GHCL Limited

Basic Materials — Chemicals · NSE

₹391.00+₹5.65 (+1.47%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, 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

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

Company site ↗

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

What does this company do?

GHCL Limited, together with its subsidiaries, manufactures and trades inorganic chemicals in India and internationally.

IndustryChemicals

SectorBasic Materials

Employees1,037

Annual revenue₹3,060 Cr

How does it make money?

Turns over ₹3,060 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 1,037 employees supports ₹2.95 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin23.4%

Net margin15.4%

Revenue / employee₹2.95 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.

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?Some evidence

ROCE of 16.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE16.9%

ROE13.3%

Peer median ROE15.4%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 7.4% and earnings to grow about 12.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.4%

Est. earnings growth+12.2%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -33% while net margin moved -39% 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-33%

Margin effect-39%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 12.3% a year
✗ Profit has declined at 25.5% a year

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

81/ 100

Cheap

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.

Historical Valuation

Current P/E

7.0x

3Y Median

7.2x

40 monthly readings · mean 6.9x · range 3.7x–9.8x

Sector Median

33.8x

median of 3 sector peers

🟡Currently trading close to its 3y median of 7.2x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 79% below the peer median of 33.8x.

vs. its own history

Fair

7.2x median over 40 months · -3%

vs. sector peers

Cheap

33.8x median of 3 peers · -79%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.0x

P/B

0.99x

EV/EBITDA

5.1x

PEG

0.18

Dividend Yield

3.07%

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 77% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 34.0% to 23.4% over 3 years.
Return on equity is falling
ROE has dropped from 28.9% to 13.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.6% to 16.9% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 2.35x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 10.7 points, from 34.0% to 23.4%.
🟡Profit is decliningFinancial
Net profit is down 59% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 77% 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 79% 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?

Margins are being competed away
EBITDA margin has fallen from 34.0% to 23.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.35x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 28.9% to 13.3%. 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
2 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 21%✓ 23.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹424 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 14%✓ 16.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 7.2x✓ 7.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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

7 good · 2 neutral · 2 weak

Market Cap

₹3,602 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.0x

Cheap

Cheap against the generic band

P/B Ratio

0.99x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹55.72

Profitable

Profitable on a per-share basis

ROE

13.3%

Moderate

Moderate capital efficiency

ROCE

16.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.35x

High

High leverage

Revenue Growth (YoY)

-2.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

39.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.07%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹424 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹391

P/E (Forward)

5.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

23.5%

Good

Healthy core-business profitability

Net Margin

17.1%

Good

Strong bottom-line conversion

Current Ratio

4.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.04

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

403.3 / 421.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,539 Cr	₹3,436 Cr	₹3,176 Cr	₹3,060 Cr	-12.3%
EBITDA	₹1,545 Cr	₹866 Cr	₹911 Cr	₹715 Cr	-22.7%
EBITDA Margin	34.0%	25.2%	28.7%	23.4%	—
PAT (Net Profit)	₹1,142 Cr	₹794 Cr	₹624 Cr	₹472 Cr	-25.5%
EPS	₹120.06	₹83.33	₹65.34	₹50.15	-25.2%
ROE	28.9%	26.7%	17.9%	13.3%	—
ROCE	33.6%	30.3%	22.3%	16.9%	—
Total Debt	₹361 Cr	₹210 Cr	₹119 Cr	₹83 Cr	-38.7%
Free Cash Flow	₹499 Cr	₹691 Cr	₹323 Cr	₹424 Cr	-5.3%

🔴 Revenue has shrunk at 12.3% a year over 3 years.

🔴 EBITDA has shrunk at 22.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 34.0% to 23.4% over 3 years (-10.7 pts).

🔴 PAT (Net Profit) has shrunk at 25.5% a year over 3 years.

🔴 EPS has shrunk at 25.2% a year over 3 years.

🔴 ROE has fallen from 28.9% to 13.3% over 3 years (-15.6 pts).

🔴 ROCE has fallen from 33.6% to 16.9% over 3 years (-16.7 pts).

🟢 Total Debt has shrunk at 38.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 5.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,300 Cr

Total Liabilities

₹748 Cr

Total Debt

₹83 Cr

Cash & Equivalents

₹44 Cr

Operating Cash Flow

₹687 Cr

Capex

-₹264 Cr

Shareholding (proxy)

Institutional Holding

22.5%

Insider Holding

36.3%

Corporate Actions

Dividend Rate

₹12

Ex-Dividend Date

18 Jun 2026

Analyst Consensus

Target Price (Mean)

₹800

+104.6% vs CMP

Target Range

₹800 – ₹800

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

4 positive2 general

GHCL Share Price Near 52-Week Low: Fundamentals and Sector

Univest, 15 Oct

GHCL Limited (NSE:GHCL) Looks Interesting, And It's About To Pay A Dividend

Simply Wall Street, 14 JunCapital return

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

GHCL Share Price News: Fresh Low, ROE and ROCE Snapshot

Univest, 13 Oct

GHCL Q1 profit rises 32% to Rs 191 cr on lower costs, warns of margin pressure ahead

The Economic Times, 01 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

GHCL dividend: Chemicals-maker announces ₹12/share dividend issue; details here

Upstox, 05 MayCapital return

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

GHCL Textiles Q1FY27 net profit jumps 191% on fabric sales surge

scanx.trade, 30 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Revenue growth is negative (-2.7%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟢Business QualityStrong14.3/20

🟢Financial HealthStrong14.5/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate8.2/15

🟢ValuationAttractive11.7/15

🔴RiskHigh4.3/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 21%23.4%
✓Free cash flow remains positive₹424 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 14%16.9%
✓Valuation vs its own median of 7.2x7.0x today