Clara Industries Limited

Consumer Cyclical — Packaging & Containers · BSE

₹33.07+₹1.57 (+4.98%)

DalalBaazaar Score

46 / 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, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Clara Industries Limited manufactures and sells low and high-density polyethylene and polypropylene products, biaxially oriented polypropylene products, adhesive tapes, and related products in India.

IndustryPackaging & Containers

SectorConsumer Cyclical

Annual revenue₹14 Cr

How does it make money?

Turns over ₹14 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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 4.1% 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 ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +23% while net margin moved -63% 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+23%

Margin effect-63%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 7.1% — barely ahead of inflation
✗ Profit has declined at 23.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 38.5% in the latest year

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

46/ 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

53.3x

3Y Median

17.6x

40 monthly readings · mean 25.7x · range 9.2x–50.3x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 202% above its 3y median of 17.6x. 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 23% below the peer median of 69.2x.

vs. its own history

Expensive

17.6x median over 40 months · +202%

vs. sector peers

Cheap

69.2x median of 4 peers · -23%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

27.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 75% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 42.2% to 3.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 57.7% to 4.1% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 3 high · 4 watch

🔴High leverageFinancial
Debt/Equity of 1.73x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 26.7 points, from 49.3% to 22.5%.
🔴Inventory building faster than salesFinancial
Inventory up 495% against revenue up 23% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹8 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 54% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 43% against revenue up 23% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 86% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 75% 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 23% 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?

Margins are being competed away
EBITDA margin has fallen from 49.3% to 22.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 1.73x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 43% against revenue up 23%. 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 202% 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.
Growth barely outpaces inflation
Revenue compounding at 7.1% 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.

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

1EBITDA margin holds above 21%✓ 22.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 5% a year✓ 7.1% CAGR
Latest reported year was 122.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

₹85 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

53.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.40x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.62

Profitable

Profitable on a per-share basis

ROE

3.0%

Weak

Weak capital efficiency

ROCE

4.1%

Weak

Low return on total capital employed

Debt/Equity

1.73x

High

High leverage

Revenue Growth (YoY)

122.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-38.5%

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

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.4%

Average

Average margins

Net Margin

10.9%

Good

Strong bottom-line conversion

Current Ratio

21.80

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

31.9 / 32.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

68.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹13 Cr	₹11 Cr	₹14 Cr	+7.1%
EBITDA	₹6 Cr	₹7 Cr	₹3 Cr	₹3 Cr	-17.5%
EBITDA Margin	49.3%	51.5%	30.2%	22.5%	—
PAT (Net Profit)	₹4 Cr	₹4 Cr	₹2 Cr	₹2 Cr	-23.0%
EPS	₹2.86	₹2.07	₹0.91	₹0.67	-38.4%
ROE	42.2%	10.2%	4.4%	3.0%	—
ROCE	57.7%	14.7%	7.0%	4.1%	—
Total Debt	₹4 Cr	₹2 Cr	₹1 Cr	₹1 Cr	-36.6%
Free Cash Flow	-₹3 Cr	-₹24 Cr	₹4 Cr	-₹8 Cr	—

🟢 Revenue has grown at 7.1% a year over 3 years.

🔴 EBITDA has shrunk at 17.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 49.3% to 22.5% over 3 years (-26.7 pts).

🔴 PAT (Net Profit) has shrunk at 23.0% a year over 3 years.

🔴 EPS has shrunk at 38.4% a year over 3 years.

🔴 ROE has fallen from 42.2% to 3.0% over 3 years (-39.3 pts).

🔴 ROCE has fallen from 57.7% to 4.1% over 3 years (-53.5 pts).

🟢 Total Debt has shrunk at 36.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹63 Cr

Total Liabilities

₹2 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

9.7%

Insider Holding

67.3%

Corporate Actions

Ex-Dividend Date

06 Jun 2024

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 negative5 general

Compare with

Equitymaster, 16 Oct

Clara Industries reports FY26 revenue of ₹1,400.27 lakh

scanx.trade, 30 May

Clara Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 03 Sept

Clara Standalone June 2026 Net Sales at Rs 4.04 crore, up 122.43% Y-o-Y

Moneycontrol.com, 21 Sept

Clara Industries standalone net profit declines 14.81% in the June 2026 quarter

Business Standard, 18 SeptResults

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

Clara Industries re-appoints Parry Kukreja as MD for five years

scanx.trade, 03 Oct

Watch Items

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

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Profitability · Risk

WeakGrowth · Valuation

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

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑