Ducol Organics And Colours Limited

Sector n/a · NSE

₹123.70−₹4.30 (−3.36%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

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

How does it make money?

Turns over ₹136 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation.

EBITDA margin12.4%

Net margin5.3%

What is its competitive advantage?Little sign of one

Returns on capital of 8.9% 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.

ROCE8.9%

ROE7.4%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +50% while net margin moved -21% 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-21%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

60/ 100

Fair

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

13.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 14.2% to 12.4% over 3 years.
Debt is rising
Total debt is up 206% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 15.0% to 8.9% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 176% against revenue growth of 50% — customers are taking longer to pay.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 206% over 3 years, from ₹14 Cr to ₹43 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 176% against revenue up 50% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹51 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 14.2% to 12.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 176% 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.
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✓ 14.4% CAGR
Latest reported year was 75.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹51 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 8.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹202 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

7.4%

Weak

Weak capital efficiency

ROCE

8.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.44x

Low

Conservative leverage

Revenue Growth (YoY)

75.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

56.7%

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

-₹51 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹123.7

Gross Margin

29.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

5.3%

Average

Average bottom-line conversion

Current Ratio

1.68

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

123.3 / 116.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

38.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹91 Cr	₹75 Cr	₹77 Cr	₹136 Cr	+14.4%
EBITDA	₹13 Cr	₹9 Cr	₹10 Cr	₹17 Cr	+9.3%
EBITDA Margin	14.2%	12.5%	12.5%	12.4%	—
PAT (Net Profit)	₹6 Cr	₹5 Cr	₹5 Cr	₹7 Cr	+5.8%
EPS	₹4.2	₹3.3	₹2.84	—	—
ROE	10.1%	7.5%	5.1%	7.4%	—
ROCE	15.0%	11.3%	8.5%	8.9%	—
Total Debt	₹14 Cr	₹21 Cr	₹28 Cr	₹43 Cr	+45.2%
Free Cash Flow	-₹2 Cr	₹4 Cr	₹9 Cr	-₹51 Cr	—

🟢 Revenue has grown at 14.4% a year over 3 years.

🟢 EBITDA has grown at 9.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 14.2% to 12.4% over 3 years (-1.8 pts).

🟢 PAT (Net Profit) has grown at 5.8% a year over 3 years.

🔴 ROE has fallen from 10.1% to 7.4% over 3 years (-2.6 pts).

🔴 ROCE has fallen from 15.0% to 8.9% over 3 years (-6.1 pts).

🔴 Total Debt has grown at 45.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹170 Cr

Total Liabilities

₹72 Cr

Total Debt

₹43 Cr

Cash & Equivalents

₹19 Cr

Operating Cash Flow

-₹9 Cr

Capex

-₹43 Cr

Recent News

1 mixed5 general

DUCOL ORGANICS AND COLOURS Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 15 Oct

Ducol Organics & Colours Share Price Update and Valuation

Univest, 29 Sept

Ducol Organics & Colours Share Price Fall: Stock Analysis

Univest, 28 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Ducol approves share swap issuance of 17.6 lakh shares

scanx.trade, 08 Jun

Ducol Organics And Colours (NSEI:DUCOL) - Stock Analysis

Simply Wall Street, 19 Jan

DUCOL ORGS AND COLOURS LT Share Price

Upstox, 02 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong13/20

🟡GrowthModest9.3/20

🔴ProfitabilityWeak6.2/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 11% a year14.4% CAGR
✓EBITDA margin holds above 10%12.4%
✗Debt / EBITDA stays below 2x2.5x
✗Free cash flow remains positive-₹51 Cr
✓ROCE stays above 8%8.9%