Synopsis: The company has reduced its leverage over the years from Rs. 1,254 crore in FY20 to only Rs. 97 crore in FY25 by making capital return its main focus while diversifying its product portfolio and more.
GHCL’s balance sheet transformation stands out in a sector often burdened by leverage. From ₹1,254 crore in FY20 to just ₹97 crore in FY25, the 92 percent debt reduction reflects disciplined capital allocation, steady cash flows, and a clear shift toward balance-sheet-led value creation rather than aggressive expansion.
This financial reset lends credibility to ace investor Dolly Khanna’s continued interest. GHCL’s focus on capital returns, alongside diversification into higher-margin segments, signals a maturing business model. Against an improving industry backdrop, the key question is whether deleveraging alone translates into sustained earnings and valuation re-rating.
GHCL Limited
GHCL Limited was incorporated on 14th October 1983. The Company has established itself as a well-diversified group with a well-established footprint in chemicals and consumer products segments. In Chemicals, the Company mainly manufactures Soda Ash, which is a major raw material for detergents & glass industries, and Sodium Bicarbonate.
Consumer Products operation is another business for GHCL, where it is a leader in manufacturing and selling edible salt, industrial grade sal,t and jujube honey in the country under the brand name of I-Flo.
With the market capitalization of Rs. 5,034 crore, GHCL Ltd’s shares closed on Friday at price of Rs. 524 per share, down by 2.02 percent from its previous day’s close. The share has given a return of 149 percent over the last five years.
Ace Investor Validation
Dolly Khanna’s long-term track record, marked by sharp recoveries after deep drawdowns, reinforces her credibility as a conviction-driven investor. Despite portfolio volatility over five years, her ability to reposition and compound capital highlights a disciplined, fundamentals-first approach rather than short-term market timing.
Her holding of 9,87,735 shares in GHCL as of December 2025 is a positive signal. Given GHCL’s deleveraging, capital return focus, and move into higher-margin segments, Khanna’s investment underscores confidence in the company’s improving fundamentals and long-term value creation potential.
Massive Deleveraging: the company went on a spree to reduce its debt by 92 percent over the last 6 years, from Rs. 1,254 crore in FY20 to only Rs. 97 crore in FY25.The borrowing breakup as of FY20 was Rs. 807.89 crore long-term borrowings, Rs. 268.88 crore short-term borrowings, Rs. 162.86 crore in other liabilities, and the rest from lease liabilities.
GHCL has repaid chunks of its debt in 2020, where it paid Rs 304.9 crore in 2020 itself in its goal to reduce debt, and then Rs 473.99 crore in the financial year 2021, where it explicitly mentioned the repayment. It went on to reduce it further, bringing the company’s Debt to Equity ratio down to 0.03, almost negligible in the move to achieve “debt-free” status.
The most critical achievement is the transition from a highly leveraged company to one with a Net Cash Surplus of Rs. 1,047 Crore, which it further strengthens by paying off Rs. 22 crore of debt in Q2 FY26.
Company’s Capital Return Focus: The company’s immediate capital allocation strategy has shifted to rewarding shareholders, highlighted by the recent Rs. 300 crore share buyback (representing 4 percent of the total paid-up equity capital as of March 31, 2025) at a price of Rs 725 per share. To improve key financial metrics, primarily Earnings Per Share (EPS) and Return on Equity (ROE).
The share buyback will have a direct benefit to participating shareholders to tender shares at a premium to the market price and an indirect benefit to non-participating shareholders by an increase in percentage ownership in the company. This will optimize the capital structure as it improves return metrics given the robust, net cash surplus balance sheet, without impacting future expansion projects.
Foray into New High-Margin segment: In the mid-term, the company is diversifying its business mix, which is expected to see positive contributions to earnings from initiatives in bromine and vacuum salt. The company expects around 40 percent to 45 percent EBITDA margin in this segment, around Rs 70 crore to 80 crore. They are looking forward in the long-term as well, with a plan to commission the Greenfield expansionof soda ash.
GHCL’s management remains optimistic about India for its prospects, as the Soda ash demand is based on the country’s robust global story. The company is also seeing accelerated growth coming from new applications like solar glass, which are expected to ramp up starting next year. With their diversification and growth plan, bromine and vacuum salt projects are progressing, and commissioning is on track to happen in the early 2026 quarter 4.
Support from policy makers: Management is actively seeking government support via proposed anti-dumping duties on imported soda ash to protect domestic pricing and margins, reflecting strategic engagement with policy measures to counter competitive pressures from cheap Chinese imports. GHCL has highlighted that import share has risen significantly, squeezing local margins, and sees anti-dumping duty as a key near-term lever to stabilise pricing while it pursues efficiency and diversification.
GHCL’s 92 percent debt reduction has transformed it into a net-cash company with stronger returns and shareholder-friendly capital allocation. This balance-sheet reset, combined with buybacks, entry into high-margin segments, capacity expansion, and potential policy support, strengthens earnings visibility. In this light, Dolly Khanna’s stake reflects confidence in GHCL’s improving fundamentals and long-term value creation rather than just financial cleanup.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
