Agarwal Industrial Corporation Limited

Basic Materials — Specialty Chemicals · NSE

₹370.00+₹3.40 (+0.93%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. The direction of profits 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 Agarwal Industrial Corporation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Agarwal Industrial Corporation Limited manufactures and trades in petrochemicals in India and internationally. It operates through five segments: Ancillary Infra - Bitumen & Allied Products, Petroleum Vessels Operating and Chartering, Petroleum Products, Logistics, and Windmill.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees102

Annual revenue₹1,652 Cr

How does it make money?

Turns over ₹1,652 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 102 employees supports ₹16.20 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹16.20 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, 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 10.0% 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 ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -18% while net margin moved -42% 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-18%

Margin effect-42%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.4% a year
✗ Profit has declined at 22.1% a year
✗ Latest-year revenue growth of -27.0% is below the longer-term trend — momentum is fading
✗ Profit fell 20.6% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

80/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

13.5x

3Y Median

13.5x

40 monthly readings · mean 12.7x · range 4.7x–18.5x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 13.5x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 66% below the peer median of 40.4x.

vs. its own history

Fair

13.5x median over 40 months · +0%

vs. sector peers

Cheap

40.4x median of 4 peers · -66%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 1323% 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 22.9% to 6.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.7% to 10.0% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 116% over 3 years, from ₹158 Cr to ₹341 Cr.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.7x to 3.1x.
🟡Profit is decliningFinancial
Net profit is down 53% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 66% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹113 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Returns on shareholder capital are falling
ROE has dropped from 22.9% to 6.3%. 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.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 6%✓ 8.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹113 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 10.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 3 neutral · 3 weak

Market Cap

₹553 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.5x

Cheap

Cheap against the generic band

P/B Ratio

0.80x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹27.34

Profitable

Profitable on a per-share basis

ROE

6.3%

Weak

Weak capital efficiency

ROCE

10.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.50x

Low

Conservative leverage

Revenue Growth (YoY)

-27.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-20.6%

Falling

Profits are shrinking

Dividend Yield

0.89%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹113 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

33.5x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

3.7%

Weak

Thin margins leave little room for error

Net Margin

2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.20

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

388.5 / 436.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,015 Cr	₹2,125 Cr	₹2,399 Cr	₹1,652 Cr	-6.4%
EBITDA	₹144 Cr	₹176 Cr	₹210 Cr	₹132 Cr	-2.9%
EBITDA Margin	7.1%	8.3%	8.7%	8.0%	—
PAT (Net Profit)	₹92 Cr	₹109 Cr	₹116 Cr	₹44 Cr	-22.1%
EPS	₹63.78	₹73.02	₹77.34	₹29.13	-23.0%
ROE	22.9%	21.4%	18.4%	6.3%	—
ROCE	24.7%	21.3%	20.0%	10.0%	—
Total Debt	₹158 Cr	₹361 Cr	₹435 Cr	₹341 Cr	+29.3%
Free Cash Flow	₹8 Cr	-₹158 Cr	-₹65 Cr	₹113 Cr	+142.3%

🔴 Revenue has shrunk at 6.4% a year over 3 years.

🔴 EBITDA has shrunk at 2.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.0% over 3 years.

🔴 PAT (Net Profit) has shrunk at 22.1% a year over 3 years.

🔴 EPS has shrunk at 23.0% a year over 3 years.

🔴 ROE has fallen from 22.9% to 6.3% over 3 years (-16.5 pts).

🔴 ROCE has fallen from 24.7% to 10.0% over 3 years (-14.7 pts).

🔴 Total Debt has grown at 29.3% a year over 3 years.

🟢 Free Cash Flow has grown at 142.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,202 Cr

Total Liabilities

₹513 Cr

Cash & Equivalents

₹43 Cr

Operating Cash Flow

₹235 Cr

Capex

-₹121 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

63.8%

Corporate Actions

Dividend Rate

₹3.3

Ex-Dividend Date

17 Sept 2026

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 mixed4 general

Agarwal Industrial Corporation 52 Week Low Streak Analysis

Univest, 17 Oct

Top Volume Gainers, July 28, 2026, 3:30 PM IST

HDFC Sky, 28 Jul

Agarwal Industrial Corporation Share Price near 52-week low

Univest, 14 Oct

Agarwal Industrial AGM to approve ₹3.30 dividend, business expansion

scanx.trade, 29 AugCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Ashish Kacholia's picks: 6 stocks rally up to 120%, 4 drop up to 50% in FY26; 2 new Q3 bets revealed

The Economic Times, 14 MarResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Tech Query: APL Apollo Tubes, Castrol India, Great Eastern Shipping Company (G E Shipping), Agarwal Industrial Corporation - What is the outlook? Where are these stocks headed?

BusinessLine, 10 Oct

Watch Items

Revenue growth is negative (-27.0%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingRisk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Debt / EBITDA stays below 2x · see Key things to watch ↑