Hindcon Chemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹26.79−₹0.04 (−0.15%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hindcon Chemicals Limited manufactures and sells sodium silicates and construction chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees157

Annual revenue₹65 Cr

How does it make money?

Turns over ₹65 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 157 employees supports ₹41.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹41.3 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 8.3% 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 -24% while net margin moved -1% 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-24%

Margin effect-1%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 8.9% a year
✗ Profit has declined at 9.2% a year

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

62/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

31.9x

3Y Median

27.1x

40 monthly readings · mean 30.1x · range 16.8x–51.5x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 18% above its 3y median of 27.1x. 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 21% below the peer median of 40.4x.

vs. its own history

Fair

27.1x median over 40 months · +18%

vs. sector peers

Cheap

40.4x median of 4 peers · -21%

vs. generic bands

Fair

15x–35x

EV/EBITDA

23.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 7.4% to 9.1% over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 10.2% to 5.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 14.1% to 8.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1000% over 3 years, from ₹1 Cr to ₹11 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 103% against revenue up -24% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹7 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 25% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.4% to 9.1%. 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 21% 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?

Returns on shareholder capital are falling
ROE has dropped from 10.2% to 5.7%. 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 7%✓ 9.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 8.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 27.1x✓ 31.9x 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

4 good · 5 neutral · 2 weak

Market Cap

₹137 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

31.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.40x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.84

Profitable

Profitable on a per-share basis

ROE

5.7%

Weak

Weak capital efficiency

ROCE

8.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

43.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

80.0%

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

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.0%

Average

Average margins

Net Margin

6.1%

Average

Average bottom-line conversion

Current Ratio

3.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

50%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.3 / 25.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹86 Cr	₹64 Cr	₹56 Cr	₹65 Cr	-8.9%
EBITDA	₹6 Cr	₹9 Cr	₹6 Cr	₹6 Cr	-2.2%
EBITDA Margin	7.4%	13.5%	10.7%	9.1%	—
PAT (Net Profit)	₹4 Cr	₹6 Cr	₹4 Cr	₹3 Cr	-9.2%
EPS	₹1.13	₹1.62	₹1	—	—
ROE	10.2%	12.4%	7.0%	5.7%	—
ROCE	14.1%	16.6%	9.6%	8.3%	—
Total Debt	₹1 Cr	—	₹1 Cr	₹11 Cr	+122.4%
Free Cash Flow	₹4 Cr	₹6 Cr	₹0 Cr	-₹7 Cr	—

🔴 Revenue has shrunk at 8.9% a year over 3 years.

🔴 EBITDA has shrunk at 2.2% a year over 3 years.

🟢 EBITDA Margin has risen from 7.4% to 9.1% over 3 years (+1.7 pts).

🔴 PAT (Net Profit) has shrunk at 9.2% a year over 3 years.

🔴 ROE has fallen from 10.2% to 5.7% over 3 years (-4.5 pts).

🔴 ROCE has fallen from 14.1% to 8.3% over 3 years (-5.7 pts).

🔴 Total Debt has grown at 122.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹76 Cr

Total Liabilities

₹18 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹3 Cr

Corporate Actions

Ex-Dividend Date

13 Aug 2024

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 mixed4 general

Hindcon Chemicals sets Aug 20 for its 28th annual general meeting

scanx.trade, 28 Jul

Hindcon Chemicals vs Nifty 50: Share Price Performance Compared

Univest, 25 Sept

Hindcon Chemicals consolidated net profit rises 80.74% in the June 2026 quarter

Business Standard, 13 AugResults

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

Hindcon Chemicals Share Price gains; key ratios in focus

Univest, 29 SeptPrice 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.

HINDCON Stock Price and Chart — NSE:HINDCON

TradingView, 10 Jul

HINDCON CHEMICALS LIMITED Share Price

Upstox, 25 Mar

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑