Kemistar Corporation Limited

Basic Materials — Specialty Chemicals · BSE

₹46.49+₹0.59 (+1.29%)

DalalBaazaar Score

48 / 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, 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 Kemistar Corporation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kemistar Corporation Limited, together with its subsidiary, engages in the manufacture, import, export, and trading of chemicals, dyes, pigments, pesticides, intermediates, and specialty chemicals in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees2

Annual revenue₹27 Cr

How does it make money?

Turns over ₹27 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 2 employees supports ₹13.48 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin4.9%

Net margin2.1%

Revenue / employee₹13.48 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?Little sign of one

Returns on capital of 3.8% 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.

ROCE3.8%

ROE3.0%

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 +48% while net margin moved -55% 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+48%

Margin effect-55%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 3.0% is weak

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

72/ 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

0.1x

3Y Median

118.0x

40 monthly readings · mean 112.9x · range 51.2x–204.8x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 100% below its 3y median of 118.0x. 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 100% below the peer median of 40.4x.

vs. its own history

Cheap

118.0x median over 40 months · -100%

vs. sector peers

Cheap

40.4x median of 4 peers · -100%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

0.1x

P/B

2.64x

EV/EBITDA

44.1x

PEG

—

Dividend Yield

0.43%

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 0.1x the stock trades 100% below its own median of 118.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 9.7% to 4.9% over 3 years.
Debt is rising
Total debt is up 234% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 6.7% to 3.8% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 205% against revenue growth of 48% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 102% against revenue growth of 48% — stock may not be moving.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 234% over 3 years, from ₹3 Cr to ₹9 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 205% against revenue up 48% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 33% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.7 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 102% against revenue up 48% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 100% 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 100% 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 9.7% to 4.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 7.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 205% against revenue up 48%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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.
Several serious flags at once
3 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

1Revenue growth stays above 11% a year✓ 14.1% CAGR
Latest reported year was 251.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 3%✓ 4.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 7.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 3.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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 · 3 neutral · 3 weak

Market Cap

₹50 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

0.1x

Cheap

Cheap against the generic band

P/B Ratio

2.64x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹394.25

Profitable

Profitable on a per-share basis

ROE

3.0%

Weak

Weak capital efficiency

ROCE

3.8%

Weak

Low return on total capital employed

Debt/Equity

0.49x

Low

Conservative leverage

Revenue Growth (YoY)

251.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

130.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.43%

Modest

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

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹46.49

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

2.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.16

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.09

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

47.8 / 49.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹18 Cr	₹11 Cr	₹18 Cr	₹27 Cr	+14.1%
EBITDA	₹2 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-8.8%
EBITDA Margin	9.7%	12.7%	7.1%	4.9%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-12.7%
EPS	₹0.78	₹0.49	₹0.56	₹0.52	-12.6%
ROE	4.8%	3.0%	3.3%	3.0%	—
ROCE	6.7%	4.4%	3.7%	3.8%	—
Total Debt	₹3 Cr	₹7 Cr	₹8 Cr	₹9 Cr	+49.5%
Free Cash Flow	₹3 Cr	-₹4 Cr	-₹2 Cr	-₹0 Cr	—

🟢 Revenue has grown at 14.1% a year over 3 years.

🔴 EBITDA has shrunk at 8.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.7% to 4.9% over 3 years (-4.7 pts).

🔴 PAT (Net Profit) has shrunk at 12.7% a year over 3 years.

🔴 EPS has shrunk at 12.6% a year over 3 years.

🔴 ROE has fallen from 4.8% to 3.0% over 3 years (-1.8 pts).

🔴 ROCE has fallen from 6.7% to 3.8% over 3 years (-2.9 pts).

🔴 Total Debt has grown at 49.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹38 Cr

Total Liabilities

₹19 Cr

Total Debt

₹9 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.7%

Corporate Actions

Dividend Rate

₹0.2

Ex-Dividend Date

23 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

4 positive2 general

Kemistar Corporation appoints Riddhi Parshwa Shah as Company Secretary

scanx.trade, 12 Oct

Compare with DEVIKA FINST

Equitymaster, 13 Oct

Kemistar Corporation Limited Approves Final Dividend for the Year Ended March 31, 2026

marketscreener.com, 01 OctCapital return

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

Kemistar shareholders approve ₹0.20 dividend; all AGM resolutions pass

scanx.trade, 01 OctCapital return

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

KRBL consolidated net profit rises 73.16% in the June 2026 quarter

Business Standard, 14 AugResults

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

Dividend Stocks This Week: IRCTC, Dixon Technologies, Titagarh Rail Systems & More — Check Full List

NDTV Profit, 20 SeptCapital return

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

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.8/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive11.8/15

🟡RiskModerate5.4/10

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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 11% a year14.1% CAGR
✓EBITDA margin holds above 3%4.9%
✗Debt / EBITDA falls below 3x7.0x
✗Free cash flow remains positive-₹0 Cr
✗ROCE stays above 8%3.8%