SK Minerals to spend ₹20 cr to triple capacity, chase higher-margin manufacturing
Management wants manufacturing at half of revenue in three years. A new halogen-free additive plant is in trials with five customers.
— 2 earlier stories on SK Minerals & Additives Ltd. →What's new
- SK Minerals targets manufacturing for 50% of revenue within three years, up from the current trading-led mix.
- The ₹20 crore capex program will triple capacity to 18,000 MT by FY28.
- A halogen-free flame retardant plant is in trials with five customers, with ₹100-120 cr annual revenue potential.
Why this matters
The shift matters because manufacturing gross margins run 30%, versus 21% for the trading business that dominates today. For a nano-cap, a ₹20 crore bet to triple capacity is not incremental. It's the entire strategy in one number.
What we're watching
- Whether customer trials convert to orders within the three-to-six-month commercialization window.
- Capex execution and the pace of capacity ramp toward 18,000 MT.
- The revenue mix as manufacturing climbs from its current base.
The full read
SK Minerals wants to stop being a trader and start being a maker. Management told the concall it will spend ₹20 crore to triple capacity to 18,000 MT by FY28 and aims for manufacturing to reach 50% of revenue. The math is simple: manufacturing gross margins run 30%, versus 21% for trading. The first product out of the gate is a halogen-free flame retardant additive, now in trials with five customers. Commercialization is three to six months away, with ₹100-120 crore in annual revenue potential at full tilt. The existing order book sits at ₹55 crore, 76% government. That gives the company a base to fund the transition, but the margin uplift depends entirely on whether those five trials convert. Not yet. Three years is a long runway for a nano-cap to rewire its business model. The capex and the product pipeline are the first real proof points.
Questions answered
- Why is SK Minerals pivoting toward manufacturing?
- Manufacturing gross margins are 30%, nine points above the 21% the company earns on its trading-heavy model. The shift is a direct play to improve profitability as revenue scales.
- What is the halogen-free flame retardant product?
- It is a new additive platform produced at a newly commissioned plant. The product is in trials with five customers, and management estimates ₹100-120 crore in annual revenue at full capacity.
- How large is the current order book?
- ₹55 crore, with 76% coming from government contracts. That concentration makes the trading base predictable but low-margin.
- What does the ₹20 crore capex accomplish?
- It will triple manufacturing capacity from 6,600 MT to 18,000 MT by FY28. For a nano-cap, that is the difference between a side business and a core operation.
Story so far
All notes on SKM →- 29 May 2026 · 6:39 PM IST SK Minerals to spend ₹20 cr to triple capacity, chase higher-margin manufacturing
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