Driven by short-term liabilities exceed short-term assets, negative free cash flow, the company is currently loss-making.
In simple words: The company is currently losing money, 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, 6:07 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.
The 60-second version of Kesoram Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Kesoram Industries Limited manufactures and sells viscose rayon, filament yarn, transparent paper, and chemicals in India. It sells its rayon under the Kesoram Rayon brand name; and transparent paper and films under the Kesophane brand name.
IndustryBuilding Materials
SectorBasic Materials
Employees11
Annual revenue₹245 Cr
How does it make money?
Turns over ₹245 Cr a year. Of every ₹100 of sales, about ₹-36 reaches shareholders as profit, with ₹-13 left at the operating level before interest, tax and depreciation. Each of its 11 employees supports ₹22.32 Cr of revenue a year, the signature of a capital- or asset-led business.
EBITDA margin-12.8%
Net margin-35.9%
Revenue / employee₹22.32 Cr
Who are its competitors?
The closest listed comparisons in its industry are ULTRATECH CEMENT LIMITED, GRASIM INDUSTRIES LTD, AMBUJA CEMENTS LTD, SHREE CEMENT LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%
GRASIM INDUSTRIES LTDP/E 34.8x · ROE 5.5%
AMBUJA CEMENTS LTDP/E 20.4x · ROE 7.4%
SHREE CEMENT LIMITEDP/E 49.7x · ROE 7.0%
What is its competitive advantage?Little sign of one
Returns on capital of -12.7% 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.
ROCE-12.7%
ROE-23.8%
Peer median ROE7.4%
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -93% while net margin moved +595% 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-93%
Margin effect+595%
DalalBaazaar Score
31/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ Revenue has contracted at 59.7% a year
✗ Profit fell 101.6% in the latest year
Quality vs. Valuation
Company Quality
28/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
36/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
P/E (Trailing)
Not meaningful
P/B
1.05x
EV/EBITDA
—
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well2
Debt is being paid down
Total debt is down 89% over 3 years.
Return on equity is rising
ROE has improved from -41.1% to -23.8%.
🔴 What Needs Attention4
Margins are compressing
EBITDA margin has slipped from 8.8% to -12.8% over 3 years.
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 2.3% to -12.7% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.66 — near-term obligations exceed near-term assets.
Red Flags
6 items require attention · 3 high · 3 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only -2.7x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹88 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 21.6 points, from 8.8% to -12.8%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -2.3x to -2.7x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹109 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.66 — near-term obligations exceed near-term assets.
Investment Thesis
🟢 Bull CaseWhat could make this work?
Deleveraging frees up earnings
Debt is down 89% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
🔴 Bear CaseWhat could go wrong?
Margins are being competed away
EBITDA margin has fallen from 8.8% to -12.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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.
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
1EBITDA margin holds above -15%✓ -12.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹109 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -2.7x
How much operating profit can fall before interest stops being comfortably covered.
4ROCE stays above 8%✗ -12.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
Investment Checklist
4 / 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
2 good · 3 neutral · 6 weak
Market Cap
₹388 Cr
Micro Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
1.05x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-0.29
Loss-making
Negative earnings per share — the business is losing money
ROE
-23.8%
Weak
Weak capital efficiency
ROCE
-12.7%
Weak
Low return on total capital employed
Debt/Equity
0.59x
Low
Conservative leverage
Revenue Growth (YoY)
5.9%
Modest
Modest growth
Profit Growth (YoY)
-101.6%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
-₹109 Cr
Cash burning
Spending more cash than the operations bring in
More Metrics
CMP
₹12.48
Operating Margin
-18.8%
Weak
Thin margins leave little room for error
Net Margin
-3.4%
Weak
Very little revenue reaches the bottom line
Current Ratio
0.66
Tight
Tight short-term liquidity
Beta (vs Nifty)
0.95
Market-like
Moves roughly in line with the market
52W Range Position
82%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
11.2 / 11.5
Bearish alignment (short < long)
Price vs SMA 200
Above
Long-term uptrend
RSI (14)
58.3
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹3,762 Cr
₹246 Cr
₹258 Cr
₹245 Cr
-59.7%
EBITDA
₹331 Cr
-₹25 Cr
-₹39 Cr
-₹31 Cr
—
EBITDA Margin
8.8%
-10.1%
-15.1%
-12.8%
—
PAT (Net Profit)
-₹194 Cr
-₹381 Cr
₹5,565 Cr
-₹88 Cr
—
EPS
₹-6.83
₹-12.36
₹179.14
₹-2.84
—
ROE
-41.1%
-402.2%
1232.5%
-23.8%
—
ROCE
2.3%
-2.1%
-10.4%
-12.7%
—
Total Debt
₹1,938 Cr
₹2,270 Cr
₹199 Cr
₹219 Cr
-51.7%
Free Cash Flow
₹58 Cr
-₹80 Cr
₹31 Cr
-₹109 Cr
—
🔴 Revenue has shrunk at 59.7% a year over 3 years.
🔴 EBITDA has turned negative, from ₹331 Cr to -₹31 Cr.
🔴 EBITDA Margin has fallen from 8.8% to -12.8% over 3 years (-21.6 pts).
🟢 ROE has risen from -41.1% to -23.8% over 3 years (+17.2 pts).
🔴 ROCE has fallen from 2.3% to -12.7% over 3 years (-15.0 pts).
🟢 Total Debt has shrunk at 51.7% a year over 3 years.
🔴 Free Cash Flow has turned negative, from ₹58 Cr to -₹109 Cr.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
DalalBaazaar Thesis
🔴Business QualityWeak4.7/20
🔴Financial HealthStretched8.6/20
🔴GrowthWeak2.4/20
🔴ProfitabilityWeak5/15
🟡ValuationFair7.1/15
🔴RiskHigh3.5/10
Weak on the fundamentals
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.
