DMCC Speciality Chemicals Limited

Basic Materials — Chemicals · NSE

₹315.30−₹3.00 (−0.94%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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, 6:55 pm

Understanding the Business

Company site ↗

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

What does this company do?

DMCC Speciality Chemicals Limited manufactures and sells specialty and commodity chemicals in India and internationally. The company offers base, boron, functional, and life science chemicals. It also provides custom manufacturing and technology services.

IndustryChemicals

SectorBasic Materials

Employees450

Annual revenue₹572 Cr

How does it make money?

Turns over ₹572 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 450 employees supports ₹1.27 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.27 Cr

Who are its competitors?

The closest listed comparisons in its industry are 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?Some evidence

ROCE of 16.7% 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 ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +50% while net margin moved +163% 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+50%

Margin effect+163%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.28 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

77/ 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

19.7x

3Y Median

62.5x

40 monthly readings · mean 64.6x · range 22.9x–124.2x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 69% below its 3y median of 62.5x. 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 42% below the peer median of 33.8x.

vs. its own history

Cheap

62.5x median over 40 months · -69%

vs. sector peers

Cheap

33.8x median of 3 peers · -42%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.9x

PEG

0.34

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 3.5% to 11.0%.
Return on capital is rising
ROCE has improved from 7.7% to 16.7%.
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 · 1 high · 2 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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹24 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 84% against revenue up 50% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 69% 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 42% 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?

Sales are being booked faster than collected
Receivables are up 84% against revenue up 50%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 11% a year✓ 14.5% CAGR
Latest reported year was 99.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹24 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 14%✓ 16.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

₹786 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.7x

Fair

Fairly valued against the generic band

P/B Ratio

3.17x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹16.03

Profitable

Profitable on a per-share basis

ROE

11.0%

Moderate

Moderate capital efficiency

ROCE

16.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

99.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

163.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.79%

Modest

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

Free Cash Flow

-₹24 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

12.0%

Average

Average margins

Net Margin

5.7%

Average

Average bottom-line conversion

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.28

Defensive

Steadier than the market

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

318.3 / 300.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

53.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹382 Cr	₹321 Cr	₹426 Cr	₹572 Cr	+14.5%
EBITDA	₹37 Cr	₹38 Cr	₹58 Cr	₹64 Cr	+19.8%
EBITDA Margin	9.8%	11.8%	13.7%	11.2%	—
PAT (Net Profit)	₹7 Cr	₹12 Cr	₹22 Cr	₹27 Cr	+58.0%
EPS	₹2.78	₹4.65	₹8.63	₹10.96	+58.0%
ROE	3.5%	5.5%	9.5%	11.0%	—
ROCE	7.7%	11.3%	15.3%	16.7%	—
Total Debt	₹101 Cr	₹88 Cr	₹72 Cr	₹110 Cr	+2.9%
Free Cash Flow	₹8 Cr	₹19 Cr	₹31 Cr	-₹24 Cr	—

🟢 Revenue has grown at 14.5% a year over 3 years.

🟢 EBITDA has grown at 19.8% a year over 3 years.

🟢 EBITDA Margin has risen from 9.8% to 11.2% over 3 years (+1.4 pts).

🟢 PAT (Net Profit) has grown at 58.0% a year over 3 years.

🟢 EPS has grown at 58.0% a year over 3 years.

🟢 ROE has risen from 3.5% to 11.0% over 3 years (+7.5 pts).

🟢 ROCE has risen from 7.7% to 16.7% over 3 years (+8.9 pts).

🔴 Total Debt has grown at 2.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹8 Cr to -₹24 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹446 Cr

Total Liabilities

₹197 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹18 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.6%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

21 Aug 2026

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive5 general

DMCC Share Price news: valuation, sector and price action

Univest, 05 Oct

If EPS Growth Is Important To You, DMCC Speciality Chemicals (NSE:DMCC) Presents An Opportunity

Simply Wall Street, 07 Oct

DMCC Speciality Chemicals Q1FY27 PAT up 163% to ₹20.40 Cr on price surge

scanx.trade, 11 Aug

DMCC Speciality Chemicals Ltd Near One-Year High Streak

Univest, 06 Oct

DMCC Speciality Chemicals Board Meeting Scheduled for May 15, 2026 to Consider Q4FY26 Results and Dividend

scanx.trade, 06 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

DMCC Speciality Chemicals addresses BSE over unexplained stock surge, cites market forces

Indiatimes, 17 Apr

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability

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

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