JSW Dulux Limited

Basic Materials — Specialty Chemicals · NSE

₹3,040.00+₹3.40 (+0.11%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

JSW Dulux Limited manufactures, distributes, and sells paints and coatings in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees1,300

Annual revenue₹3,580 Cr

How does it make money?

Turns over ₹3,580 Cr a year. Of every ₹100 of sales, about ₹55 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 1,300 employees supports ₹2.75 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin16.8%

Net margin55.1%

Revenue / employee₹2.75 Cr

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.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 89.6%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 80.5% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE89.6%

ROE80.5%

Peer median ROE22.3%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 11.9% and earnings to grow about 12.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.9%

Est. earnings growth+12.4%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -5% while net margin moved +521% 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-5%

Margin effect+521%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.19 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

75/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

7.1x

3Y Median

34.9x

40 monthly readings · mean 32.7x · range 7.0x–47.0x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 80% below its 3y median of 34.9x. 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 trades 83% below the peer median of 40.4x.

vs. its own history

Cheap

34.9x median over 40 months · -80%

vs. sector peers

Cheap

40.4x median of 4 peers · -83%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.1x

P/B

5.65x

EV/EBITDA

22.8x

PEG

0.09

Dividend Yield

1.64%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 14.5% to 16.8% over 3 years.
Return on equity is rising
ROE has improved from 25.5% to 80.5%.
Return on capital is rising
ROCE has improved from 31.6% to 89.6%.
High return on capital employed
ROCE of 89.6% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 7.1x the stock trades 80% below its own median of 34.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 3.23x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,106 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 89.6% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 14.5% to 16.8%. 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 80% 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.
Cheaper than its peers
It trades 83% 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?

Leverage amplifies any setback
Debt/Equity of 3.23x. Interest is payable whether or not the business has a good year.
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
Small 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 15%✓ 16.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1,106 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 87%✓ 89.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 34.9x✓ 7.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 2 neutral · 4 weak

Market Cap

₹13,844 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.1x

Cheap

Cheap against the generic band

P/B Ratio

5.65x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹430.95

Profitable

Profitable on a per-share basis

ROE

80.5%

Strong

Strong capital efficiency

ROCE

89.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.23x

High

High leverage

Revenue Growth (YoY)

-3.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

48.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.64%

Modest

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

Free Cash Flow

-₹1,106 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹3,040

P/E (Forward)

30.7x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

9.8%

Average

Average margins

Net Margin

53.7%

Good

Strong bottom-line conversion

Current Ratio

1.57

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.19

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3078.6 / 3107.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

37.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,777 Cr	₹3,937 Cr	₹4,043 Cr	₹3,580 Cr	-1.8%
EBITDA	₹550 Cr	₹666 Cr	₹668 Cr	₹600 Cr	+3.0%
EBITDA Margin	14.5%	16.9%	16.5%	16.8%	—
PAT (Net Profit)	₹335 Cr	₹427 Cr	₹430 Cr	₹1,974 Cr	+80.6%
EPS	₹73.58	₹93.68	₹94.31	₹433.42	+80.6%
ROE	25.5%	32.1%	32.3%	80.5%	—
ROCE	31.6%	39.4%	39.8%	89.6%	—
Total Debt	₹70 Cr	₹60 Cr	₹62 Cr	₹79 Cr	+4.3%
Free Cash Flow	₹382 Cr	₹367 Cr	₹206 Cr	-₹1,106 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.8% a year).

🟢 EBITDA has grown at 3.0% a year over 3 years.

🟢 EBITDA Margin has risen from 14.5% to 16.8% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has grown at 80.6% a year over 3 years.

🟢 EPS has grown at 80.6% a year over 3 years.

🟢 ROE has risen from 25.5% to 80.5% over 3 years (+55.1 pts).

🟢 ROCE has risen from 31.6% to 89.6% over 3 years (+58.0 pts).

🔴 Total Debt has grown at 4.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹382 Cr to -₹1,106 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,795 Cr

Total Liabilities

₹1,344 Cr

Total Debt

₹79 Cr

Cash & Equivalents

₹270 Cr

Operating Cash Flow

₹93 Cr

Capex

-₹1,199 Cr

Shareholding (proxy)

Institutional Holding

28.5%

Insider Holding

62.2%

Corporate Actions

Dividend Rate

₹50

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹3,399

+11.8% vs CMP

Target Range

₹3,350 – ₹3,448

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

3 positive3 general

JSW Dulux Stock Split: Check ratio, record date and other details

Livemint, 22 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Is JSW Dulux the Best Stock in Its Sector? A Look at the Numbers

Univest, 15 Oct

JSW Dulux Q1 Results: Profit drops 12% to Rs 79 crore; board approves stock split

The Economic Times, 11 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

JSW Dulux seeks approval for 1:10 equity share split via postal ballot

scanx.trade, 21 Aug

Special dividend stocks: TCS, JSW Dulux, Premco Global, Honda India Power in 6 firms offering extra payout

IndiaIPO, 11 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

JSW Dulux Ltd is Rated Sell

MarketsMojo, 15 Oct

Watch Items

Revenue growth is negative (-3.0%) 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

🟢Business QualityStrong16.6/20

🟡Financial HealthAdequate10.6/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong13.5/15

🟢ValuationAttractive10.2/15

🔴RiskHigh4.1/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 15%16.8%
✗Free cash flow remains positive-₹1,106 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 87%89.6%
✓Valuation vs its own median of 34.9x7.1x today