Advance Petrochemicals Ltd.

Basic Materials — Chemicals · BSE

₹1,001.55−₹20.40 (−2.00%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Advance Petrochemicals Ltd. — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Advance Petrochemicals Ltd. manufactures and sells petroleum products in India.

IndustryChemicals

SectorBasic Materials

Employees42

Annual revenue₹47 Cr

How does it make money?

Turns over ₹47 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 42 employees supports ₹1.13 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.13 Cr

Who are its competitors?

The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.7% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +28% while net margin moved -98% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+28%

Margin effect-98%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 0.7% is weak
✗ ROE has fallen by 26.1 points over the period

Quality vs. Valuation

Company Quality

36/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

42/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

43.8x

3Y Median

59.4x

40 monthly readings · mean 288.7x · range 10.4x–3035.0x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 26% below its 3y median of 59.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 30% above the peer median of 33.8x.

vs. its own history

Cheap

59.4x median over 40 months · -26%

vs. sector peers

Expensive

33.8x median of 3 peers · +30%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

46.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 74% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.8% to 0.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 34.7% to 13.7% — often a sign of competition or overexpansion.

Red Flags

8 items require attention · 4 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 97% over 3 years, from ₹7 Cr to ₹14 Cr.
🔴High leverageFinancial
Debt/Equity of 3.48x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 216% against revenue up 28% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 97% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.0 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 79% against revenue up 28% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.98 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 26% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 7.6% to 4.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 216% against revenue up 28%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 30% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 26.8% to 0.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 3%✓ 4.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 6% a year✓ 8.5% CAGR
Latest reported year was 98.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹90 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

43.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

22.19x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹22.85

Profitable

Profitable on a per-share basis

ROE

0.7%

Weak

Weak capital efficiency

ROCE

13.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

3.48x

High

High leverage

Revenue Growth (YoY)

98.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

17330.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

16.3%

Good

Healthy core-business profitability

Net Margin

3.6%

Average

Average bottom-line conversion

Current Ratio

0.98

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.81

Market-like

Moves roughly in line with the market

52W Range Position

89%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

865.6 / 524.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

78.7

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹37 Cr	₹35 Cr	₹50 Cr	₹47 Cr	+8.5%
EBITDA	₹3 Cr	₹2 Cr	₹2 Cr	₹2 Cr	-7.9%
EBITDA Margin	7.6%	5.1%	3.1%	4.7%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-68.6%
EPS	₹10.49	₹2.4	₹3.36	₹0.33	-68.4%
ROE	26.8%	5.8%	7.5%	0.7%	—
ROCE	34.7%	15.4%	15.0%	13.7%	—
Total Debt	₹7 Cr	₹9 Cr	₹11 Cr	₹14 Cr	+25.4%
Free Cash Flow	₹1 Cr	₹0 Cr	-₹0 Cr	₹1 Cr	+20.3%

🟢 Revenue has grown at 8.5% a year over 3 years.

🔴 EBITDA has shrunk at 7.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.6% to 4.7% over 3 years (-3.0 pts).

🔴 PAT (Net Profit) has shrunk at 68.6% a year over 3 years.

🔴 EPS has shrunk at 68.4% a year over 3 years.

🔴 ROE has fallen from 26.8% to 0.7% over 3 years (-26.1 pts).

🔴 ROCE has fallen from 34.7% to 13.7% over 3 years (-21.0 pts).

🔴 Total Debt has grown at 25.4% a year over 3 years.

🟢 Free Cash Flow has grown at 20.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹32 Cr

Total Liabilities

₹28 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

41.6%

Corporate Actions

Ex-Dividend Date

22 Sept 1995

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive5 general

Advance Petrochemicals Ltd. Upper Circuit Streak: Day 2 Price and Data

Univest, 23 Sept

Advance Petrochemicals Q1FY27 net profit surges 17,203% to ₹203.95 crore

scanx.trade, 11 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Chennai Petro's Stock Plunges Nearly 6% As Crude Oil Retreats Below $104/Barrel

NDTV Profit, 15 Oct

Price Band Hitters, October 13, 2026 at 3:30 PM IST: Advance Agrolife Leads The List

HDFC Sky, 13 Oct

Only Sellers BSE: Check Out the Lower Circuit Stocks in BSE Today

Livemint, 16 Oct

List of Petrochemical Stocks in India (2026)

INDmoney, 07 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑