Heranba Industries Limited

Basic Materials — Agricultural Inputs · NSE

₹165.35+₹1.86 (+1.14%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Heranba Industries Limited manufactures and sells various agrochemicals in India and internationally. The company provides intermediates, herbicides, fungicides and plant growth regulators, as well as pest control products for public health applications.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,195

Annual revenue₹1,587 Cr

How does it make money?

Turns over ₹1,587 Cr a year. Of every ₹100 of sales, about ₹-5 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 1,195 employees supports ₹1.33 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.33 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 -2.8% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +21% while net margin moved -161% 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-161%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 22.9 points over the period

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

36/ 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

EV/EBITDA

16.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.9% to -10.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.5% to -2.8% — often a sign of competition or overexpansion.

Red Flags

8 items require attention · 5 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 519% over 3 years, from ₹93 Cr to ₹576 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only -0.5x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹76 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.1 points, from 12.6% to 4.6%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.7x to -0.5x.
🟡Receivables growing faster than salesFinancial
Receivables up 53% against revenue up 21% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 52% against revenue up 21% — stock may not be moving.

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 12.6% to 4.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 7.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 53% against revenue up 21%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 6.6% 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.
Returns on shareholder capital are falling
ROE has dropped from 12.9% to -10.0%. 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.

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

1EBITDA margin holds above 3%✓ 4.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 7.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹188 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -0.5x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 5% a year✓ 6.6% CAGR
Latest reported year was -15.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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 · 3 neutral · 6 weak

Market Cap

₹662 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

0.87x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-18.84

Loss-making

Negative earnings per share — the business is losing money

ROE

-10.0%

Weak

Weak capital efficiency

ROCE

-2.8%

Weak

Low return on total capital employed

Debt/Equity

0.75x

Moderate

Moderate leverage

Revenue Growth (YoY)

-15.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

16.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.60%

Modest

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

Free Cash Flow

-₹188 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

7.1%

Average

Average margins

Net Margin

-4.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.08

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.51

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

169.6 / 170.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

18.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,311 Cr	₹1,249 Cr	₹1,402 Cr	₹1,587 Cr	+6.6%
EBITDA	₹166 Cr	₹89 Cr	₹100 Cr	₹73 Cr	-24.1%
EBITDA Margin	12.6%	7.2%	7.2%	4.6%	—
PAT (Net Profit)	₹104 Cr	₹35 Cr	₹3 Cr	-₹76 Cr	—
EPS	₹26.08	₹8.72	₹0.77	₹-19.1	—
ROE	12.9%	4.1%	0.4%	-10.0%	—
ROCE	17.5%	7.1%	4.7%	-2.8%	—
Total Debt	₹93 Cr	₹165 Cr	₹349 Cr	₹576 Cr	+83.7%
Free Cash Flow	₹61 Cr	-₹146 Cr	-₹175 Cr	-₹188 Cr	—

🟢 Revenue has grown at 6.6% a year over 3 years.

🔴 EBITDA has shrunk at 24.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.6% to 4.6% over 3 years (-8.1 pts).

🔴 PAT (Net Profit) has turned negative, from ₹104 Cr to -₹76 Cr.

🔴 EPS has turned negative, from ₹26.08 to ₹-19.1.

🔴 ROE has fallen from 12.9% to -10.0% over 3 years (-22.9 pts).

🔴 ROCE has fallen from 17.5% to -2.8% over 3 years (-20.3 pts).

🔴 Total Debt has grown at 83.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹61 Cr to -₹188 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,970 Cr

Total Liabilities

₹1,200 Cr

Cash & Equivalents

₹24 Cr

Operating Cash Flow

-₹96 Cr

Capex

-₹92 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

17 Sept 2025

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive2 mixed3 general

Heranba Industries (HERANBA.NS) Slips 2.16% to ₹165.61, Testing Key Support Zone - Trade Entry Signals

https://www.siam.in/, 08 Oct

Heranba Industries gains 3% as Q1 profit rises; Aurobindo Pharma, Caplin Point Labs fall on USFDA...

Moneycontrol.com, 24 AugResults

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

Heranba Industries shares surge on investing ₹25 crore in agro chemicals subsidiary

Upstox, 24 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Heranba Industries Board Approves ₹25 Crore Investment In Mikusu India

Sahi, 22 Aug

Heranba Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Heranba Industries publishes Q1FY27 financial results in newspapers

scanx.trade, 24 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Revenue growth is negative (-15.3%) 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

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑