C.J. Gelatine Products Limited

Basic Materials — Specialty Chemicals · BSE

₹26.75−₹0.64 (−2.34%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

C.J. Gelatine Products Limited engages in the manufacture and sale of gelatine and related products in India. It provides pharmaceutical, edible, technical, and photographic gelatine products, as well as ossein and di-calcium phosphate products.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees60

Annual revenue₹42 Cr

How does it make money?

Turns over ₹42 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 60 employees supports ₹70.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹70.2 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 8.8% 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?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +14% while net margin moved -21% 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+14%

Margin effect-21%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.6% — barely ahead of inflation
✗ Profit has declined at 3.1% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

75/ 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

21.1x

3Y Median

51.1x

40 monthly readings · mean 63.5x · range 30.7x–132.5x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 59% below its 3y median of 51.1x. 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 48% below the peer median of 40.4x.

vs. its own history

Cheap

51.1x median over 40 months · -59%

vs. sector peers

Cheap

40.4x median of 4 peers · -48%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.8x

PEG

—

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 6.06x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 86% against revenue up 14% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 59% 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 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 8.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 86% against revenue up 14%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 4.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 5%✓ 6.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 8.3x
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✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✓ 4.6% CAGR
Latest reported year was 26.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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

₹13 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.46x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.27

Profitable

Profitable on a per-share basis

ROE

5.3%

Weak

Weak capital efficiency

ROCE

8.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

6.06x

High

High leverage

Revenue Growth (YoY)

26.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

161.0%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.6%

Average

Average margins

Net Margin

1.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.77

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.04

Defensive

Steadier than the market

52W Range Position

80%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

26.9 / 24.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹37 Cr	₹41 Cr	₹41 Cr	₹42 Cr	+4.6%
EBITDA	₹3 Cr	₹2 Cr	₹3 Cr	₹3 Cr	+1.6%
EBITDA Margin	7.4%	5.3%	6.3%	6.8%	—
PAT (Net Profit)	₹0 Cr	-₹2 Cr	₹0 Cr	₹0 Cr	-3.1%
EPS	₹0.48	₹-4.05	₹0.17	₹0.43	-3.4%
ROE	3.2%	-41.2%	1.9%	5.3%	—
ROCE	9.5%	-7.4%	8.0%	8.8%	—
Total Debt	₹20 Cr	₹20 Cr	₹21 Cr	₹24 Cr	+6.5%
Free Cash Flow	-₹0 Cr	₹1 Cr	-₹0 Cr	-₹1 Cr	—

🟢 Revenue has grown at 4.6% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (1.6% a year).

🟡 EBITDA Margin has held roughly flat at 6.8% over 3 years.

🔴 PAT (Net Profit) has shrunk at 3.1% a year over 3 years.

🔴 EPS has shrunk at 3.4% a year over 3 years.

🟢 ROE has risen from 3.2% to 5.3% over 3 years (+2.2 pts).

🟡 ROCE has held roughly flat at 8.8% over 3 years.

🔴 Total Debt has grown at 6.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹34 Cr

Total Liabilities

₹30 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.8%

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

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Watch Items

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

DalalBaazaar Thesis

StrongValuation

WeakBusiness Quality · Financial Health · 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. 4 high-severity red flags sit above this conclusion and should be read first.

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