Keltech Energies Limited

Basic Materials — Specialty Chemicals · BSE

₹13,189.40−₹532.40 (−3.88%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Keltech Energies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Keltech Energies Limited manufactures and sells cartridge explosives, bulk emulsion explosives, mono methyl amine nitrate (MMAN) solutions, expanded perlite products, perlite filter aids, and accessories for explosives in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees292

Annual revenue₹529 Cr

How does it make money?

Turns over ₹529 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 292 employees supports ₹1.81 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin8.7%

Net margin5.4%

Revenue / employee₹1.81 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 20.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 18.7% 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.

ROCE20.3%

ROE18.7%

Peer median ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -6% while net margin moved +155% 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-6%

Margin effect+155%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 46.2x is demanding — it needs sustained high growth to justify
✗ P/E is 133% above its own historical median of 19.8x — expensive by its own standards
✗ P/B of 8.62x is a steep premium to book

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

38/ 100

Expensive

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

46.2x

3Y Median

19.8x

40 monthly readings · mean 23.1x · range 12.0x–48.4x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 133% above its 3y median of 19.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

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

vs. its own history

Expensive

19.8x median over 40 months · +133%

vs. sector peers

Fair

40.4x median of 4 peers · +15%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

46.2x

P/B

8.62x

EV/EBITDA

30.0x

PEG

1.36

Dividend Yield

0.01%

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 4.6% to 8.7% over 3 years.
Return on equity is rising
ROE has improved from 14.7% to 18.7%.
High return on capital employed
ROCE of 20.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 131% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 23% against revenue growth of -6% — stock may not be moving.
Valuation above its historical average
At 46.2x the stock trades 133% above its own median of 19.8x.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 131% over 3 years, from ₹32 Cr to ₹73 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹37 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 23% against revenue up -6% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.3% 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 4.6% to 8.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

The price already assumes success
The stock trades 133% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 7%✓ 8.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹37 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 17%✓ 20.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 19.8x✗ 46.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹1,319 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

46.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.62x

Rich

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

EPS (TTM)

₹285.37

Profitable

Profitable on a per-share basis

ROE

18.7%

Strong

Strong capital efficiency

ROCE

20.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.48x

Low

Conservative leverage

Revenue Growth (YoY)

28.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-1.6%

Falling

Profits are shrinking

Dividend Yield

0.01%

Modest

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

Free Cash Flow

-₹37 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹13,189.4

P/E (Forward)

103.5x

Flat

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

Operating Margin

6.3%

Average

Average margins

Net Margin

5.0%

Average

Average bottom-line conversion

Current Ratio

1.12

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

86%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

13069.1 / 12766.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹562 Cr	₹449 Cr	₹478 Cr	₹529 Cr	-2.0%
EBITDA	₹26 Cr	₹33 Cr	₹41 Cr	₹46 Cr	+20.7%
EBITDA Margin	4.6%	7.4%	8.6%	8.7%	—
PAT (Net Profit)	₹12 Cr	₹19 Cr	₹25 Cr	₹29 Cr	+34.0%
EPS	₹119.21	₹194.13	₹249.41	₹286.65	+34.0%
ROE	14.7%	19.5%	20.0%	18.7%	—
ROCE	20.2%	25.3%	24.6%	20.3%	—
Total Debt	₹32 Cr	₹25 Cr	₹39 Cr	₹73 Cr	+32.1%
Free Cash Flow	₹13 Cr	₹42 Cr	-₹30 Cr	-₹37 Cr	—

🟡 Revenue has been broadly flat over 3 years (-2.0% a year).

🟢 EBITDA has grown at 20.7% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 8.7% over 3 years (+4.0 pts).

🟢 PAT (Net Profit) has grown at 34.0% a year over 3 years.

🟢 EPS has grown at 34.0% a year over 3 years.

🟢 ROE has risen from 14.7% to 18.7% over 3 years (+4.1 pts).

🟡 ROCE has held roughly flat at 20.3% over 3 years.

🔴 Total Debt has grown at 32.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹13 Cr to -₹37 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹355 Cr

Total Liabilities

₹202 Cr

Total Debt

₹73 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

₹49 Cr

Capex

-₹86 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

58.3%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

31 Jul 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

1 positive1 negative4 general

Keltech Energies fixes record date for final dividend of ₹1.50

scanx.trade, 04 OctCapital return

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

Keltech Energies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Keltech Energies Ltd. (KELENRG) Share Price Trades Within 2% of 52-Week High

Univest, 19 Aug

Keltech Energies standalone net profit declines 1.58% in the June 2026 quarter

Business Standard, 01 AugResults

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

Keltech Energies Lower Circuit Today: Price, Data and Peers

Univest, 08 Oct

Keltech Energies Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate11.1/20

🟡Financial HealthAdequate12/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong9.8/15

🔴ValuationDemanding3.3/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 7%8.7%
✗Free cash flow remains positive-₹37 Cr
✓Debt / EBITDA stays below 2x1.6x
✓ROCE stays above 17%20.3%
✗Valuation vs its own median of 19.8x46.2x today