Knack Packaging Limited

Consumer Cyclical — Packaging & Containers · NSE

₹207.10−₹0.24 (−0.12%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, 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, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Knack Packaging Limited operates as a packaging solutions provider. The company manufactures Printed and Laminated Woven Polypropylene (PLWPP) bags and PLWPP Pinch Bottom bags.

IndustryPackaging & Containers

SectorConsumer Cyclical

Annual revenue₹816 Cr

How does it make money?

Turns over ₹816 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 38.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 30.1% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +58% while net margin moved +194% 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+58%

Margin effect+194%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

79/ 100

Good

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

Valuation

66/ 100

Fair

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

24.7x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 64% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -64%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.1x

PEG

0.37

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 10.5% to 20.8% over 3 years.
Return on equity is rising
ROE has improved from 20.8% to 30.1%.
Return on capital is rising
ROCE has improved from 23.2% to 38.3%.
High return on capital employed
ROCE of 38.3% 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 Attention0

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

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 53% over 3 years, from ₹135 Cr to ₹206 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 117% against revenue up 58% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 38.3% 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 10.5% to 20.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 64% 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?

Sales are being booked faster than collected
Receivables are up 117% against revenue up 58%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
2 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 12% a year✓ 16.6% CAGR
Latest reported year was 41.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 35%✓ 38.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

₹2,534 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.7x

Fair

Fairly valued against the generic band

P/B Ratio

6.72x

Rich

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

EPS (TTM)

₹8.39

Profitable

Profitable on a per-share basis

ROE

30.1%

Strong

Strong capital efficiency

ROCE

38.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.67x

Moderate

Moderate leverage

Revenue Growth (YoY)

41.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

48.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

17.9%

Good

Healthy core-business profitability

Net Margin

11.4%

Good

Strong bottom-line conversion

Current Ratio

1.30

Comfortable

Healthy short-term liquidity

52W Range Position

71%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

193.5 / 194.7

Bearish alignment (short < long)

RSI (14)

65.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹515 Cr	₹651 Cr	₹728 Cr	₹816 Cr	+16.6%
EBITDA	₹54 Cr	₹101 Cr	₹142 Cr	₹170 Cr	+46.6%
EBITDA Margin	10.5%	15.5%	19.5%	20.8%	—
PAT (Net Profit)	₹20 Cr	₹46 Cr	₹74 Cr	₹93 Cr	+67.1%
EPS	₹1.62	₹3.76	₹6.03	—	—
ROE	20.8%	32.7%	34.4%	30.1%	—
ROCE	23.2%	35.9%	41.0%	38.3%	—
Total Debt	₹135 Cr	₹190 Cr	₹188 Cr	₹206 Cr	+15.1%
Free Cash Flow	-₹10 Cr	-₹37 Cr	₹36 Cr	-₹11 Cr	—

🟢 Revenue has grown at 16.6% a year over 3 years.

🟢 EBITDA has grown at 46.6% a year over 3 years.

🟢 EBITDA Margin has risen from 10.5% to 20.8% over 3 years (+10.3 pts).

🟢 PAT (Net Profit) has grown at 67.1% a year over 3 years.

🟢 ROE has risen from 20.8% to 30.1% over 3 years (+9.2 pts).

🟢 ROCE has risen from 23.2% to 38.3% over 3 years (+15.1 pts).

🔴 Total Debt has grown at 15.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹595 Cr

Total Liabilities

₹287 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹92 Cr

Capex

-₹103 Cr

Shareholding (proxy)

Institutional Holding

5.8%

Insider Holding

78.9%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 mixed5 general

Knack Packaging Ltd. IPO Review - Knack Packaging Ltd. IPO Dates, Issue Price, Subscription and Allotment Status

The Economic Times, 13 Oct

Knack Packaging Ltd | Stock Share Price Live

MarketSmith India, 11 Jul

Knack Packaging SMP Rahul Adesara resigns effective Oct 17

scanx.trade, 17 Oct

Knack Packaging IPO to Open on July 1, 2026: Price Band, Issue Size, Timeline & Key Details

Groww, 01 Jul

Knack Packaging shares end with over 7% listing gains

BusinessLine, 08 JulPrice 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.

Knack Packaging shares list at 10% premium; should investors book profit?

Business Standard, 08 Jul

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑