Kahan Packaging Limited

Consumer Cyclical — Packaging & Containers · BSE

₹9.90₹0.00 (0.00%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kahan Packaging Limited manufactures polymer based woven products in India. It offers polypropylene (PP) and high-density polyethylene (HDPE) tapes, woven fabrics, woven sacks, and bags, as well as BOPP laminated PP woven bags.

IndustryPackaging & Containers

SectorConsumer Cyclical

Employees11

Annual revenue₹30 Cr

How does it make money?

Turns over ₹30 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 11 employees supports ₹2.76 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.76 Cr

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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 19.7% 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 ROE25.9%

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 +47% while net margin moved -21% 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+47%

Margin effect-21%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 11.2% is moderate
✗ ROE has fallen by 35.2 points over the period

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

81/ 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

9.2x

3Y Median

14.6x

39 monthly readings · mean 16.1x · range 9.1x–33.8x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 37% below its 3y median of 14.6x. 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 87% below the peer median of 69.2x.

vs. its own history

Cheap

14.6x median over 39 months · -37%

vs. sector peers

Cheap

69.2x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.4x

PEG

1.76

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 14% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive 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 45.8% to 10.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.6% to 19.7% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Receivables growing faster than salesFinancial
Receivables up 127% against revenue up 47% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.7% 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.
Priced below its own history
The stock trades 37% 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 87% 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?

Sales are being booked faster than collected
Receivables are up 127% against revenue up 47%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 45.8% to 10.6%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.7% CAGR
Latest reported year was 8.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 10.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Interest cover stays above 3x✗ 2.7x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 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

6 good · 5 neutral · 0 weak

Market Cap

₹11 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.2x

Cheap

Cheap against the generic band

P/B Ratio

0.98x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.08

Profitable

Profitable on a per-share basis

ROE

11.2%

Moderate

Moderate capital efficiency

ROCE

19.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.60x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.6%

Modest

Modest growth

Profit Growth (YoY)

11.4%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

6.7%

Average

Average asset productivity

Operating Margin

8.3%

Average

Average margins

Net Margin

3.8%

Average

Average bottom-line conversion

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.18

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

10.7 / 13.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

17.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹21 Cr	₹25 Cr	₹28 Cr	₹30 Cr	+13.7%
EBITDA	₹2 Cr	₹2 Cr	₹3 Cr	₹3 Cr	+15.9%
EBITDA Margin	9.9%	9.6%	9.8%	10.5%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+5.2%
EPS	₹0.92	₹1.15	₹1.03	—	—
ROE	45.8%	11.5%	11.4%	10.6%	—
ROCE	26.6%	17.0%	18.8%	19.7%	—
Total Debt	₹8 Cr	₹6 Cr	₹8 Cr	₹7 Cr	-5.0%
Free Cash Flow	-₹1 Cr	-₹3 Cr	-₹1 Cr	₹2 Cr	—

🟢 Revenue has grown at 13.7% a year over 3 years.

🟢 EBITDA has grown at 15.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.5% over 3 years.

🟢 PAT (Net Profit) has grown at 5.2% a year over 3 years.

🔴 ROE has fallen from 45.8% to 10.6% over 3 years (-35.2 pts).

🔴 ROCE has fallen from 26.6% to 19.7% over 3 years (-7.0 pts).

🟢 Total Debt has shrunk at 5.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹25 Cr

Total Liabilities

₹14 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.4%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

5 positive1 general

Compare with

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