Chemtech Industrial Valves Limited

Industrials — Specialty Industrial Machinery · BSE

₹52.30−₹1.43 (−2.66%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chemtech Industrial Valves Limited manufactures and sells industrial valves in India. The company operates through Manufacturing of Industrial Valves and Trading of Various Items for Project Sales segments.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees41

Annual revenue₹30 Cr

How does it make money?

Turns over ₹30 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹34 left at the operating level before interest, tax and depreciation. Each of its 41 employees supports ₹73.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹73.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA 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 7.1% 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 ROE17.1%

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 +48% while net margin moved +22% 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+48%

Margin effect+22%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 4.7% is weak
✗ ROE has fallen by 18.5 points over the period

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

52/ 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

35.3x

3Y Median

26.7x

40 monthly readings · mean 36.8x · range 14.0x–82.9x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 32% above its 3y median of 26.7x. 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 47% below the peer median of 66.2x.

vs. its own history

Expensive

26.7x median over 40 months · +32%

vs. sector peers

Cheap

66.2x median of 4 peers · -47%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

8.8x

PEG

1.64

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 20.6% to 33.8% over 3 years.
Very low debt
Debt/Equity of 0.00x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 23.2% to 4.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.8% to 7.1% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹17 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 78% against revenue up 48% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 102% against revenue up 48% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 61% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 20.6% to 33.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 47% 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?

Sales are being booked faster than collected
Receivables are up 78% against revenue up 48%. 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 32% 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 23.2% to 4.7%. 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 10% a year✓ 13.9% CAGR
Latest reported year was 18.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 32%✓ 33.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹17 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 7.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 26.7x✗ 35.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

4 good · 3 neutral · 4 weak

Market Cap

₹96 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

35.3x

Fair

Fairly valued against the generic band

P/B Ratio

0.88x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.48

Profitable

Profitable on a per-share basis

ROE

4.7%

Weak

Weak capital efficiency

ROCE

7.1%

Weak

Low return on total capital employed

Debt/Equity

0.00x

Low

Conservative leverage

Revenue Growth (YoY)

18.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-78.0%

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

-₹17 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-0.8%

Weak

Thin margins leave little room for error

Net Margin

8.5%

Average

Average bottom-line conversion

Current Ratio

15.08

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

57.1 / 62.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹20 Cr	₹31 Cr	₹40 Cr	₹30 Cr	+13.9%
EBITDA	₹4 Cr	₹6 Cr	₹11 Cr	₹10 Cr	+34.2%
EBITDA Margin	20.6%	19.5%	27.5%	33.8%	—
PAT (Net Profit)	₹3 Cr	₹4 Cr	₹7 Cr	₹5 Cr	+21.6%
EPS	₹2.43	₹3.36	₹4.37	₹2.8	+4.8%
ROE	23.2%	11.9%	7.3%	4.7%	—
ROCE	17.8%	12.9%	9.9%	7.1%	—
Total Debt	₹11 Cr	₹5 Cr	—	—	—
Free Cash Flow	₹1 Cr	₹3 Cr	-₹4 Cr	-₹17 Cr	—

🟢 Revenue has grown at 13.9% a year over 3 years.

🟢 EBITDA has grown at 34.2% a year over 3 years.

🟢 EBITDA Margin has risen from 20.6% to 33.8% over 3 years (+13.1 pts).

🟢 PAT (Net Profit) has grown at 21.6% a year over 3 years.

🟢 EPS has grown at 4.8% a year over 3 years.

🔴 ROE has fallen from 23.2% to 4.7% over 3 years (-18.5 pts).

🔴 ROCE has fallen from 17.8% to 7.1% over 3 years (-10.7 pts).

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹17 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹116 Cr

Total Liabilities

₹8 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

54.2%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 mixed1 negative3 general

Chemtech Industrial Valves (BSE:537326) - Stock Analysis

Simply Wall Street, 13 Oct

Chemtech Industrial Valves Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Chemtech Industrial Valves net profit falls 77% to ₹69 lakh in Q1FY27

scanx.trade, 12 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Chemtech Industrial Valves Share Price Falls 8.9% Today

Univest, 08 OctPrice 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.

Chemtech Industrial Valves Ltd is Rated Strong Sell

MarketsMojo, 02 Sept

Chemtech Industrial Valves to host analyst call on Sept 29

scanx.trade, 24 SeptAnalyst view

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

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation

WeakProfitability · 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.

3 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8%; Valuation vs its own median of 26.7x · see Key things to watch ↑