Haryana Leather Chemicals Limited

Basic Materials — Specialty Chemicals · BSE

₹57.21−₹2.31 (−3.88%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Haryana Leather Chemicals Limited manufactures and sells various performance chemicals for use in leather processing, footwear finishing, textile printing, pressure sensitive adhesives, and PVC additives in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees82

Annual revenue₹51 Cr

How does it make money?

Turns over ₹51 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 82 employees supports ₹62.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹62.6 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.9% 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.

Peer median ROE22.3%

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 +21% while net margin moved +6% 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+21%

Margin effect+6%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 5.3% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

57/ 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.

Historical Valuation

Current P/E

24.0x

3Y Median

12.4x

40 monthly readings · mean 13.6x · range 7.0x–30.4x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 94% above its 3y median of 12.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 40% below the peer median of 40.4x.

vs. its own history

Expensive

12.4x median over 40 months · +94%

vs. sector peers

Cheap

40.4x median of 4 peers · -40%

vs. generic bands

Fair

15x–35x

EV/EBITDA

6.2x

PEG

2.83

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
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

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.91x — earnings must service borrowings before shareholders see anything.
🟡Debt is increasingFinancial
Total debt is up 41% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 40% 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?

Leverage amplifies any setback
Debt/Equity of 1.91x. Interest is payable whether or not the business has a good year.
The price already assumes success
The stock trades 94% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 6.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.

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

1EBITDA margin holds above 7%✓ 8.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 6.5% CAGR
Latest reported year was 24.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.9%
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

4 good · 3 neutral · 4 weak

Market Cap

₹28 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.0x

Fair

Fairly valued against the generic band

P/B Ratio

0.63x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.38

Profitable

Profitable on a per-share basis

ROE

5.3%

Weak

Weak capital efficiency

ROCE

7.9%

Weak

Low return on total capital employed

Debt/Equity

1.91x

High

High leverage

Revenue Growth (YoY)

24.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-96.0%

Falling

Profits are shrinking

Dividend Yield

1.75%

Modest

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

Free Cash Flow

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-3.7%

Weak

Thin margins leave little room for error

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

4.87

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.97

Market-like

Moves roughly in line with the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

57.7 / 58.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

52.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹42 Cr	₹44 Cr	₹49 Cr	₹51 Cr	+6.5%
EBITDA	₹4 Cr	₹4 Cr	₹4 Cr	₹5 Cr	+8.5%
EBITDA Margin	8.4%	9.9%	8.7%	8.9%	—
PAT (Net Profit)	₹2 Cr	₹5 Cr	₹2 Cr	₹2 Cr	+8.5%
EPS	₹3.79	₹9.41	₹4.69	₹4.84	+8.5%
ROE	5.0%	11.2%	5.4%	5.3%	—
ROCE	6.7%	13.3%	7.6%	7.9%	—
Total Debt	₹1 Cr	₹0 Cr	₹1 Cr	₹1 Cr	+12.1%
Free Cash Flow	-₹3 Cr	₹7 Cr	-₹1 Cr	₹4 Cr	—

🟢 Revenue has grown at 6.5% a year over 3 years.

🟢 EBITDA has grown at 8.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.9% over 3 years.

🟢 PAT (Net Profit) has grown at 8.5% a year over 3 years.

🟢 EPS has grown at 8.5% a year over 3 years.

🟡 ROE has held roughly flat at 5.3% over 3 years.

🟢 ROCE has risen from 6.7% to 7.9% over 3 years (+1.2 pts).

🔴 Total Debt has grown at 12.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹3 Cr to ₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹52 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.3%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

11 Sept 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%

Recent News

1 positive1 negative4 general

Haryana Leather Chemicals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 04 Sept

Haryana Leather Chemicals Limited Announces Sad Demise of Non-Executive Director Mr. Narendra Kumar Jain

scanx.trade, 19 Mar

BIOPOL Stock Price and Chart — NSE:BIOPOL

TradingView, 13 Feb

Astra Microwave Products consolidated net profit declines 24.09% in the June 2026 quarter

Business Standard, 10 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Dividend stocks alert! Last day to qualify for dividend of these stocks - Check full list, amount, record date

Livemint, 10 SeptCapital return

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

CHEMCRUX Stock Price and Chart — NSE:CHEMCRUX

TradingView, 18 Aug

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingGrowth · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

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

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑