Chambal Fertilisers and Chemicals Limited

Basic Materials — Agricultural Inputs · NSE

₹388.85−₹1.45 (−0.37%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, small-cap size, which brings sharper price swings, falling profits.

In simple words: Strong business and financial position, 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 Chambal Fertilisers and Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Chambal Fertilisers and Chemicals Limited, together with its subsidiaries, produces and sells fertilizers primarily in India.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,201

Annual revenue₹20,793 Cr

How does it make money?

Turns over ₹20,793 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 1,201 employees supports ₹17.31 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.7%

Net margin9.4%

Revenue / employee₹17.31 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 18.8% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE21.8%

ROE18.8%

Peer median ROE22.3%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 5.8% and earnings to fall about 3.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+5.8%

Est. earnings growth-3.0%

Analysts3

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -25% while net margin moved +152% 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-25%

Margin effect+152%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.2% a year
✓ Profit CAGR of 23.6% is above 15%
✗ Profit fell 4.6% in the latest year

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

87/ 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

8.1x

3Y Median

13.8x

40 monthly readings · mean 14.0x · range 8.0x–22.5x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 41% below its 3y median of 13.8x. 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 72% below the peer median of 28.7x.

vs. its own history

Cheap

13.8x median over 40 months · -41%

vs. sector peers

Cheap

28.7x median of 4 peers · -72%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

8.1x

P/B

1.49x

EV/EBITDA

5.7x

PEG

0.34

Dividend Yield

3.09%

What's Good / What's Bad

🟢 What's Going Well8

Margins are improving
EBITDA margin is up from 7.0% to 13.7% over 3 years.
Debt is being paid down
Total debt is down 68% over 3 years.
Return on equity is rising
ROE has improved from 14.6% to 18.8%.
Return on capital is rising
ROCE has improved from 17.7% to 21.8%.
High return on capital employed
ROCE of 21.8% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 8.1x the stock trades 41% below its own median of 13.8x.
Very low debt
Debt/Equity of 0.10x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 18% against revenue growth of -25% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 66% against revenue growth of -25% — stock may not be moving.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 66% against revenue up -25% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹754 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 18% against revenue up -25% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.8% 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 7.0% to 13.7%. 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 68% 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 41% 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 72% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 18% against revenue up -25%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Small 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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 12%✓ 13.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹754 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 19%✓ 21.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 13.8x✓ 8.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 1 neutral · 3 weak

Market Cap

₹15,579 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.1x

Cheap

Cheap against the generic band

P/B Ratio

1.49x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹48.13

Profitable

Profitable on a per-share basis

ROE

18.8%

Strong

Strong capital efficiency

ROCE

21.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.10x

Low

Conservative leverage

Revenue Growth (YoY)

-11.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-4.6%

Falling

Profits are shrinking

Dividend Yield

3.09%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹754 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹388.85

P/E (Forward)

8.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

15.2%

Good

Healthy core-business profitability

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

2.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

400.9 / 417.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹27,771 Cr	₹17,948 Cr	₹16,646 Cr	₹20,793 Cr	-9.2%
EBITDA	₹1,945 Cr	₹2,150 Cr	₹2,663 Cr	₹2,859 Cr	+13.7%
EBITDA Margin	7.0%	12.0%	16.0%	13.7%	—
PAT (Net Profit)	₹1,034 Cr	₹1,276 Cr	₹1,650 Cr	₹1,953 Cr	+23.6%
EPS	₹24.85	₹30.84	₹41.17	₹48.76	+25.2%
ROE	14.6%	17.5%	18.9%	18.8%	—
ROCE	17.7%	21.6%	24.3%	21.8%	—
Total Debt	₹3,358 Cr	₹1,874 Cr	₹99 Cr	₹1,068 Cr	-31.8%
Free Cash Flow	₹3,042 Cr	₹2,714 Cr	₹821 Cr	-₹754 Cr	—

🔴 Revenue has shrunk at 9.2% a year over 3 years.

🟢 EBITDA has grown at 13.7% a year over 3 years.

🟢 EBITDA Margin has risen from 7.0% to 13.7% over 3 years (+6.7 pts).

🟢 PAT (Net Profit) has grown at 23.6% a year over 3 years.

🟢 EPS has grown at 25.2% a year over 3 years.

🟢 ROE has risen from 14.6% to 18.8% over 3 years (+4.1 pts).

🟢 ROCE has risen from 17.7% to 21.8% over 3 years (+4.0 pts).

🟢 Total Debt has shrunk at 31.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3,042 Cr to -₹754 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,402 Cr

Total Liabilities

₹4,013 Cr

Total Debt

₹1,068 Cr

Cash & Equivalents

₹308 Cr

Operating Cash Flow

₹138 Cr

Capex

-₹892 Cr

Shareholding (proxy)

Institutional Holding

12.7%

Insider Holding

63.3%

Corporate Actions

Next Earnings

03 Nov 2026

Dividend Rate

₹12

Ex-Dividend Date

11 Aug 2026

Analyst Consensus

Recommendations

2 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹549.67

+41.4% vs CMP

Target Range

₹500 – ₹610

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 mixed5 general

CHAMBLFERT Outlook for the Week

Equitypandit, 09 Oct

Chambal Fertilisers and Chemicals (BSE:500085) Stock Forecast & Analyst Predictions

Simply Wall Street, 05 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Chambal Fertilisers and Chemicals Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Chambal Fertilisers Promoter Group Acquires 39,950 Shares From Open Market on August 26

Sahi, 28 Aug

Chambal Fertilisers And Chemicals (NSEI:CHAMBLFERT) Stock Fair Value Edges Lower On Margin Concerns

Yahoo Finance, 04 Aug

Chambal Fertilizers and Chemicals Stock Signals to Watch This Wee

Univest, 23 Sept

Watch Items

Revenue growth is negative (-11.8%) 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 QualityStrong15.4/20

🟢Financial HealthStrong15/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong10.9/15

🟢ValuationAttractive12.8/15

🟡RiskModerate5.8/10

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

This thesis breaks if

✓EBITDA margin holds above 12%13.7%
✗Free cash flow remains positive-₹754 Cr
✓Debt / EBITDA stays below 2x0.4x
✓ROCE stays above 19%21.8%
✓Valuation vs its own median of 13.8x8.1x today