Chatha Foods Limited

Consumer Defensive — Packaged Foods · BSE

₹83.25−₹4.35 (−4.97%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by 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, 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, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chatha Foods Limited engages in the manufacturing and supply of processed meat and ready to eat products in India. It manufactures and retail frozen and ready to eat meat, vegetarian product, and vegan food. The company offers non-vegetarian, vegetarian, and plant-based products.

IndustryPackaged Foods

SectorConsumer Defensive

Employees138

Annual revenue₹166 Cr

How does it make money?

Turns over ₹166 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 138 employees supports ₹1.20 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.20 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. 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 7.7% 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 ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +41% while net margin moved +84% 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+41%

Margin effect+84%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 7.7% is below 10% — capital is not working hard
✗ ROCE has fallen by 7.6 points — returns are eroding
✗ EBITDA margin of 7.6% is thin — little cushion if costs rise
✗ Net margin of 3.9% is slim
• Revenue has compounded at 12.2% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

67/ 100

Fair

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

31.3x

3Y Median

32.1x

33 monthly readings · mean 41.4x · range 22.7x–125.5x

Sector Median

51.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 32.1x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 39% below the peer median of 51.7x.

vs. its own history

Fair

32.1x median over 33 months · -3%

vs. sector peers

Cheap

51.7x median of 4 peers · -39%

vs. generic bands

Fair

15x–35x

EV/EBITDA

18.7x

PEG

0.83

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 11.3% to 7.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.3% to 7.7% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 285% over 3 years, from ₹11 Cr to ₹41 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 125% against revenue up 41% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹56 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 39% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The debt load needs earnings to hold up
Debt is 3.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 125% against revenue up 41%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 11.3% to 7.2%. 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.
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

1Revenue growth stays above 9% a year✓ 12.2% CAGR
Latest reported year was -1.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹56 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 7.7%
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

2 good · 5 neutral · 4 weak

Market Cap

₹201 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

31.3x

Fair

Fairly valued against the generic band

P/B Ratio

2.25x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.66

Profitable

Profitable on a per-share basis

ROE

7.1%

Weak

Weak capital efficiency

ROCE

7.7%

Weak

Low return on total capital employed

Debt/Equity

0.42x

Low

Conservative leverage

Revenue Growth (YoY)

-1.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

7.6%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹62 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

4.2%

Average

Average asset productivity

Operating Margin

5.8%

Average

Average margins

Net Margin

3.9%

Average

Average bottom-line conversion

Current Ratio

1.26

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.59

Defensive

Steadier than the market

52W Range Position

34%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

99.5 / 106.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹117 Cr	₹134 Cr	₹157 Cr	₹166 Cr	+12.2%
EBITDA	₹8 Cr	₹12 Cr	₹12 Cr	₹13 Cr	+18.9%
EBITDA Margin	6.4%	9.1%	7.9%	7.6%	—
PAT (Net Profit)	₹2 Cr	₹6 Cr	₹6 Cr	₹6 Cr	+37.6%
EPS	₹1.09	₹3.71	₹2.67	—	—
ROE	11.3%	10.7%	7.3%	7.2%	—
ROCE	15.3%	14.9%	10.5%	7.7%	—
Total Debt	₹11 Cr	₹8 Cr	₹12 Cr	₹41 Cr	+56.7%
Free Cash Flow	₹1 Cr	₹3 Cr	-₹16 Cr	-₹56 Cr	—

🟢 Revenue has grown at 12.2% a year over 3 years.

🟢 EBITDA has grown at 18.9% a year over 3 years.

🟢 EBITDA Margin has risen from 6.4% to 7.6% over 3 years (+1.2 pts).

🟢 PAT (Net Profit) has grown at 37.6% a year over 3 years.

🔴 ROE has fallen from 11.3% to 7.2% over 3 years (-4.1 pts).

🔴 ROCE has fallen from 15.3% to 7.7% over 3 years (-7.6 pts).

🔴 Total Debt has grown at 56.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹56 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹164 Cr

Total Liabilities

₹66 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹10 Cr

Capex

-₹66 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.7%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

2 mixed4 general

Chatha Foods Ltd Peer Comparison – Compare with Others

Value Research, 27 Aug

Chatha Foods Lower Circuit Streak: Day 2 Price and Data

Univest, 09 Oct

Chatha Foods gets BSE trading approval for 16,000 converted shares

scanx.trade, 12 Oct

Chatha Foods Ltd. Share Price Rises 8.38% Today

Univest, 03 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Chatha Foods submits revised EGM voting results for Sept 29 meeting

scanx.trade, 12 OctResults

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

Chatha Foods Ltd Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 03 Sept

Watch Items

Revenue growth is negative (-1.2%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑