Kronox Lab Sciences approves Dahej SEZ plant acquisition to expand chemical manufacturing capacity

Kronox Lab Sciences has approved the acquisition of a chemical manufacturing plant measuring about 5,000 square metres in Gujarat’s Dahej Special Economic Zone, as the specialty fine chemicals maker seeks to add capacity for business growth.

The board cleared the transaction at its meeting on October 14, 2026. The company will acquire the plant asset located at Z/80 in the Dahej SEZ from Axiom Chemicals Private Limited. It will not acquire Axiom Chemicals itself, its shares or control of the seller entity.

Kronox did not disclose the cash consideration for the transaction. The cost will include the asset purchase price and related Taxes, duties, stamp duty, registration charges and other incidental expenses. The acquisition will be funded through internal accruals.

The proposed transaction gives Kronox an operating chemical manufacturing asset in Dahej, complementing its existing manufacturing presence in the Padra area of Vadodara. The company manufactures high-purity specialty fine chemicals used across pharmaceutical, nutraceutical and food-grade applications. However, it has not disclosed the acquired plant’s installed capacity, equipment configuration, product suitability or the capital expenditure needed before production can begin.

The purchase is part of a broader history of capacity development. Kronox had acquired 20,471 square metres of land for a proposed Unit IV in 2022, according to its FY2025-26 annual report. The latest Dahej acquisition could provide another manufacturing location, although the company has not stated whether the plant will be used for existing products, new product lines or additional volumes.

Its recent financial performance offers some context for the capacity move. In the June 2026 quarter, net sales rose 16.88 per cent year-on-year to Rs 28.39 crore, while profit after tax increased 16.31 per cent to Rs 7.30 crore. Profitability, however, moderated sequentially, with the PBIDT margin excluding other income declining to 31.70 per cent from 36.44 per cent in the March quarter as expenditure grew faster than sales.

For FY2025-26, Kronox reported revenue from operations of Rs 101.22 crore, up 1 per cent from the preceding year, while profit after tax rose 8.61 per cent to Rs 27.66 crore. The acquisition therefore comes after a year of modest revenue growth but improving profitability, followed by stronger year-on-year sales growth in the first quarter of FY2026-27.

The company had a relatively low borrowing base on March 31, 2026, with standalone borrowings of Rs 1.61 crore. It also held Rs 45.99 crore in Bank balances with maturities of less than 12 months, apart from Rs 18.54 crore in longer-term fixed deposits. Since the purchase value remains undisclosed, the financial impact of the deal and the extent of internal funds deployed cannot yet be assessed.

Completion is expected within one month, subject to definitive agreements and regulatory clearances. These include approval from the Development Commissioner or SEZ authority for the transfer of the unit or land-lease rights, along with approvals or consents from the State Pollution Control Board, GIDC or another relevant development authority.

Kronox said Axiom Chemicals is not a related party and that no promoter, promoter group or group company has an interest in the seller or the transaction.

As of 12:34 p.m. on October 15, 2026, Kronox Lab Sciences shares were trading at Rs 218.00, down 0.73 per cent from the previous close of Rs 219.60. The stock was just 0.73 per cent below its 52-week high of Rs 219.60 and had gained 35.81 per cent over the preceding year, compared with a 5.86 per cent decline in the BSE 500, an outperformance of 41.67 percentage points.

Disclaimer: The article is for informational purposes only and not investment advice.