Hindustan Organic Chemicals Limited

Basic Materials — Chemicals · BSE

₹56.34−₹2.96 (−4.99%)

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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hindustan Organic Chemicals Limited manufactures and sells bulk industrial chemicals and chemical intermediates in India.

IndustryChemicals

SectorBasic Materials

Employees171

Annual revenue₹574 Cr

How does it make money?

Turns over ₹574 Cr a year. Of every ₹100 of sales, about ₹-2 reaches shareholders as profit, with ₹0 left at the operating level before interest, tax and depreciation. Each of its 171 employees supports ₹3.36 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.36 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 0.5% 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 ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -9% while net margin moved -74% 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-9%

Margin effect-74%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

30/ 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

577.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 48% over 3 years.
Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 17.6% to 0.5% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 0.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹13 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 10.2x to 0.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹72 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.5 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 48% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 2.7% to 0.2%. 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 248.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.
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 -2%✓ 0.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 248.5x
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✗ -₹72 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 0.5%
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

2 good · 2 neutral · 7 weak

Market Cap

₹378 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

0.37x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.4

Loss-making

Negative earnings per share — the business is losing money

ROE

-1.2%

Weak

Weak capital efficiency

ROCE

0.5%

Weak

Low return on total capital employed

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

-41.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

-103.2%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹72 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.5%

Weak

Thin margins leave little room for error

Net Margin

-0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.60

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.94

Market-like

Moves roughly in line with the market

52W Range Position

82%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

50.6 / 42.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

64.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹631 Cr	₹704 Cr	₹536 Cr	₹574 Cr	-3.1%
EBITDA	₹17 Cr	₹16 Cr	-₹63 Cr	₹1 Cr	-59.4%
EBITDA Margin	2.7%	2.2%	-11.8%	0.2%	—
PAT (Net Profit)	-₹53 Cr	-₹55 Cr	₹392 Cr	-₹13 Cr	—
EPS	₹-8.24	₹-8.05	₹58.33	₹-1.9	—
ROE	—	—	37.5%	-1.2%	—
ROCE	17.6%	14.1%	36.6%	0.5%	—
Total Debt	₹544 Cr	₹564 Cr	₹206 Cr	₹285 Cr	-19.4%
Free Cash Flow	-₹14 Cr	-₹67 Cr	₹624 Cr	-₹72 Cr	—

🔴 Revenue has shrunk at 3.1% a year over 3 years.

🔴 EBITDA has shrunk at 59.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 2.7% to 0.2% over 3 years (-2.5 pts).

🔴 ROE has fallen from 37.5% to -1.2% over 3 years (-38.7 pts).

🔴 ROCE has fallen from 17.6% to 0.5% over 3 years (-17.1 pts).

🟢 Total Debt has shrunk at 19.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,542 Cr

Total Liabilities

₹549 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹70 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

58.8%

Corporate Actions

Ex-Dividend Date

10 Sept 1998

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

1 negative5 general

Hindustan Organic Chemicals Lower Circuit Streak: Day 2 Price and Data

Univest, 16 Oct

Hindustan Organic Chemicals Lower Circuit Today: Price, Data and Peers

Univest, 15 Oct

All 6 resolutions pass at Hindustan Organic Chemicals 65th AGM

scanx.trade, 28 Sept

Hindustan Organic Chemicals consolidated net profit declines 96.98% in the March 2026 quarter

Business Standard, 16 MayResults

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

Hindustan Organic Chemicals Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Hindustan Organic Chemicals Upper Circuit Today: Price, Data and Peers

Univest, 13 Oct

Watch Items

Revenue growth is negative (-41.4%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation

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.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑