Chemkart India Limited

Basic Materials — Chemicals · BSE

₹248.75+₹6.25 (+2.58%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, 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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chemkart India Limited engages in the trading of nutraceutical, health, and sports supplement ingredients in India. The company offers amino acids, health supplements, herbal extracts, nucleotides, proteins, and vitamin products.

IndustryChemicals

SectorBasic Materials

Employees30

Annual revenue₹215 Cr

How does it make money?

Turns over ₹215 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 30 employees supports ₹7.16 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹7.16 Cr

Who are its competitors?

The closest listed comparisons in its industry are 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 21.5% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +64% while net margin moved +57% 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+64%

Margin effect+57%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk

Quality vs. Valuation

Company Quality

73/ 100

Good

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

Valuation

66/ 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

14.4x

1.4Y Median

9.5x

17 monthly readings · mean 9.2x · range 4.3x–20.3x

Sector Median

33.8x

median of 3 sector peers

⚠️Current valuation is approximately 51% above its 1.4y median of 9.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 57% below the peer median of 33.8x.

vs. its own history

Expensive

9.5x median over 17 months · +51%

vs. sector peers

Cheap

33.8x median of 3 peers · -57%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.5x

PEG

0.39

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 8.5% to 13.1% over 3 years.
Debt is being paid down
Total debt is down 56% over 3 years.
High return on capital employed
ROCE of 21.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 52.8% to 15.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 73.3% to 21.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 high

🔴High leverageFinancial
Debt/Equity of 3.82x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 123% against revenue up 64% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 350% against revenue up 64% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.3% 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 8.5% to 13.1%. 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 56% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 57% 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 3.82x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 123% against revenue up 64%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 51% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 52.8% to 15.2%. 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.

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

1Revenue growth stays above 13% a year✓ 17.8% CAGR
Latest reported year was 23.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 21.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹301 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.4x

Cheap

Cheap against the generic band

P/B Ratio

2.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹17.26

Profitable

Profitable on a per-share basis

ROE

21.5%

Strong

Strong capital efficiency

ROCE

21.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.82x

High

High leverage

Revenue Growth (YoY)

23.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

55.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

14.2%

Good

Assets are working hard

Operating Margin

12.3%

Average

Average margins

Net Margin

9.2%

Average

Average bottom-line conversion

Current Ratio

4.73

Comfortable

Healthy short-term liquidity

52W Range Position

97%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

236.3 / 205.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

60.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹131 Cr	₹132 Cr	₹203 Cr	₹215 Cr	+17.8%
EBITDA	₹11 Cr	₹21 Cr	₹35 Cr	₹28 Cr	+36.3%
EBITDA Margin	8.5%	16.2%	17.1%	13.1%	—
PAT (Net Profit)	₹8 Cr	₹15 Cr	₹25 Cr	₹20 Cr	+36.9%
EPS	₹6.33	₹12	₹20.28	—	—
ROE	52.8%	50.0%	46.0%	15.2%	—
ROCE	73.3%	71.7%	63.5%	21.3%	—
Total Debt	₹11 Cr	₹13 Cr	₹17 Cr	₹5 Cr	-24.1%
Free Cash Flow	-₹5 Cr	-₹0 Cr	-₹0 Cr	-₹8 Cr	—

🟢 Revenue has grown at 17.8% a year over 3 years.

🟢 EBITDA has grown at 36.3% a year over 3 years.

🟢 EBITDA Margin has risen from 8.5% to 13.1% over 3 years (+4.7 pts).

🟢 PAT (Net Profit) has grown at 36.9% a year over 3 years.

🔴 ROE has fallen from 52.8% to 15.2% over 3 years (-37.7 pts).

🔴 ROCE has fallen from 73.3% to 21.3% over 3 years (-52.0 pts).

🟢 Total Debt has shrunk at 24.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹157 Cr

Total Liabilities

₹27 Cr

Cash & Equivalents

₹37 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.6%

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 mixed5 general

Chemkart India 52 Week High Streak: Second Session View

Univest, 06 Oct

Compare with Lesha Industries

Equitymaster, 16 Oct

Chemkart India invests ₹1 crore in subsidiary via rights issue

scanx.trade, 08 Aug

Chemkart India Limited Share Price

Upstox, 05 May

Compare UNIMODE OVER with

Equitymaster, 16 Oct

ChemKart India shares jump on making strategic investment ₹2 Cr in Easy Raw Materials

Alice Blue, 13 MarPrice 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.

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 · Growth

MiddlingBusiness Quality · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 4 high-severity red flags sit above this conclusion and should be read first.

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