Kanchi Karpooram Limited

Basic Materials — Specialty Chemicals · NSE

₹371.40+₹10.80 (+3.00%)

DalalBaazaar Score

43 / 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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kanchi Karpooram Limited engages in the manufacture and sale of camphor and allied products in India. The company operates through two segments: Manufacture and Sale of Camphor and allied products and Real Estate.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees67

Annual revenue₹148 Cr

How does it make money?

Turns over ₹148 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 67 employees supports ₹2.21 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.21 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 3.5% 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 ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -32% while net margin moved -43% 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-32%

Margin effect-43%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 12.3% a year
✗ Profit has declined at 27.2% a year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

73/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

21.1x

Sector Median

40.4x

median of 4 sector peers

🟢Against its sector it trades 48% below the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

40.4x median of 4 peers · -48%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 39% over 3 years.
Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 9.5% to 7.8% over 3 years.
Return on equity is falling
ROE has dropped from 6.8% to 2.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 9.1% to 3.5% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹10 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 61% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 39% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 48% 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?

Margins are being competed away
EBITDA margin has fallen from 9.5% to 7.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 6.8% to 2.4%. 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 6%✓ 7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹10 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 3.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 10 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

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹161 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.1x

Fair

Fairly valued against the generic band

P/B Ratio

0.75x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹17.6

Profitable

Profitable on a per-share basis

ROE

2.4%

Weak

Weak capital efficiency

ROCE

3.5%

Weak

Low return on total capital employed

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

16.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

112.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.27%

Modest

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

Free Cash Flow

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

12.9%

Average

Average margins

Net Margin

4.9%

Average

Average bottom-line conversion

Current Ratio

15.68

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

25%

Mid-range

Technical Snapshot

RSI (14)

42.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹220 Cr	₹145 Cr	₹151 Cr	₹148 Cr	-12.3%
EBITDA	₹21 Cr	₹4 Cr	₹22 Cr	₹12 Cr	-18.0%
EBITDA Margin	9.5%	2.9%	14.6%	7.8%	—
PAT (Net Profit)	₹13 Cr	₹1 Cr	₹14 Cr	₹5 Cr	-27.2%
EPS	₹30.91	₹1.38	₹31.59	₹11.9	-27.3%
ROE	6.8%	0.3%	6.5%	2.4%	—
ROCE	9.1%	0.4%	8.7%	3.5%	—
Total Debt	₹1 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-15.2%
Free Cash Flow	-₹5 Cr	₹25 Cr	-₹1 Cr	-₹10 Cr	—

🔴 Revenue has shrunk at 12.3% a year over 3 years.

🔴 EBITDA has shrunk at 18.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.5% to 7.8% over 3 years (-1.7 pts).

🔴 PAT (Net Profit) has shrunk at 27.2% a year over 3 years.

🔴 EPS has shrunk at 27.3% a year over 3 years.

🔴 ROE has fallen from 6.8% to 2.4% over 3 years (-4.4 pts).

🔴 ROCE has fallen from 9.1% to 3.5% over 3 years (-5.5 pts).

🟢 Total Debt has shrunk at 15.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹224 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

60.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

15 Sept 2026

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

2 positive1 mixed1 negative2 general

KANCHI Stock Price and Chart — NSE:KANCHI

TradingView, 20 Apr

Kanchi Karpooram net profit surges 109% in Q1FY27 on camphor strength

scanx.trade, 12 AugResults

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

Kanchi Karpooram Ltd is Rated Hold by MarketsMOJO

MarketsMojo, 07 Oct

Dividend Alert: Camphor Maker Approves Rs 1 Final Dividend Amid Earnings Pressure

Dalal Street Investment Journal, 22 SeptCapital return

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

Kanchi Karpooram AGM voting results: All resolutions pass with majority

scanx.trade, 24 SeptResults

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

Kanchi Karpooram FY26 net profit falls 63% to ₹516.3 lakh

scanx.trade, 28 AugResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low.

2 of 4 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑