Dai-ichi Karkaria Limited

Basic Materials — Specialty Chemicals · NSE

₹311.95+₹5.15 (+1.68%)

DalalBaazaar Score

33 / 100

🔴 Weak

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, 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 Dai-ichi Karkaria Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dai-ichi Karkaria Limited, together with its subsidiaries, manufactures and sells specialty chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees182

Annual revenue₹161 Cr

How does it make money?

Turns over ₹161 Cr a year. Of every ₹100 of sales, about ₹-0 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 182 employees supports ₹88.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹88.3 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 -1.2% 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 -11% while net margin moved -104% 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-11%

Margin effect-104%

DalalBaazaar Score

33/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.9% a year

Quality vs. Valuation

Company Quality

28/ 100

Weak

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

Valuation

32/ 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.

Historical Valuation

Current P/E

109.1x

Sector Median

40.4x

median of 4 sector peers

⚠️Against its sector it trades 170% above the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

40.4x median of 4 peers · +170%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

30.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 66% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 11.8% to -0.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.3% to -1.2% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 4 high · 3 watch

🔴High leverageFinancial
Debt/Equity of 7.04x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only -2.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹1 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.0 points, from 13.0% to 5.0%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.6x to -2.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹4 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 17% against revenue up -11% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 66% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 13.0% to 5.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.04x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 17% against revenue up -11%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 170% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 11.8% to -0.4%. 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.

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

1EBITDA margin holds above 3%✓ 5.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -2.3x
How much operating profit can fall before interest stops being comfortably covered.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ -1.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 10 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

Price history

Quick Metrics

4 good · 2 neutral · 5 weak

Market Cap

₹232 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

109.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.26x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.86

Profitable

Profitable on a per-share basis

ROE

-0.4%

Weak

Weak capital efficiency

ROCE

-1.2%

Weak

Low return on total capital employed

Debt/Equity

7.04x

High

High leverage

Revenue Growth (YoY)

46.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

13000.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.48%

Modest

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

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.7%

Average

Average margins

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.50

Defensive

Steadier than the market

52W Range Position

20%

Mid-range

Technical Snapshot

RSI (14)

35.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹181 Cr	₹131 Cr	₹181 Cr	₹161 Cr	-3.9%
EBITDA	₹24 Cr	₹11 Cr	₹19 Cr	₹8 Cr	-30.1%
EBITDA Margin	13.0%	8.0%	10.7%	5.0%	—
PAT (Net Profit)	₹20 Cr	₹14 Cr	₹9 Cr	-₹1 Cr	—
EPS	₹26.94	₹18.65	₹12.11	₹-0.99	—
ROE	11.8%	7.7%	4.8%	-0.4%	—
ROCE	13.3%	11.7%	5.4%	-1.2%	—
Total Debt	₹38 Cr	₹19 Cr	₹13 Cr	₹13 Cr	-30.2%
Free Cash Flow	-₹13 Cr	₹4 Cr	₹13 Cr	-₹4 Cr	—

🔴 Revenue has shrunk at 3.9% a year over 3 years.

🔴 EBITDA has shrunk at 30.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.0% to 5.0% over 3 years (-8.0 pts).

🔴 PAT (Net Profit) has turned negative, from ₹20 Cr to -₹1 Cr.

🔴 EPS has turned negative, from ₹26.94 to ₹-0.99.

🔴 ROE has fallen from 11.8% to -0.4% over 3 years (-12.2 pts).

🔴 ROCE has fallen from 13.3% to -1.2% over 3 years (-14.4 pts).

🟢 Total Debt has shrunk at 30.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹224 Cr

Total Liabilities

₹39 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.7%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

20 Aug 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 positive1 mixed3 general

Dai-ichi Karkaria receives ₹15.1 lakh tax penalty for AY 2024-25

scanx.trade, 20 Sept

DAICHI Stock Price and Chart — NSE:DAICHI

TradingView, 20 Apr

Dai-ichi Karkaria Ltd is Rated Sell

MarketsMojo, 10 Oct

Dai-ichi Karkaria consolidated net profit rises 14550.00% in the June 2026 quarter

Business Standard, 13 AugResults

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

Dai-Ichi Karkaria Q1 FY27 Results: Turns Profitable, PAT Rs 2 Cr

Univest, 14 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Dai-ichi Karkaria Q1FY27 net profit up 178% to ₹6.09 crore on revenue growth

scanx.trade, 13 AugResults

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

Watch Items

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

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