Deep Polymers Limited

Basic Materials — Specialty Chemicals · NSE

₹40.80+₹0.80 (+2.00%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by 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. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

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 Deep Polymers Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Deep Polymers Limited manufactures and sells filler masterbatches in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees120

Annual revenue₹99 Cr

How does it make money?

Turns over ₹99 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 120 employees supports ₹82.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹82.2 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 8.6% 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 -18% while net margin moved -12% 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-18%

Margin effect-12%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.4% a year
✗ Profit has declined at 10.5% a year

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

88/ 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

5.5x

Sector Median

40.4x

median of 4 sector peers

🟢Against its sector it trades 86% below the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

40.4x median of 4 peers · -86%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.7x

PEG

0.16

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 14.6% to 18.7% over 3 years.
Debt is being paid down
Total debt is down 41% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.29x 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 14.0% to 6.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.5% to 8.6% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴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.
🟡Profit is decliningFinancial
Net profit is down 28% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 14.6% to 18.7%. 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 41% 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 86% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹7 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Returns on shareholder capital are falling
ROE has dropped from 14.0% to 6.4%. 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.
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 17%✓ 18.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 8.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 6.1x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹99 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.5x

Cheap

Cheap against the generic band

P/B Ratio

0.94x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹7.47

Profitable

Profitable on a per-share basis

ROE

6.4%

Weak

Weak capital efficiency

ROCE

8.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

18.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

33.3%

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

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.3%

Average

Average margins

Net Margin

7.0%

Average

Average bottom-line conversion

Current Ratio

3.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.51

Defensive

Steadier than the market

52W Range Position

44%

Mid-range

Technical Snapshot

RSI (14)

32.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹120 Cr	₹105 Cr	₹98 Cr	₹99 Cr	-6.4%
EBITDA	₹18 Cr	₹15 Cr	₹17 Cr	₹18 Cr	+1.6%
EBITDA Margin	14.6%	13.9%	17.4%	18.7%	—
PAT (Net Profit)	₹9 Cr	₹7 Cr	₹5 Cr	₹7 Cr	-10.5%
EPS	₹4.1	₹3.04	₹2.15	₹2.8	-11.9%
ROE	14.0%	8.4%	5.8%	6.4%	—
ROCE	13.5%	9.4%	8.2%	8.6%	—
Total Debt	₹51 Cr	₹36 Cr	₹34 Cr	₹30 Cr	-16.2%
Free Cash Flow	-₹2 Cr	₹13 Cr	-₹5 Cr	₹7 Cr	—

🔴 Revenue has shrunk at 6.4% a year over 3 years.

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

🟢 EBITDA Margin has risen from 14.6% to 18.7% over 3 years (+4.1 pts).

🔴 PAT (Net Profit) has shrunk at 10.5% a year over 3 years.

🔴 EPS has shrunk at 11.9% a year over 3 years.

🔴 ROE has fallen from 14.0% to 6.4% over 3 years (-7.6 pts).

🔴 ROCE has fallen from 13.5% to 8.6% over 3 years (-4.9 pts).

🟢 Total Debt has shrunk at 16.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹147 Cr

Total Liabilities

₹42 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹12 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.5%

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

1 mixed5 general

Deep Polymers (DEEP) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Deep Polymers Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 05 Oct

Deep Polymers board to meet Oct 10 to consider preferential share issue

scanx.trade, 07 Oct

Deep Polymers Ltd Locks at Upper Circuit With 4.97% Gain — Buyers Queue, Sellers Absent

MarketsMojo, 12 Oct

Deep Polymers Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 04 Sept

Deep Polymers Limited reports strong Q1 FY27 performance PAT rises 32% YoY

Moneycontrol.com, 17 AugResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingRisk

WeakBusiness Quality · Growth · Profitability

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. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑