The Andhra Petrochemicals Limited

Basic Materials — Chemicals · BSE

₹40.31−₹0.15 (−0.37%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

The Andhra Petrochemicals Limited manufactures oxo-alcohols in India. The company offers 2-ethyl hexanol, normal butanol, and iso butanol, as well as normal butyraldehyde products. It serves pesticides, dyes, food, textile, fertilizer, and healthcare industries.

IndustryChemicals

SectorBasic Materials

Employees275

Annual revenue₹456 Cr

How does it make money?

Turns over ₹456 Cr a year. Of every ₹100 of sales, about ₹-3 reaches shareholders as profit, with ₹0 left at the operating level before interest, tax and depreciation. Each of its 275 employees supports ₹1.66 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin0.1%

Net margin-3.4%

Revenue / employee₹1.66 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.

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?Little sign of one

Returns on capital of -2.2% 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.

ROCE-2.2%

ROE-3.1%

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 -33% while net margin moved -215% 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-33%

Margin effect-215%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 7.1 points over the period

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

30/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

0.65x

EV/EBITDA

750.4x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 7.5% to 0.1% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 4.0% to -3.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 6.2% to -2.2% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -1.5x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹16 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.3 points, from 7.5% to 0.1%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -1.6x to -1.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹9 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 7.5% to 0.1%. 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 146.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 4.0% to -3.1%. 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.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 -2%✓ 0.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 146.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹9 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -1.5x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ -2.2%
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

3 good · 2 neutral · 6 weak

Market Cap

₹343 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.65x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-1.23

Loss-making

Negative earnings per share — the business is losing money

ROE

-3.1%

Weak

Weak capital efficiency

ROCE

-2.2%

Weak

Low return on total capital employed

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

-90.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

13.6%

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

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹40.31

Operating Margin

-63.7%

Weak

Thin margins leave little room for error

Net Margin

-3.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

14.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.09

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

40.7 / 42.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹683 Cr	₹789 Cr	₹502 Cr	₹456 Cr	-12.6%
EBITDA	₹51 Cr	₹107 Cr	₹0 Cr	₹1 Cr	-77.7%
EBITDA Margin	7.5%	13.5%	0.1%	0.1%	—
PAT (Net Profit)	₹20 Cr	₹63 Cr	-₹18 Cr	-₹16 Cr	—
EPS	₹2.4	₹7.46	₹-2.13	₹-1.84	—
ROE	4.0%	11.4%	-3.5%	-3.1%	—
ROCE	6.2%	14.5%	-2.2%	-2.2%	—
Total Debt	₹88 Cr	₹84 Cr	₹86 Cr	₹82 Cr	-2.4%
Free Cash Flow	₹2 Cr	₹99 Cr	-₹60 Cr	-₹9 Cr	—

🔴 Revenue has shrunk at 12.6% a year over 3 years.

🔴 EBITDA has shrunk at 77.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.5% to 0.1% over 3 years (-7.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹20 Cr to -₹16 Cr.

🔴 EPS has turned negative, from ₹2.4 to ₹-1.84.

🔴 ROE has fallen from 4.0% to -3.1% over 3 years (-7.1 pts).

🔴 ROCE has fallen from 6.2% to -2.2% over 3 years (-8.4 pts).

🟢 Total Debt has shrunk at 2.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹9 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹623 Cr

Total Liabilities

₹118 Cr

Total Debt

₹82 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹13 Cr

Capex

-₹22 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

55.0%

Corporate Actions

Ex-Dividend Date

28 Jun 2024

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

2 mixed4 general

Andhra Petrochemicals (BSE:500012) - Stock Analysis

Simply Wall Street, 15 Oct

Andhra Petrochemicals Ltd is Rated Strong Sell

MarketsMojo, 15 Oct

Andhra Petrochemicals Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 31 Aug

Andhra Petrochemicals shareholders approve FY26 financials at 42nd AGM

scanx.trade, 23 Sept

Andhra Petrochemicals Q1 results FY27: Net Loss Rs 3 Cr, Revenue

Univest, 06 AugResults

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

Andhra Petrochemicals Q4 EBITDA Swings to ₹1 Cr Profit; Revenue Slips 44% YoY

Sahi, 27 MayResults

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

Watch Items

Revenue growth is negative (-90.0%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak4.7/20

🟡Financial HealthAdequate10.9/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak2.5/15

🟡ValuationFair7.1/15

🔴RiskHigh4/10

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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -2%0.1%
✗Debt / EBITDA falls below 3x146.0x
✗Free cash flow remains positive-₹9 Cr
✗Interest cover stays above 3x-1.5x
✗ROCE stays above 8%-2.2%