Hindustan Adhesives Limited

Basic Materials — Specialty Chemicals · NSE

₹386.50−₹2.10 (−0.54%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hindustan Adhesives Limited, a specialty adhesive coating company, manufactures and sells self-adhesive tapes in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees266

Annual revenue₹255 Cr

How does it make money?

Turns over ₹255 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 266 employees supports ₹95.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹95.8 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?Some evidence

ROCE of 17.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 -20% while net margin moved +284% 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-20%

Margin effect+284%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.00 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

85/ 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

7.9x

Sector Median

40.4x

median of 4 sector peers

🟢Against its sector it trades 80% below the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

40.4x median of 4 peers · -80%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.9x

PEG

0.18

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.2% to 15.7% over 3 years.
Return on equity is rising
ROE has improved from 8.1% to 13.7%.
Return on capital is rising
ROCE has improved from 13.6% to 17.6%.
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

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 84% over 3 years, from ₹66 Cr to ₹122 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 19% against revenue up -20% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 24% against revenue up -20% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.87 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.2% to 15.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 80% 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?

The debt load needs earnings to hold up
Debt is 3.1x 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 19% against revenue up -20%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 14%✓ 15.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.1x
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✓ ₹10 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 15%✓ 17.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 10 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

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹198 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.9x

Cheap

Cheap against the generic band

P/B Ratio

1.82x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹48.75

Profitable

Profitable on a per-share basis

ROE

13.7%

Moderate

Moderate capital efficiency

ROCE

17.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.12x

Moderate

Moderate leverage

Revenue Growth (YoY)

20.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

183.5%

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

₹10 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

21.6%

Good

Healthy core-business profitability

Net Margin

8.1%

Average

Average bottom-line conversion

Current Ratio

0.87

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.00

Defensive

Steadier than the market

52W Range Position

73%

Mid-range

Technical Snapshot

RSI (14)

59.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹319 Cr	₹303 Cr	₹284 Cr	₹255 Cr	-7.2%
EBITDA	₹23 Cr	₹36 Cr	₹37 Cr	₹40 Cr	+20.6%
EBITDA Margin	7.2%	11.8%	13.2%	15.7%	—
PAT (Net Profit)	₹5 Cr	₹16 Cr	₹15 Cr	₹15 Cr	+45.2%
EPS	₹9.5	₹32.07	₹30.08	₹29.11	+45.2%
ROE	8.1%	21.7%	16.8%	13.7%	—
ROCE	13.6%	27.0%	19.4%	17.6%	—
Total Debt	₹66 Cr	₹69 Cr	₹109 Cr	₹122 Cr	+22.6%
Free Cash Flow	₹19 Cr	₹2 Cr	-₹48 Cr	₹10 Cr	-19.1%

🔴 Revenue has shrunk at 7.2% a year over 3 years.

🟢 EBITDA has grown at 20.6% a year over 3 years.

🟢 EBITDA Margin has risen from 7.2% to 15.7% over 3 years (+8.6 pts).

🟢 PAT (Net Profit) has grown at 45.2% a year over 3 years.

🟢 EPS has grown at 45.2% a year over 3 years.

🟢 ROE has risen from 8.1% to 13.7% over 3 years (+5.5 pts).

🟢 ROCE has risen from 13.6% to 17.6% over 3 years (+4.0 pts).

🔴 Total Debt has grown at 22.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 19.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹288 Cr

Total Liabilities

₹179 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹31 Cr

Capex

-₹21 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.8%

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

2 mixed4 general

Hindustan Adhesives Share Price near 52-week high, analysis

Univest, 15 Oct

Hindustan Adhesives to hold 38th AGM on September 30, 2026

scanx.trade, 30 Sept

Hindustan Adhesives soars as Q1 PAT jumps 183.7% YoY

Business Standard, 17 AugResults

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

SPEB Adhesives Ltd Peer Comparison – Compare with Others

Value Research, 09 Oct

Hindustan Adhesives Ltd. Share Price Rises 17.18% Today

Univest, 18 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.

Hindustan Adhesives reports FY26 net profit of ₹1,653 lakh

scanx.trade, 25 Jun

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Valuation

MiddlingFinancial Health · Growth · Profitability

WeakRisk

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 — Debt / EBITDA falls below 3x · see Key things to watch ↑