EBITDA is not value: Why Indian specialty chemicals must look beyond the metric

Vivek Save, Advisor at Deccan Fine Chemicals, argues that EBITDA has become a dangerously misleading organising principle in India’s specialty chemicals sector. Originally designed to measure debt serviceability, it hides three critical realities: working capital intensity, maintenance capex, and debt. Asset turns have quietly collapsed even as margins expanded, and capacity creation has been mistaken for capability creation. True value lies in multi‑year cash conversion, through‑cycle ROCE, and asset productivity — not in “bullshit earnings.” The sector’s re‑rating on EBITDA expansion is giving way to a harsher test: whether businesses are compounding capability or inflating a metric.