Bhagawati Oxygen Limited

Basic Materials — Specialty Chemicals · BSE

₹42.48−₹0.11 (−0.26%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bhagawati Oxygen Limited manufactures and supplies industrial gases in India. It operates through Gases and Power segments.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees16

Annual revenue₹0 Cr

How does it make money?

Turns over ₹0 Cr a year. Of every ₹100 of sales, about ₹671 reaches shareholders as profit, with ₹579 left at the operating level before interest, tax and depreciation. Each of its 16 employees supports ₹3.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹3.0 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 43.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 -29% while net margin moved -289% 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-29%

Margin effect-289%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 10.7% a year

Quality vs. Valuation

Company Quality

65/ 100

Good

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

Valuation

88/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

3.3x

2Y Median

23.8x

28 monthly readings · mean 22.3x · range 2.8x–39.9x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 86% below its 2y median of 23.8x. 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 92% below the peer median of 40.4x.

vs. its own history

Cheap

23.8x median over 28 months · -86%

vs. sector peers

Cheap

40.4x median of 4 peers · -92%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

3.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from -157.8% to 579.5% over 3 years.
Debt is being paid down
Total debt is down 83% over 3 years.
Return on equity is rising
ROE has improved from -58.0% to 45.1%.
Return on capital is rising
ROCE has improved from -24.2% to 43.8%.
High return on capital employed
ROCE of 43.8% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Short-term liquidity is tightFinancial
Current ratio of 0.81 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 43.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from -157.8% to 579.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 83% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 86% 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.
Cheaper than its peers
It trades 92% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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 577%✓ 579.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 41%✓ 43.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 23.8x✓ 3.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

9 / 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

8 good · 2 neutral · 1 weak

Market Cap

₹10 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.3x

Cheap

Cheap against the generic band

P/B Ratio

1.36x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹12.85

Profitable

Profitable on a per-share basis

ROE

45.1%

Strong

Strong capital efficiency

ROCE

43.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

-9.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

824.8%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-330.5%

Weak

Thin margins leave little room for error

Net Margin

628.6%

Good

Strong bottom-line conversion

Current Ratio

0.81

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

39.9 / 38.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

58.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹1 Cr	₹1 Cr	₹0 Cr	-10.7%
EBITDA	-₹1 Cr	₹1 Cr	-₹1 Cr	₹3 Cr	—
EBITDA Margin	-157.8%	207.0%	-81.2%	579.5%	—
PAT (Net Profit)	-₹2 Cr	₹0 Cr	-₹0 Cr	₹3 Cr	—
EPS	₹-10.47	₹1.78	₹-1.95	₹14.13	—
ROE	-58.0%	9.1%	-11.4%	45.1%	—
ROCE	-24.2%	10.9%	-4.8%	43.8%	—
Total Debt	₹6 Cr	₹1 Cr	₹2 Cr	₹1 Cr	-45.1%
Free Cash Flow	₹0 Cr	-₹4 Cr	-₹1 Cr	₹0 Cr	-14.4%

🔴 Revenue has shrunk at 10.7% a year over 3 years.

🟢 EBITDA has turned positive, from -₹1 Cr to ₹3 Cr.

🟢 EBITDA Margin has risen from -157.8% to 579.5% over 3 years (+737.3 pts).

🟢 PAT (Net Profit) has turned positive, from -₹2 Cr to ₹3 Cr.

🟢 EPS has turned positive, from ₹-10.47 to ₹14.13.

🟢 ROE has risen from -58.0% to 45.1% over 3 years (+103.0 pts).

🟢 ROCE has risen from -24.2% to 43.8% over 3 years (+68.0 pts).

🟢 Total Debt has shrunk at 45.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 14.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.2%

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

1 positive5 general

Bhagawati Oxygen Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 03 Sept

Bhagawati Oxygen profit surges to ₹327 crore in FY26 on arbitration settlement

scanx.trade, 28 SeptResults

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

Bhagawati Oxygen Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 03 Sept

Bhagawati Oxygen Limited (509449) Company Information

Simply Wall Street, 15 Nov

BHAGWATI OXYGEN LTD. Share Price

Upstox, 11 Apr

'Oxygen' rally in Indian stock market. Name just enough to lift shares

Livemint, 20 Apr

Watch Items

Revenue growth is negative (-9.6%) 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

StrongBusiness Quality · Financial Health · Profitability · Valuation

WeakGrowth · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 5 tripwires holding · see Key things to watch ↑