Kronox Lab Sciences Limited

Basic Materials — Specialty Chemicals · NSE

₹210.00−₹8.18 (−3.75%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kronox Lab Sciences Limited manufactures and sells fine chemicals, inorganic chemicals, phosphates, and metallic chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Annual revenue₹101 Cr

How does it make money?

Turns over ₹101 Cr a year. Of every ₹100 of sales, about ₹27 reaches shareholders as profit, with ₹39 left at the operating level before interest, tax and depreciation.

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 31.9%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 23.8% 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 +6% while net margin moved +57% 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+6%

Margin effect+57%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 27.2x already prices in growth
• P/E is close to its own historical median of 25.8x
✗ P/B of 6.64x is a steep premium to book

Quality vs. Valuation

Company Quality

73/ 100

Good

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

Valuation

61/ 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

27.2x

3Y Median

25.8x

30 monthly readings · mean 26.0x · range 14.1x–36.6x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 25.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 33% below the peer median of 40.4x.

vs. its own history

Fair

25.8x median over 30 months · +5%

vs. sector peers

Cheap

40.4x median of 4 peers · -33%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.7x

PEG

1.47

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 24.7% to 38.9% over 3 years.
Cash generation is improving
Free cash flow is up 83% over 3 years.
High return on capital employed
ROCE of 31.9% 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 Attention2

Return on equity is falling
ROE has dropped from 37.2% to 23.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 49.6% to 31.9% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.9% 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 24.7% to 38.9%. 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 33% 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?

Growth barely outpaces inflation
Revenue compounding at 1.9% 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.
Returns on shareholder capital are falling
ROE has dropped from 37.2% to 23.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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 37%✓ 38.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.9% CAGR
Latest reported year was 16.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹21 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 29%✓ 31.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹779 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.2x

Fair

Fairly valued against the generic band

P/B Ratio

6.64x

Rich

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

EPS (TTM)

₹7.73

Profitable

Profitable on a per-share basis

ROE

23.8%

Strong

Strong capital efficiency

ROCE

31.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.38x

Moderate

Moderate leverage

Revenue Growth (YoY)

16.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

17.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.24%

Modest

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

Free Cash Flow

₹21 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

30.1%

Good

Healthy core-business profitability

Net Margin

27.2%

Good

Strong bottom-line conversion

Current Ratio

7.60

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.89

Market-like

Moves roughly in line with the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

203.0 / 186.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹96 Cr	₹90 Cr	₹100 Cr	₹101 Cr	+1.9%
EBITDA	₹24 Cr	₹30 Cr	₹36 Cr	₹39 Cr	+18.6%
EBITDA Margin	24.7%	33.3%	35.6%	38.9%	—
PAT (Net Profit)	₹17 Cr	₹21 Cr	₹25 Cr	₹28 Cr	+18.5%
EPS	₹4.48	₹5.75	₹6.9	₹7.5	+18.8%
ROE	37.2%	32.2%	28.3%	23.8%	—
ROCE	49.6%	43.1%	38.0%	31.9%	—
Free Cash Flow	₹11 Cr	₹5 Cr	₹28 Cr	₹21 Cr	+22.3%

🟡 Revenue has been broadly flat over 3 years (1.9% a year).

🟢 EBITDA has grown at 18.6% a year over 3 years.

🟢 EBITDA Margin has risen from 24.7% to 38.9% over 3 years (+14.2 pts).

🟢 PAT (Net Profit) has grown at 18.5% a year over 3 years.

🟢 EPS has grown at 18.8% a year over 3 years.

🔴 ROE has fallen from 37.2% to 23.8% over 3 years (-13.4 pts).

🔴 ROCE has fallen from 49.6% to 31.9% over 3 years (-17.7 pts).

🟢 Free Cash Flow has grown at 22.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹128 Cr

Total Liabilities

₹11 Cr

Total Debt

₹2 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹24 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

11.7%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

09 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

2 mixed4 general

Kronox Lab Sciences Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

Kronox Lab Sciences shares rally 32% in 2 days as Indo Borax, Zenrock Chemicals eye stake acquisition

The Economic Times, 21 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.

Kronox Lab Sciences approves Dahej SEZ plant acquisition to expand chemical manufacturing capacity

Dalal Street Investment Journal, 15 OctM&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.

Kronox Lab Sciences acquires 5000 sq meter plant in Dahej SEZ

scanx.trade, 14 Oct

Kronox Lab Sciences Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Compare with

Equitymaster, 15 Oct

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingRisk

WeakValuation

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. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑