Dhaval Packaging Limited

Consumer Cyclical — Packaging & Containers · BSE

₹118.00−₹2.00 (−1.67%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:52 pm

Understanding the Business

Company site ↗

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

What does this company do?

Dhaval Packaging Limited designs, manufactures and sells In-Mold Labelling (IML) plastic containers and SAW pipe protection plastic caps in India.

IndustryPackaging & Containers

SectorConsumer Cyclical

Employees64

Annual revenue₹65 Cr

How does it make money?

Turns over ₹65 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 64 employees supports ₹1.02 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.02 Cr

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?Some evidence

ROCE of 29.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +51% while net margin moved +943% 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+51%

Margin effect+943%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

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

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

20.2x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 71% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -71%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.2x

PEG

0.13

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 6.4% to 21.4% over 3 years.
Return on equity is rising
ROE has improved from 19.9% to 26.1%.
Return on capital is rising
ROCE has improved from 7.6% to 29.2%.
High return on capital employed
ROCE of 29.2% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 72% over 3 years, from ₹14 Cr to ₹24 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 114% against revenue up 51% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 29.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 6.4% to 21.4%. 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 71% 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?

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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 11% a year✓ 14.8% CAGR
Latest reported year was 24.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 21.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 26%✓ 29.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹162 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

20.2x

Fair

Fairly valued against the generic band

P/B Ratio

3.83x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.85

Profitable

Profitable on a per-share basis

ROE

31.6%

Strong

Strong capital efficiency

ROCE

29.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.78x

Moderate

Moderate leverage

Revenue Growth (YoY)

24.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

33.0%

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

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

13.8%

Good

Assets are working hard

Operating Margin

26.0%

Good

Healthy core-business profitability

Net Margin

12.4%

Good

Strong bottom-line conversion

Current Ratio

1.10

Adequate

Adequate, but no real cushion

52W Range Position

36%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

121.5 / 118.8

Bullish alignment (short > long)

RSI (14)

42.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹43 Cr	₹48 Cr	₹52 Cr	₹65 Cr	+14.8%
EBITDA	₹3 Cr	₹5 Cr	₹10 Cr	₹14 Cr	+71.9%
EBITDA Margin	6.4%	10.5%	19.4%	21.4%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹6 Cr	₹8 Cr	+150.9%
ROE	19.9%	37.8%	30.0%	26.1%	—
ROCE	7.6%	14.9%	33.0%	29.2%	—
Total Debt	₹14 Cr	₹19 Cr	₹17 Cr	₹24 Cr	+19.8%
Free Cash Flow	-₹5 Cr	-₹3 Cr	-₹6 Cr	-₹7 Cr	—

🟢 Revenue has grown at 14.8% a year over 3 years.

🟢 EBITDA has grown at 71.9% a year over 3 years.

🟢 EBITDA Margin has risen from 6.4% to 21.4% over 3 years (+15.0 pts).

🟢 PAT (Net Profit) has grown at 150.9% a year over 3 years.

🟢 ROE has risen from 19.9% to 26.1% over 3 years (+6.2 pts).

🟢 ROCE has risen from 7.6% to 29.2% over 3 years (+21.6 pts).

🔴 Total Debt has grown at 19.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹66 Cr

Total Liabilities

₹36 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

3.8%

Insider Holding

67.6%

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

6 general

Compare with

Equitymaster, 16 Oct

Dhaval Packaging IPO Date, Price Band, GMP, Subscription & Allotment

IndiaIPO, 24 Jul

Dhaval Packaging Limited Share Price

Upstox, 06 Aug

BSE SME Dhaval Packaging delivers a well-packed debut

Business Standard, 06 Aug

Dhaval Packaging IPO Day 1: Issue booked 26% so far. Check GMP, issue details

Livemint, 30 Jul

Dhaval Packaging Limited Share Price: 52-Week High View

Univest, 17 Aug

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑