Khaitan Chemicals and Fertilizers Limited

Basic Materials — Agricultural Inputs · NSE

₹48.41+₹0.25 (+0.52%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Khaitan Chemicals and Fertilizers Limited manufactures and sells single super phosphate (SSP), sulphuric acid, and other chemicals in India. The company operates through Fertilizer, and Chemicals & Specialty Chemicals segments.

IndustryAgricultural Inputs

SectorBasic Materials

Employees644

Annual revenue₹1,001 Cr

How does it make money?

Turns over ₹1,001 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 644 employees supports ₹1.55 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.55 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 31.0% 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 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 +13% while net margin moved +36% 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+13%

Margin effect+36%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.53 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

86/ 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

8.1x

3Y Median

17.7x

40 monthly readings · mean 166.3x · range 7.3x–873.4x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 54% below its 3y median of 17.7x. 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 72% below the peer median of 28.7x.

vs. its own history

Cheap

17.7x median over 40 months · -54%

vs. sector peers

Cheap

28.7x median of 4 peers · -72%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.1x

PEG

0.53

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 8.7% to 10.9% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 14.3% to 22.2%.
Return on capital is rising
ROCE has improved from 20.2% to 31.0%.
High return on capital employed
ROCE of 31.0% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Debt is increasingFinancial
Total debt is up 34% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.0% 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 8.7% to 10.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 54% 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 72% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 4.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 9%✓ 10.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.6x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 4.1% CAGR
Latest reported year was -5.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹35 Cr
Profit that never becomes cash eventually stops being profit.

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 · 4 neutral · 2 weak

Market Cap

₹470 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.1x

Cheap

Cheap against the generic band

P/B Ratio

1.62x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.01

Profitable

Profitable on a per-share basis

ROE

22.2%

Strong

Strong capital efficiency

ROCE

31.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.05x

Moderate

Moderate leverage

Revenue Growth (YoY)

-5.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-48.9%

Falling

Profits are shrinking

Dividend Yield

0.10%

Modest

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

Free Cash Flow

₹35 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

9.4%

Average

Average margins

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.48

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.53

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

48.9 / 52.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹886 Cr	₹535 Cr	₹719 Cr	₹1,001 Cr	+4.1%
EBITDA	₹77 Cr	-₹32 Cr	₹22 Cr	₹109 Cr	+12.3%
EBITDA Margin	8.7%	-6.0%	3.1%	10.9%	—
PAT (Net Profit)	₹42 Cr	-₹73 Cr	₹1 Cr	₹65 Cr	+15.3%
EPS	₹4.34	₹-7.27	₹0.14	₹6.66	+15.3%
ROE	14.3%	-33.3%	0.6%	22.2%	—
ROCE	20.2%	-17.1%	4.4%	31.0%	—
Total Debt	₹229 Cr	₹316 Cr	₹318 Cr	₹306 Cr	+10.2%
Free Cash Flow	-₹121 Cr	-₹67 Cr	₹39 Cr	₹35 Cr	—

🟢 Revenue has grown at 4.1% a year over 3 years.

🟢 EBITDA has grown at 12.3% a year over 3 years.

🟢 EBITDA Margin has risen from 8.7% to 10.9% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has grown at 15.3% a year over 3 years.

🟢 EPS has grown at 15.3% a year over 3 years.

🟢 ROE has risen from 14.3% to 22.2% over 3 years (+7.9 pts).

🟢 ROCE has risen from 20.2% to 31.0% over 3 years (+10.8 pts).

🔴 Total Debt has grown at 10.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹121 Cr to ₹35 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹682 Cr

Total Liabilities

₹391 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹44 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.1%

Corporate Actions

Dividend Rate

₹0.05

Ex-Dividend Date

14 Jul 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive2 mixed1 negative2 general

Khaitan Chemicals & Fertilizers Ltd. (KHAICHEM) Share Price Rises 10.63% as Stock Enters Top Gainers Today

Univest, 17 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Khaitan Chemicals & Fertilizers Ltd. Peer Comparison – Compare with Others

Value Research, 08 Oct

Khaitan Chemicals Q1 Net Profit Drops 49% To ₹10.9 Cr Amid Margin Compression

Sahi, 13 JulResults

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

The Market Doesn't Like What It Sees From Khaitan Chemicals and Fertilizers Limited's (NSE:KHAICHEM) Revenues Yet As Shares Tumble 26%

Simply Wall Street, 23 JanPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Khaitan Chemicals FY26 Results: Revenue Rises 39%, Q4 Revenue Up 20%

scanx.trade, 23 AprResults

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

Khaitan Chemicals & Fertilizers Ltd is Rated Strong Sell

MarketsMojo, 10 Oct

Watch Items

Revenue growth is negative (-5.7%) on the latest reported period — check if this is one-off or a trend.
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

StrongProfitability · Valuation

MiddlingBusiness Quality · Financial Health · Growth

WeakRisk

Points for each in the Score ↑

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 of 5 tripwires tripped — Debt / EBITDA stays below 2x · see Key things to watch ↑