L.K. Mehta Polymers Limited

Basic Materials — Specialty Chemicals · BSE

₹41.45−₹0.05 (−0.12%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently 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 L.K. Mehta Polymers Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

L.K. Mehta Polymers Limited engages in the manufacturing and trading of plastic products in India. The company offers various ropes and twines, including monofilament ropes, danline ropes, tape ropes, baler twines, and packaging twine.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees14

Annual revenue₹29 Cr

How does it make money?

Turns over ₹29 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 14 employees supports ₹2.09 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.09 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?Little sign of one

Returns on capital of 11.6% 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.

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 +74% while net margin moved -4830% 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+74%

Margin effect-4830%

DalalBaazaar Score

50/ 100

Moderate

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

51/ 100

Average

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

Valuation

65/ 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

25.4x

2Y Median

21.9x

22 monthly readings · mean 25.1x · range 18.4x–38.1x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 16% above its 2y median of 21.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 37% below the peer median of 40.4x.

vs. its own history

Fair

21.9x median over 22 months · +16%

vs. sector peers

Cheap

40.4x median of 4 peers · -37%

vs. generic bands

Fair

15x–35x

EV/EBITDA

15.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 3.1% to 5.7% over 3 years.
Return on equity is rising
ROE has improved from -0.4% to 5.4%.
Return on capital is rising
ROCE has improved from 8.6% to 11.6%.

🔴 What Needs Attention0

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

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 163% over 3 years, from ₹4 Cr to ₹10 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 491% against revenue up 74% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 105% against revenue up 74% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 3.1% to 5.7%. 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 37% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 6.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 491% against revenue up 74%. 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
4 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 15% a year✓ 20.3% CAGR
Latest reported year was -2.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 6.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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 · 5 neutral · 4 weak

Market Cap

₹16 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

25.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.38x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.63

Profitable

Profitable on a per-share basis

ROE

5.6%

Weak

Weak capital efficiency

ROCE

11.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

-2.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-26.1%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

3.8%

Average

Average asset productivity

Operating Margin

5.1%

Average

Average margins

Net Margin

2.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.31

Comfortable

Healthy short-term liquidity

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

40.7 / 39.2

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

92.3

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹17 Cr	₹19 Cr	₹19 Cr	₹29 Cr	+20.3%
EBITDA	₹1 Cr	₹2 Cr	₹2 Cr	₹2 Cr	+47.9%
EBITDA Margin	3.1%	9.1%	8.2%	5.7%	—
PAT (Net Profit)	-₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	—
EPS	₹-0.02	₹1.52	₹2.08	—	—
ROE	-0.4%	17.6%	5.5%	5.4%	—
ROCE	8.6%	30.0%	11.2%	11.6%	—
Total Debt	₹4 Cr	₹6 Cr	₹6 Cr	₹10 Cr	+38.0%
Free Cash Flow	₹1 Cr	-₹3 Cr	-₹2 Cr	-₹8 Cr	—

🟢 Revenue has grown at 20.3% a year over 3 years.

🟢 EBITDA has grown at 47.9% a year over 3 years.

🟢 EBITDA Margin has risen from 3.1% to 5.7% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹1 Cr.

🟢 ROE has risen from -0.4% to 5.4% over 3 years (+5.8 pts).

🟢 ROCE has risen from 8.6% to 11.6% over 3 years (+3.0 pts).

🔴 Total Debt has grown at 38.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹8 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹22 Cr

Total Liabilities

₹11 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.0%

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

1 positive5 general

L.K.MEHTA POLYMERS LIMITED Share Price

Upstox, 09 Oct

Upcoming IPOs: Nine public issues, six listings scheduled for next week; check full list here

Livemint, 09 Feb

Shakti Polytarp IPO Guide Price, Date, GMP, Subscription & Review

IndiaIPO, 08 Jan

BHAVIK ENTERPRISES LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 15 Oct

Gokaldas Exports surges 9% on robust near-term prospects, strong order book

Business Standard, 18 FebOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Upcoming IPOs This Week – 3 IPO open for Investment and 11 IPOs Scheduled for Listing

IPO Watch, 20 Feb

Watch Items

Revenue growth is negative (-2.1%) 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 overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability · Valuation

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. 4 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑