Kothari Petrochemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹122.80+₹4.02 (+3.38%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kothari Petrochemicals Limited manufactures and sells petrochemical products in India and internationally. The company offers polyisobutylene (PIB) products, such as KVIS 10, KVIS 20, KVIS 30, KVIS 100, KVIS 150, and KVIS 200.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees200

Annual revenue₹587 Cr

How does it make money?

Turns over ₹587 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 200 employees supports ₹2.94 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.94 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.

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 25.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.5% 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.

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 +23% while net margin moved +51% 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+23%

Margin effect+51%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.30 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

72/ 100

Good

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 good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

10.0x

3Y Median

15.3x

40 monthly readings · mean 15.8x · range 8.5x–26.7x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 3y median of 15.3x. 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 75% below the peer median of 40.4x.

vs. its own history

Cheap

15.3x median over 40 months · -34%

vs. sector peers

Cheap

40.4x median of 4 peers · -75%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.0x

PEG

0.44

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 12.8% to 17.4% over 3 years.
Debt is being paid down
Total debt is down 90% over 3 years.
Cash generation is improving
Free cash flow is up 207% over 3 years.
High return on capital employed
ROCE of 25.0% 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

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.0% 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 12.8% to 17.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 90% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 34% 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 75% 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 7.0% 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.
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 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 7.0% CAGR
Latest reported year was -8.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹81 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 22%✓ 25.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

₹723 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.0x

Cheap

Cheap against the generic band

P/B Ratio

1.94x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹12.23

Profitable

Profitable on a per-share basis

ROE

19.5%

Strong

Strong capital efficiency

ROCE

25.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.60x

Moderate

Moderate leverage

Revenue Growth (YoY)

-8.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-3.3%

Falling

Profits are shrinking

Dividend Yield

1.63%

Modest

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

Free Cash Flow

₹81 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

13.5%

Average

Average margins

Net Margin

12.5%

Good

Strong bottom-line conversion

Current Ratio

2.48

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

46%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

127.3 / 133.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹479 Cr	₹592 Cr	₹574 Cr	₹587 Cr	+7.0%
EBITDA	₹61 Cr	₹100 Cr	₹86 Cr	₹102 Cr	+18.5%
EBITDA Margin	12.8%	16.9%	14.9%	17.4%	—
PAT (Net Profit)	₹39 Cr	₹64 Cr	₹66 Cr	₹72 Cr	+22.8%
EPS	₹6.66	₹10.84	₹11.18	₹12.32	+22.8%
ROE	20.4%	25.9%	21.5%	19.5%	—
ROCE	26.0%	36.2%	25.7%	25.0%	—
Total Debt	₹23 Cr	—	₹3 Cr	₹2 Cr	-53.9%
Free Cash Flow	₹26 Cr	₹72 Cr	₹59 Cr	₹81 Cr	+45.4%

🟢 Revenue has grown at 7.0% a year over 3 years.

🟢 EBITDA has grown at 18.5% a year over 3 years.

🟢 EBITDA Margin has risen from 12.8% to 17.4% over 3 years (+4.6 pts).

🟢 PAT (Net Profit) has grown at 22.8% a year over 3 years.

🟢 EPS has grown at 22.8% a year over 3 years.

🟡 ROE has held roughly flat at 19.5% over 3 years.

🟡 ROCE has held roughly flat at 25.0% over 3 years.

🟢 Total Debt has shrunk at 53.9% a year over 3 years.

🟢 Free Cash Flow has grown at 45.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹442 Cr

Total Liabilities

₹70 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹81 Cr

Capex

—

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

11 May 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

3 mixed3 general

Kothari Petrochemicals Share Price

Upstox, 16 Oct

Kothari Petrochemicals Restores 100% Raw Material Supply Following Removal Of Government Refinery Restrictions

Sahi, 02 Jul

Kothari Petrochemicals (KOTHARIPET.NS) Slips 2.01% to ₹130.84, Testing Lower End of Recent Range - Post-Earnings Moves

siam.in, 28 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Kothari Petrochemicals vs Nifty 50: Returns Compared

Univest, 01 Oct

Kothari Petrochemicals approves merger with Kothari Sugars

scanx.trade, 19 MayM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Kothari Sugars and Chemicals gets NSE no objection for merger with Kothari Petrochemicals

ChiniMandi, 20 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Watch Items

Revenue growth is negative (-8.8%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingGrowth · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 5 tripwires holding · see Key things to watch ↑