Chemfab Alkalis Limited

Basic Materials — Specialty Chemicals · NSE

₹333.25+₹4.90 (+1.49%)

DalalBaazaar Score

32 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, 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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chemfab Alkalis Limited, together with its subsidiary, Chemfab Karaiikal Limited, manufactures and sells basic inorganic chemicals in India and internationally. The company operates in Chemicals and Related Products/Services; and PVC-O Pipes segments.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees219

Annual revenue₹311 Cr

How does it make money?

Turns over ₹311 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 219 employees supports ₹1.42 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.42 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 1.6% 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 -6% while net margin moved -106% 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-6%

Margin effect-106%

DalalBaazaar Score

32/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 18.8 points over the period

Quality vs. Valuation

Company Quality

28/ 100

Weak

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

Valuation

36/ 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

18.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 17.9% to -0.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.5% to 1.6% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 5 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 5236% over 3 years, from ₹2 Cr to ₹126 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.0x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 23.5 points, from 34.2% to 10.6%.
🟡Inventory building faster than salesFinancial
Inventory up 53% against revenue up -6% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 34.2% to 10.6%. 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 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 17.9% to -0.9%. 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.
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 9%✓ 10.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹53 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.0x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 1.6%
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

3 good · 2 neutral · 6 weak

Market Cap

₹479 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

1.27x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.16

Loss-making

Negative earnings per share — the business is losing money

ROE

-0.9%

Weak

Weak capital efficiency

ROCE

1.6%

Weak

Low return on total capital employed

Debt/Equity

0.33x

Low

Conservative leverage

Revenue Growth (YoY)

-20.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

125.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.38%

Modest

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

Free Cash Flow

-₹53 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.2%

Weak

Thin margins leave little room for error

Net Margin

-0.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.12

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.10

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

340.4 / 356.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹331 Cr	₹327 Cr	₹334 Cr	₹311 Cr	-2.1%
EBITDA	₹113 Cr	₹62 Cr	₹51 Cr	₹33 Cr	-33.6%
EBITDA Margin	34.2%	19.1%	15.2%	10.6%	—
PAT (Net Profit)	₹65 Cr	₹26 Cr	-₹7 Cr	-₹3 Cr	—
EPS	₹45.14	₹18.34	₹-4.86	₹-2.38	—
ROE	17.9%	6.8%	-1.8%	-0.9%	—
ROCE	24.5%	9.8%	1.0%	1.6%	—
Total Debt	₹2 Cr	₹20 Cr	₹84 Cr	₹126 Cr	+276.5%
Free Cash Flow	₹35 Cr	-₹61 Cr	-₹73 Cr	-₹53 Cr	—

🔴 Revenue has shrunk at 2.1% a year over 3 years.

🔴 EBITDA has shrunk at 33.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 34.2% to 10.6% over 3 years (-23.5 pts).

🔴 PAT (Net Profit) has turned negative, from ₹65 Cr to -₹3 Cr.

🔴 EPS has turned negative, from ₹45.14 to ₹-2.38.

🔴 ROE has fallen from 17.9% to -0.9% over 3 years (-18.8 pts).

🔴 ROCE has fallen from 24.5% to 1.6% over 3 years (-22.9 pts).

🔴 Total Debt has grown at 276.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹35 Cr to -₹53 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹577 Cr

Total Liabilities

₹201 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹38 Cr

Capex

-₹91 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.3%

Corporate Actions

Dividend Rate

₹1.25

Ex-Dividend Date

02 Sept 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 positive3 mixed1 general

Chemfab Alkalis Share Price Target 2026 Analyst Forecast Bull and Bear Case

Univest, 16 MayAnalyst view

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

Chemfab Alkalis net profit surges 124% in Q1FY27 on tax credit

scanx.trade, 29 JulResults

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

Why Is Chemfab Alkalis Share Price Falling Key Reasons 2026

Univest, 21 MayPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Chemfab Alkalis appoints MSKC as statutory auditor; declares ₹1.25 dividend

scanx.trade, 09 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Chemfab Alkalis Share Price: Good Buy After 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.

Chemfab Alkalis (NSEI:CHEMFAB) - Stock Analysis

Simply Wall Street, 26 Oct

Watch Items

Revenue growth is negative (-20.1%) 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

MiddlingFinancial Health · Valuation

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

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