Machhar Industries Limited

Basic Materials — Specialty Chemicals · BSE

₹391.00−₹18.50 (−4.52%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by 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. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:52 pm

Understanding the Business

Company site ↗

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

What does this company do?

Machhar Industries Limited manufactures and sells various grades of ammonium nitrate. The company's ammonium nitrate is used as a raw material in the manufacturing of industrial explosives.

IndustrySpecialty Chemicals

SectorBasic Materials

Annual revenue₹16 Cr

How does it make money?

Turns over ₹16 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 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?Little sign of one

Returns on capital of 9.5% 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 -9% while net margin moved +78% 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-9%

Margin effect+78%

DalalBaazaar Score

49/ 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

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

44/ 100

Expensive

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

46.3x

3Y Median

50.1x

40 monthly readings · mean 73.7x · range 10.2x–179.5x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 50.1x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 40.4x.

vs. its own history

Fair

50.1x median over 40 months · -8%

vs. sector peers

Fair

40.4x median of 4 peers · +15%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

20.1x

PEG

2.66

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 6.1% to 8.9% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 5.1% to 9.5%.
Very low debt
Debt/Equity of 0.25x leaves the balance sheet with plenty of headroom.
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

🔴Receivables growing faster than salesFinancial
Receivables up 92% against revenue up -9% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 562% against revenue up -9% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 39% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.1% to 8.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹1 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 92% against revenue up -9%. 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

1EBITDA margin holds above 7%✓ 8.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 9.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 6.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹29 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

46.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹8.45

Profitable

Profitable on a per-share basis

ROE

6.0%

Weak

Weak capital efficiency

ROCE

9.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.25x

Low

Conservative leverage

Revenue Growth (YoY)

-0.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

284.7%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.50

Comfortable

Healthy short-term liquidity

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

379.6 / 367.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹17 Cr	₹17 Cr	₹16 Cr	₹16 Cr	-3.2%
EBITDA	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+9.8%
EBITDA Margin	6.1%	7.7%	4.7%	8.9%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹0 Cr	₹1 Cr	+17.4%
EPS	₹4.87	₹8.38	₹2.05	₹7.87	+17.4%
ROE	3.2%	6.8%	1.7%	6.0%	—
ROCE	5.1%	9.6%	4.1%	9.5%	—
Total Debt	₹2 Cr	₹1 Cr	₹2 Cr	₹2 Cr	+11.5%
Free Cash Flow	-₹2 Cr	-₹1 Cr	-₹0 Cr	₹1 Cr	—

🔴 Revenue has shrunk at 3.2% a year over 3 years.

🟢 EBITDA has grown at 9.8% a year over 3 years.

🟢 EBITDA Margin has risen from 6.1% to 8.9% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has grown at 17.4% a year over 3 years.

🟢 EPS has grown at 17.4% a year over 3 years.

🟢 ROE has risen from 3.2% to 6.0% over 3 years (+2.9 pts).

🟢 ROCE has risen from 5.1% to 9.5% over 3 years (+4.4 pts).

🔴 Total Debt has grown at 11.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14 Cr

Total Liabilities

₹4 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

3.4%

Insider Holding

59.7%

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

Machhar Industries secures ₹41.97 lakh vehicle loan from HDFC Bank

scanx.trade, 13 Oct

Machhar Industries Limited Share Price

Upstox, 05 May

Machhar Industries Ltd. Peer Comparison – Compare with Others

Value Research, 08 Sept

Machhar Industries Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 31 Aug

Sunshine Capital reports consolidated net loss of Rs 0.06 crore in the March 2026 quarter

Business Standard, 25 MayResults

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

Q1 results 2026: Wipro to Jio Financial among companies to declare Q1 results today; full list here

Livemint, 16 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

Revenue growth is negative (-0.8%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingGrowth

WeakBusiness Quality · Profitability · Valuation · Risk

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

All 5 tripwires holding · see Key things to watch ↑