DCM Shriram Fine Chemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹27.10−₹0.50 (−1.81%)

DalalBaazaar Score

29 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by high debt relative to equity, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

DCM Shriram Fine Chemicals Limited engages in the manufacturing and selling of chemical products and intermediates in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees589

Annual revenue₹383 Cr

How does it make money?

Turns over ₹383 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 589 employees supports ₹65.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin2.1%

Net margin-0.9%

Revenue / employee₹65.0 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.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?Little sign of one

Returns on capital of -0.9% 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.

ROCE-0.9%

ROE-1.7%

Peer median ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 1 years revenue moved -10% while net margin moved -121% 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-10%

Margin effect-121%

DalalBaazaar Score

29/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 10.4% a year
✗ Profit fell 40.0% in the latest year

Quality vs. Valuation

Company Quality

27/ 100

Weak

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

Valuation

30/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

1.12x

EV/EBITDA

28.1x

PEG

—

Dividend Yield

1.48%

What's Good / What's Bad

🟢 What's Going Well1

Cash generation is improving
Free cash flow is up 21% over 1 years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 8.2% to 2.1% over 1 years.
Return on equity is falling
ROE has dropped from 8.9% to -1.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.9% to -0.9% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 6.03x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only -1.9x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹4 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.0 points, from 8.2% to 2.1%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 15.7x to -1.9x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 8.2% to 2.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 6.03x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 8.9% to -1.7%. 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.
Several serious flags at once
4 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

1EBITDA margin holds above 0%✓ 2.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -1.9x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹14 Cr
Profit that never becomes cash eventually stops being profit.
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%✗ -0.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

2 good · 2 neutral · 7 weak

Market Cap

₹236 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.12x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.62

Loss-making

Negative earnings per share — the business is losing money

ROE

-1.7%

Weak

Weak capital efficiency

ROCE

-0.9%

Weak

Low return on total capital employed

Debt/Equity

6.03x

High

High leverage

Revenue Growth (YoY)

-7.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-40.0%

Falling

Profits are shrinking

Dividend Yield

1.48%

Modest

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

Free Cash Flow

₹14 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹27.1

Operating Margin

3.5%

Weak

Thin margins leave little room for error

Net Margin

-1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.76

Comfortable

Healthy short-term liquidity

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.7 / 27.1

Bullish alignment (short > long)

RSI (14)

24.5

Oversold zone

Financial Trend (2-Year)

Metric	FY25	FY26	1Y CAGR
Revenue	₹427 Cr	₹383 Cr	-10.4%
EBITDA	₹35 Cr	₹8 Cr	-76.7%
EBITDA Margin	8.2%	2.1%	—
PAT (Net Profit)	₹19 Cr	-₹4 Cr	—
EPS	₹2.21	₹-0.41	—
ROE	8.9%	-1.7%	—
ROCE	11.9%	-0.9%	—
Total Debt	₹13 Cr	₹13 Cr	-4.7%
Free Cash Flow	₹12 Cr	₹14 Cr	+20.6%

🔴 Revenue has shrunk at 10.4% a year over 1 years.

🔴 EBITDA has shrunk at 76.7% a year over 1 years.

🔴 EBITDA Margin has fallen from 8.2% to 2.1% over 1 years (-6.0 pts).

🔴 PAT (Net Profit) has turned negative, from ₹19 Cr to -₹4 Cr.

🔴 EPS has turned negative, from ₹2.21 to ₹-0.41.

🔴 ROE has fallen from 8.9% to -1.7% over 1 years (-10.6 pts).

🔴 ROCE has fallen from 11.9% to -0.9% over 1 years (-12.8 pts).

🟢 Total Debt has shrunk at 4.7% a year over 1 years.

🟢 Free Cash Flow has grown at 20.6% a year over 1 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹295 Cr

Total Liabilities

₹84 Cr

Total Debt

₹13 Cr

Cash & Equivalents

₹21 Cr

Operating Cash Flow

₹16 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

7.6%

Insider Holding

57.2%

Corporate Actions

Dividend Rate

₹0.4

Ex-Dividend Date

01 Jul 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%