Laxmi Organic Industries Limited

Basic Materials — Specialty Chemicals · NSE

₹179.00+₹2.68 (+1.52%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Laxmi Organic Industries Limited, together with its subsidiaries, manufactures and trades acetyl intermediates and specialty chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees1,141

Annual revenue₹2,771 Cr

How does it make money?

Turns over ₹2,771 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 1,141 employees supports ₹2.43 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.43 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 4.4% 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 is the outlook?

2 analysts covering the stock expect revenue to grow about 41.0% and earnings to grow about 19.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+41.0%

Est. earnings growth+19.2%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -1% 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-1%

Margin effect-36%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.2% a year
✗ Profit has declined at 14.0% a year

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

37/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

59.9x

3Y Median

51.3x

40 monthly readings · mean 50.3x · range 26.6x–67.2x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 17% above its 3y median of 51.3x. 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 48% above the peer median of 40.4x.

vs. its own history

Fair

51.3x median over 40 months · +17%

vs. sector peers

Expensive

40.4x median of 4 peers · +48%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

30.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 8.8% to 4.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.6% to 4.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 5 watch

🟡Debt is increasingFinancial
Total debt is up 34% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.9x to 5.0x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹428 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 36% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.7 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 9.1% to 6.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 48% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 8.8% to 4.0%. 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 4%✓ 6.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹428 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 4.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 5.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 12 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
✗ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹4,975 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

59.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.50x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.99

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

39.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

221.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.17%

Modest

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

Free Cash Flow

-₹428 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

23.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.6%

Average

Average margins

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

1.36

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.35

Defensive

Steadier than the market

52W Range Position

71%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

180.9 / 176.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

48.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,787 Cr	₹2,836 Cr	₹2,977 Cr	₹2,771 Cr	-0.2%
EBITDA	₹254 Cr	₹264 Cr	₹301 Cr	₹179 Cr	-11.1%
EBITDA Margin	9.1%	9.3%	10.1%	6.5%	—
PAT (Net Profit)	₹125 Cr	₹121 Cr	₹114 Cr	₹79 Cr	-14.0%
EPS	₹4.67	₹4.43	₹4.07	₹2.86	-15.1%
ROE	8.8%	6.7%	6.0%	4.0%	—
ROCE	11.6%	9.1%	9.1%	4.4%	—
Total Debt	₹406 Cr	₹143 Cr	₹258 Cr	₹543 Cr	+10.2%
Free Cash Flow	-₹277 Cr	₹314 Cr	-₹286 Cr	-₹428 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.2% a year).

🔴 EBITDA has shrunk at 11.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.1% to 6.5% over 3 years (-2.7 pts).

🔴 PAT (Net Profit) has shrunk at 14.0% a year over 3 years.

🔴 EPS has shrunk at 15.1% a year over 3 years.

🔴 ROE has fallen from 8.8% to 4.0% over 3 years (-4.8 pts).

🔴 ROCE has fallen from 11.6% to 4.4% over 3 years (-7.3 pts).

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

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,446 Cr

Total Liabilities

₹1,460 Cr

Cash & Equivalents

₹60 Cr

Operating Cash Flow

₹175 Cr

Capex

-₹602 Cr

Shareholding (proxy)

Institutional Holding

3.7%

Insider Holding

69.2%

Corporate Actions

Dividend Rate

₹0.3

Ex-Dividend Date

21 Jul 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 2 Sell

Target Price (Mean)

₹176

-1.7% vs CMP

Target Range

₹150 – ₹201

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 positive2 mixed1 negative2 general

Laxmi Organic Industries Share Price News and Valuation

Univest, 06 Oct

Reduce Laxmi Organic Industries; target of Rs 169: Prabhudas Lilladher

Moneycontrol.com, 31 Jul

Earnings call transcript: Laxmi Organic posts strong q1 2027 growth, shares fall 8%

Investing.com, 30 JulPrice 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.

Laxmi Organic Industries Ltd Downgraded to Hold Amid Mixed Financial and Technical Signals

MarketsMojo, 16 OctAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Laxmi Organic Industries Q1FY27 revenue rises 40%, EBITDA surges 272%

scanx.trade, 30 JulResults

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

Laxmi Organic Industries Q1 Consolidated Net Profit at ₹67.7 Cr vs ₹21.4 Cr YoY

Sahi, 30 JulResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑