Chembond Material Technologies Limited

Basic Materials — Specialty Chemicals · NSE

₹190.25−₹0.54 (−0.28%)

DalalBaazaar Score

42 / 100

🟡 Moderate

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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chembond Material Technologies Limited manufactures, sells, and trades specialty chemicals in India and internationally. It offers high performance coatings, automotive sealants, metal treatment chemicals, engineering adhesives, and animal health and industrial biotech products.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees283

Annual revenue₹249 Cr

How does it make money?

Turns over ₹249 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 283 employees supports ₹88.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹88.1 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?Little sign of one

Returns on capital of 9.4% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -43% while net margin moved -10% 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-43%

Margin effect-10%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 17.2% a year
✗ Profit has declined at 19.9% a year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

77/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

18.7x

3Y Median

25.7x

40 monthly readings · mean 31.0x · range 8.2x–75.8x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 27% below its 3y median of 25.7x. 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 54% below the peer median of 40.4x.

vs. its own history

Cheap

25.7x median over 40 months · -27%

vs. sector peers

Cheap

40.4x median of 4 peers · -54%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.0x

PEG

0.43

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 36% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.49x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹6 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 49% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 36% 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 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.
Cheaper than its peers
It trades 54% 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?

Leverage amplifies any setback
Debt/Equity of 2.49x. Interest is payable whether or not the business has a good year.
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 6%✓ 8.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 9.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 25.7x✓ 18.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

3 good · 5 neutral · 3 weak

Market Cap

₹256 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.7x

Fair

Fairly valued against the generic band

P/B Ratio

1.53x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.16

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

9.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.49x

High

High leverage

Revenue Growth (YoY)

25.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

43.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

2.9%

Weak

Thin margins leave little room for error

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

2.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.04

Market-like

Moves roughly in line with the market

52W Range Position

65%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

188.8 / 184.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

48.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹439 Cr	₹178 Cr	₹199 Cr	₹249 Cr	-17.2%
EBITDA	₹37 Cr	₹8 Cr	₹16 Cr	₹21 Cr	-17.7%
EBITDA Margin	8.5%	4.4%	7.9%	8.4%	—
PAT (Net Profit)	₹25 Cr	₹11 Cr	₹18 Cr	₹13 Cr	-19.9%
EPS	₹18.66	₹8.31	₹13.06	₹9.59	-19.9%
ROE	7.8%	7.8%	11.2%	7.7%	—
ROCE	10.6%	12.1%	12.8%	9.4%	—
Total Debt	₹7 Cr	₹7 Cr	₹3 Cr	₹4 Cr	-14.0%
Free Cash Flow	-₹14 Cr	₹83 Cr	₹15 Cr	-₹6 Cr	—

🔴 Revenue has shrunk at 17.2% a year over 3 years.

🔴 EBITDA has shrunk at 17.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 19.9% a year over 3 years.

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

🟡 ROE has held roughly flat at 7.7% over 3 years.

🔴 ROCE has fallen from 10.6% to 9.4% over 3 years (-1.2 pts).

🟢 Total Debt has shrunk at 14.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹219 Cr

Total Liabilities

₹52 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹15 Cr

Capex

-₹21 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

73.3%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

02 Jul 2026

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

2 mixed4 general

Chembond Material Technologies (NSE:CHEMBOND): What Drove the Recent Share Price Movement?

Kalkine India, 11 Sept

Chembond Material Technologies Share Price Target 2026 Analyst Forecast Bull and Bear Case

Univest, 17 MayAnalyst view

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

Chembond Material Technologies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Chembond Material Technologies Limited's (NSE:CHEMBOND) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?

Simply Wall Street, 21 Jan

Chembond Material Technologies Clarifies Price Movement to Stock Exchanges

scanx.trade, 08 Apr

Is Chembond Material Technologies a Good Buy After Its Q1 FY27 Results?

Univest, 09 SeptResults

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

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑