Arvee Laboratories (India) Ltd.

Basic Materials — Specialty Chemicals · NSE

₹225.00−₹0.90 (−0.40%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, 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, 6:09 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 Arvee Laboratories (India) Ltd. — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Arvee Laboratories (India) Ltd. manufactures and sells various specialized chemicals in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees57

Annual revenue₹31 Cr

How does it make money?

Turns over ₹31 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 57 employees supports ₹55.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin11.6%

Net margin8.0%

Revenue / employee₹55.2 lakh

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.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

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 7.2% 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.

ROCE7.2%

ROE7.5%

Peer median ROE22.3%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -49% while net margin moved +20% 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-49%

Margin effect+20%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 19.9% a year
✗ Profit has declined at 15.0% a year

Quality vs. Valuation

Company Quality

35/ 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

61.1x

3Y Median

83.9x

40 monthly readings · mean 99.3x · range 29.7x–193.7x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 27% below its 3y median of 83.9x. 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 51% above the peer median of 40.4x.

vs. its own history

Cheap

83.9x median over 40 months · -27%

vs. sector peers

Expensive

40.4x median of 4 peers · +51%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

61.1x

P/B

7.37x

EV/EBITDA

68.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 61.1x the stock trades 27% below its own median of 83.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 14.0% to 11.6% 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 14.7% to 7.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 21.6% to 7.2% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 101% against revenue growth of -49% — stock may not be moving.

Red Flags

5 items require attention · 2 high · 3 watch

🔴High leverageFinancial
Debt/Equity of 3.30x — earnings must service borrowings before shareholders see anything.
🔴Inventory building faster than salesFinancial
Inventory up 101% against revenue up -49% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 39% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 27% 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 14.0% to 11.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 3.30x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 51% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 14.7% to 7.5%. 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.

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

1EBITDA margin holds above 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 7.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 83.9x✓ 61.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

₹248 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

61.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.37x

Rich

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

EPS (TTM)

₹3.68

Profitable

Profitable on a per-share basis

ROE

7.5%

Weak

Weak capital efficiency

ROCE

7.2%

Weak

Low return on total capital employed

Debt/Equity

3.30x

High

High leverage

Revenue Growth (YoY)

130.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

926.7%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹225

Operating Margin

12.6%

Average

Average margins

Net Margin

9.8%

Average

Average bottom-line conversion

Current Ratio

3.55

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.50

Defensive

Steadier than the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

216.4 / 189.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

56.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹61 Cr	₹30 Cr	₹38 Cr	₹31 Cr	-19.9%
EBITDA	₹9 Cr	₹3 Cr	₹4 Cr	₹4 Cr	-24.7%
EBITDA Margin	14.0%	11.3%	10.5%	11.6%	—
PAT (Net Profit)	₹4 Cr	₹1 Cr	₹2 Cr	₹3 Cr	-15.0%
EPS	₹3.74	₹0.95	₹1.95	₹2.29	-15.1%
ROE	14.7%	3.6%	6.9%	7.5%	—
ROCE	21.6%	6.4%	9.0%	7.2%	—
Total Debt	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+3.6%
Free Cash Flow	₹1 Cr	₹1 Cr	-₹2 Cr	-₹3 Cr	—

🔴 Revenue has shrunk at 19.9% a year over 3 years.

🔴 EBITDA has shrunk at 24.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 14.0% to 11.6% over 3 years (-2.3 pts).

🔴 PAT (Net Profit) has shrunk at 15.0% a year over 3 years.

🔴 EPS has shrunk at 15.1% a year over 3 years.

🔴 ROE has fallen from 14.7% to 7.5% over 3 years (-7.2 pts).

🔴 ROCE has fallen from 21.6% to 7.2% over 3 years (-14.4 pts).

🔴 Total Debt has grown at 3.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹43 Cr

Total Liabilities

₹9 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹3 Cr

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

6 general

If EPS Growth Is Important To You, Arvee Laboratories (India) (NSE:ARVEE) Presents An Opportunity

Simply Wall Street, 12 Aug

Arvee Laboratories India: Best Stock in Its Sector? Key Metrics

Univest, 23 Sept

Arvee Laboratories (India) Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 04 Sept

Arvee Laboratories (India) Ltd (NSE: ARVEE) Gains 8.15% as Stock Draws Market Attention

Kalkine India, 22 Sept

Arvee Laboratories (India) Ltd. Share Price Live Today

CNBC TV18, 26 Dec

Arvee Labs (ARVEE.NS) Surges 18% to ₹193.74: Key Levels to Watch - Wyckoff Upthrust

siam.in, 08 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.6/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak5.8/15

🔴ValuationDemanding6.7/15

🔴RiskHigh3.7/10

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

This thesis breaks if

✓EBITDA margin holds above 10%11.6%
✗Free cash flow remains positive-₹3 Cr
✓Debt / EBITDA stays below 2x0.3x
✗ROCE stays above 8%7.2%
✓Valuation vs its own median of 83.9x61.1x today