IEL Limited

Basic Materials — Specialty Chemicals · BSE

₹5.30+₹0.13 (+2.51%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, 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, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

IEL Limited manufactures, trades, and markets chemicals, pharmaceuticals, and drug intermediates. The company also engages in solar and renewable energy; infrastructure and industrial support; trading and business operations; and project development businesses.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees1

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹37 left at the operating level before interest, tax and depreciation. Each of its 1 employees supports ₹97.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹97.0 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 0.7% 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 -90% while net margin moved -18% 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-90%

Margin effect-18%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 54.3% a year
✗ Profit has declined at 57.3% a year
✗ Latest-year revenue growth of -84.3% is below the longer-term trend — momentum is fading
✗ Profit fell 57.2% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

54/ 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

44.2x

3Y Median

105.9x

40 monthly readings · mean 134.8x · range 12.1x–407.1x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 58% below its 3y median of 105.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 40.4x.

vs. its own history

Cheap

105.9x median over 40 months · -58%

vs. sector peers

Fair

40.4x median of 4 peers · +9%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

196.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 23.7% to 36.6% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 244.8% to 0.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 125.9% to 0.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴High leverageFinancial
Debt/Equity of 2.00x — earnings must service borrowings before shareholders see anything.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 364.6x to 4.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹12 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 92% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 190% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 23.7% to 36.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 58% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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 2.00x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 244.8% to 0.4%. 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.
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 35%✓ 36.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹12 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 0.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

3 / 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

1 good · 3 neutral · 7 weak

Market Cap

₹69 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

44.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.54x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.12

Profitable

Profitable on a per-share basis

ROE

0.4%

Weak

Weak capital efficiency

ROCE

0.7%

Weak

Low return on total capital employed

Debt/Equity

2.00x

High

High leverage

Revenue Growth (YoY)

-84.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-57.2%

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

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

153.0%

Good

Healthy core-business profitability

Net Margin

101.6%

Good

Strong bottom-line conversion

Current Ratio

56.30

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.26

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

5.3 / 5.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹17 Cr	₹6 Cr	₹1 Cr	-54.3%
EBITDA	₹2 Cr	₹0 Cr	₹1 Cr	₹0 Cr	-47.2%
EBITDA Margin	23.7%	2.2%	10.0%	36.6%	—
PAT (Net Profit)	₹2 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-57.3%
EPS	₹0.53	₹0.06	₹0.03	₹0.01	-70.1%
ROE	244.8%	21.0%	1.0%	0.4%	—
ROCE	125.9%	16.3%	1.3%	0.7%	—
Total Debt	—	—	₹1 Cr	₹1 Cr	—
Free Cash Flow	₹1 Cr	-₹1 Cr	₹2 Cr	-₹12 Cr	—

🔴 Revenue has shrunk at 54.3% a year over 3 years.

🔴 EBITDA has shrunk at 47.2% a year over 3 years.

🟢 EBITDA Margin has risen from 23.7% to 36.6% over 3 years (+12.9 pts).

🔴 PAT (Net Profit) has shrunk at 57.3% a year over 3 years.

🔴 EPS has shrunk at 70.1% a year over 3 years.

🔴 ROE has fallen from 244.8% to 0.4% over 3 years (-244.4 pts).

🔴 ROCE has fallen from 125.9% to 0.7% over 3 years (-125.2 pts).

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹47 Cr

Total Liabilities

₹2 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

47.2%

Corporate Actions

Ex-Dividend Date

18 Sept 2003

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

4 mixed2 general

IEL Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

IDP Education (ASX:IEL) Earnings Slide Keeps The Undervalued Narrative In Focus

Yahoo Finance, 23 AugResults

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

IDP Education (ASX:IEL) Shares Surge as Education Stock Returns to Focus

Kalkine, 21 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.

IEL Ltd closes trading window from July 1 till Q1FY27 results

scanx.trade, 23 JunResults

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

IEL - IDP Education Limited (ASX: IEL) - A contrarian Review

Simply Wall Street, 09 Jun

IDP Education (ASX:IEL) Is Down 18.1% After FY26 Profit Slide And EPS Compression - What's Changed

Yahoo Finance, 22 Aug

Watch Items

Revenue growth is negative (-84.3%) 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

MiddlingBusiness Quality · Financial Health · Profitability · Valuation

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

3 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑