window near ₹59 to ₹60, and the earnings data since then has only strengthened the case.
| DATE | PRICE (₹) |
| 21 Jan 2026 | 44.10 |
| 6 Mar 2026 | 48.25 |
| 29 Apr 2026 | 50.71 |
| 8 May 2026 | 54.60 |
| 15 Jun 2026 | 69.25 |
| 52-week high (before mid-Aug) | About 79 |
| 14 Aug 2026 | 59.00 |
| 10 Sep 2026 | 67.97 |
| 18 Sep 2026 | 70.48 |
| Reference price | 72.54 |
The Three-Tranche Plan
| TRANCHE | SHARE OF PLANNED CAPITAL | ENTRY ZONE | TRAILING P/E AT MID-POINT | PRICE TO BOOK AT MID-POINT |
| Tranche 1 | 30% | ₹68 to ₹70 | About 5.5x | About 1.24x |
| Tranche 2 | 35% | ₹62 to ₹65 | About 5.1x | About 1.14x |
| Tranche 3 | 35% | ₹55 to ₹58 | About 4.5x | About 1.02x |
Weighted average cost if all three tranches fill: about ₹63. The zones follow the stock's own trading history this year, including the ₹54.60 close of May and the ₹59 of August.
Notice what happens at Tranche 3. The stock would trade close to its estimated book value while earning at a rate that gives a P/E under 5x. That is the kind of margin of safety small-cap investors rarely get on a company with a rating upgrade behind it.
Five Rules for Using the Plan
- Buy dips that come from market-wide selling, profit-booking or thin volume. These are noise, and noise is where the opportunity lies.
- Never chase the unfilled tranches. If the stock keeps rising, the position you already hold is working for you, and that is a good outcome.
- Place limit orders and avoid market orders. With modest daily volumes, a limit order protects your price.
- Spread entries across weeks, not hours. Time diversification matters as much as price diversification in a stock of this size.
- Pair the dip rule with a results rule. If two consecutive quarters show profit falling because margins are compressing, and not because of a market sell-off, pause the remaining tranches and reassess.
9 | The Catalyst Calendar |
- By end-December 2026: Targeted completion of the 240 KLPD ethanol debottlenecking.
- Mid-February 2027: Q3FY27 results, based on last year's reporting pattern. The comparison base is higher here, so the margin trend matters as much as the headline profit.
- Late May 2027: Q4FY27 and full-year FY27 results, the first to show the expanded ethanol capacity.
- Every quarter: Oil marketing company ethanol allocations, which set the volume visibility for the distillery.
- Winter season: Seasonal demand for sweaters, shawls and blankets supports acrylic fibre volumes.
Incidentally, small-caps often get re-rated around results dates. After the Q2FY26 results in November 2025, the stock rose about 7 percent in a single session. A patient position built in the weeks before such events tends to be a comfortable one.
10 | For NRI and International Readers |
US-based and Gulf-based NRIs can access this stock through their NRE or NRO portfolio investment scheme accounts with an Indian bank and broker. Check the current FEMA rules and the aggregate NRI shareholding limit with your bank before placing orders.
Two practical points apply. First, NRIs are already on the register, holding about 10.5 lakh shares, or roughly 1.2 percent of the equity, according to the exchange shareholding filing. The stock also trades for under one US dollar a share, so tranche sizes are easy to manage. Second, our long-standing view is that the rupee is more likely to firm than weaken from here. The annual report shows that 53.4 percent of FY26 raw material consumption was imported, and it names USD movement as a margin factor. A firmer rupee therefore lowers the company's input cost, and it raises the dollar value of your profits when you repatriate them.
11 | What the Tranche Strategy Protects You From |
Every small-cap carries a few variables worth watching, and the dip plan is built around them. Acrylic fibre margins depend on feedstock prices, and the company's own spreads have been favourable through FY26 and H1FY27. Ethanol prices are set by the oil marketing companies, and revenue depends on their allocations and on grain costs, which is why the quarterly allocation data matters. Exports were only about 3 percent of FY26 revenue, so the company's fortunes rest firmly on the Indian market.
Liquidity is the third variable. With a market cap near ₹646 crore and institutions holding well under one percent, large orders move the price. Staggered buying with limit orders is the simplest way to keep your average cost clean.
12 | The SumanSpeaks Verdict |
Pasupati Acrylon has moved from a cyclical fibre story to a three-engine business with a growing ethanol arm, a rating upgrade, a comfortable balance sheet and six quarters of rising profit. At about 5.8 times trailing earnings, the price already asks very little of the future.
| SUMANSPEAKS VIEW | DETAIL |
| Stance | Positive. |
| Strategy | Buy on dips. Accumulate on declines in three staggered tranches. |
| Entry zones | ₹68 to ₹70, ₹62 to ₹65 and ₹55 to ₹58. |
| Medium-term value zone | ₹92 to ₹105, over a 12 to 18 month horizon. |
| What to watch | Ethanol commissioning by December, margin trend in Q3FY27, and OMC allocations. |
| Review rule | Pause fresh buying if two consecutive quarters show falling profit on margin compression. |
For personalized stock market insights and guidance, feel free to reach out at: sumanm2007s@gmail.com | suman2005s@rediffmail.com
| SumanSpeaks | Estd 2006 | sumanspeaks.blogspot.com |
.jpeg)
.jpeg)
Comments