Chd Chemicals Limited

Basic Materials — Specialty Chemicals · BSE

₹7.27−₹0.13 (−1.76%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The company is currently losing money, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chd Chemicals Limited engages in trading and distribution of chemicals and dyes for textile, leather, and paper industries in India. It also deals in construction chemicals. The company was formerly known as CHD Chemicals Private Limited.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees4

Annual revenue₹5 Cr

How does it make money?

Turns over ₹5 Cr a year. Of every ₹100 of sales, about ₹-6 reaches shareholders as profit, with ₹0 left at the operating level before interest, tax and depreciation. Each of its 4 employees supports ₹1.31 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.31 Cr

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?Little sign of one

Returns on capital of -0.4% 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 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 -72% while net margin moved -1838% 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-72%

Margin effect-1838%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

33/ 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

EV/EBITDA

3197.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 37% over 3 years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 2.1% to -0.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -0.4x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 0.2x to -0.4x.
🟡Margins are compressingFinancial
EBITDA margin is down 3.2 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 37% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹0 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 3.3% 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 1409.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.
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 -2%✓ 0.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 1409.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ -0.4x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ -0.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

4 good · 2 neutral · 5 weak

Market Cap

₹7 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

0.47x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.23

Loss-making

Negative earnings per share — the business is losing money

ROE

-2.4%

Weak

Weak capital efficiency

ROCE

-0.4%

Weak

Low return on total capital employed

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

28.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-59.7%

Falling

Profits are shrinking

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

-6.5%

Weak

Thin margins leave little room for error

Net Margin

-4.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

13.06

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.05

Defensive

Steadier than the market

52W Range Position

95%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

6.5 / 5.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

63.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹19 Cr	₹16 Cr	₹7 Cr	₹5 Cr	-34.9%
EBITDA	₹1 Cr	₹1 Cr	₹0 Cr	₹0 Cr	-81.3%
EBITDA Margin	3.3%	5.2%	3.4%	0.1%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	-₹0 Cr	-₹0 Cr	—
EPS	₹0.06	₹0.26	₹-0.19	₹-0.31	—
ROE	0.5%	1.9%	-1.5%	-2.4%	—
ROCE	2.1%	3.5%	0.3%	-0.4%	—
Total Debt	₹9 Cr	₹7 Cr	₹7 Cr	₹6 Cr	-14.1%
Free Cash Flow	₹11 Cr	₹3 Cr	₹0 Cr	₹0 Cr	-64.6%

🔴 Revenue has shrunk at 34.9% a year over 3 years.

🔴 EBITDA has shrunk at 81.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 3.3% to 0.1% over 3 years (-3.2 pts).

🔴 PAT (Net Profit) has turned negative, from ₹0 Cr to -₹0 Cr.

🔴 EPS has turned negative, from ₹0.06 to ₹-0.31.

🔴 ROE has fallen from 0.5% to -2.4% over 3 years (-3.0 pts).

🔴 ROCE has fallen from 2.1% to -0.4% over 3 years (-2.5 pts).

🟢 Total Debt has shrunk at 14.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 64.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹19 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

24.9%

Corporate Actions

Ex-Dividend Date

09 Oct 2020

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 mixed5 general

Broad-Based Technical Strength Lifts CHD Chemicals Ltd to 52-Week High of Rs 7.3

MarketsMojo, 14 Oct

CHD Chemicals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Oct

CHD Chemicals Ltd. (CHDCHEM) Share Price Surges 17.53% Today

Univest, 27 JulPrice 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.

Compare with

Equitymaster, 11 Oct

Broad-Based Technical Strength Lifts CHD Chemicals Ltd to 52-Week High of Rs 7.45

MarketsMojo, 15 Oct

CHD Chemicals board approves increase in authorised share capital

Business Standard, 08 Sept

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

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.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑