After nearly a year of relentless weakness, Epigral Limited is suddenly back in the spotlight. A fresh report from Emkay Research has injected new optimism into this battered chemical stock, highlighting a powerful global trigger that could dramatically change its fortunes. With an ambitious capacity expansion, improving financial ratios, and a bold ₹2,000 target price, the big question now is: Is Epigral gearing up for a sharp comeback?
Epigral Share Price: A Painful Year, But Signs of Revival
Epigral Limited, formerly known as Meghmani Finechem, has faced intense selling pressure over the past year. The stock has fallen nearly 30% in one year and corrected sharply over the last three months. However, recent trading action suggests selling pressure may be easing. On January 14, 2026, the stock closed at ₹1,173.90, gaining around 1%, indicating early signs of stabilisation.
What has changed the narrative is not short-term price movement, but a structural global trigger that could reshape the company’s profitability outlook.
China’s VAT Policy Change: The Game-Changer for Epigral
According to Emkay Research, China will scrap the 13% VAT rebate on PVC exports from April 1, 2026. This move is expected to make Chinese PVC more expensive in global markets. As a result, the CPVC–PVC price spread is likely to improve, which is critical for Epigral’s margins.
Over the past six months, CPVC resin prices had fallen sharply by nearly 40–45%, hurting profitability across the sector. With Chinese exports losing their tax advantage, CPVC prices are expected to stabilise and potentially move higher. Since Epigral imports most of its PVC from China and Taiwan for CPVC production, this policy shift directly enhances its pricing power and margin outlook.
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Capacity Expansion: The Growth Engine Kicks In
Epigral is not just benefiting from external factors. Internally, the company is in the middle of a major capacity expansion cycle, which is expected to be completed by September 2026. Once operational, these projects are likely to significantly boost revenue and operating leverage from FY27 onwards.
Epigral Capacity Expansion Snapshot
| Segment | Current Capacity | Post-Expansion Capacity |
|---|---|---|
| CPVC Resin | 75,000 TPA | 1,50,000 TPA |
| ECH Plant | 50,000 TPA | 1,00,000 TPA |
Alongside this, the Chlorotoluene project has already been commissioned, and meaningful revenue contribution is expected from FY27. These expansions position Epigral for a much stronger earnings cycle in FY27–FY28.
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Financial Outlook Improves Sharply
Emkay Research expects Epigral’s financial metrics to improve steadily as new capacities ramp up and CPVC pricing recovers. Revenue growth is projected at a 14% CAGR between FY25 and FY28, while profitability is also set to strengthen. Return ratios are expected to trend higher, with RoE projected to reach 16.6% by FY28, supported by improving margins and operating efficiency.
Balance sheet health also looks comfortable, with net debt to EBITDA expected to decline to just 0.8x by FY28, giving the company flexibility to fund growth without excessive leverage.
Shareholding Trend Signals Domestic Confidence
Despite weakness in the stock price, promoter confidence remains strong, with holdings at 68.83%. While foreign institutional investors have slightly reduced their stake, domestic institutional investors have increased exposure, signaling growing confidence among Indian long-term investors in the company’s turnaround story.
What Does Epigral Do and Why It Benefits Most?
Epigral operates India’s largest CPVC plant at Dahej, Gujarat, and has a diversified portfolio spanning CPVC resin, Epichlorohydrin (ECH), hydrogen peroxide, and caustic soda. As a specialty chemicals and chlor-alkali player, Epigral stands to benefit disproportionately from global supply-side changes, especially policy shifts in China.
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What’s Next for the Stock?
According to Emkay Research, the combination of China’s VAT policy change, CPVC price recovery, doubling of capacity, and improving return ratios forms a compelling medium-term investment thesis. The brokerage has maintained a BUY rating with a target price of ₹2,000, implying an upside of over 80% from current levels.
While short-term volatility cannot be ruled out, the pressure phase appears to be easing. If execution stays on track, FY27–FY28 could mark the beginning of a strong growth cycle for Epigral.
Final Verdict
Epigral’s story is no longer just about a beaten-down stock—it is about timing, policy-driven opportunity, and capacity-led growth. With a rare global trigger and company-specific expansion aligning together, this chemical stock may be quietly setting up for one of the strongest turnarounds in the sector.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
