Mahickra Chemicals Limited

Sector n/a · NSE

₹108.85+₹1.55 (+1.44%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by 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, 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, 8:28 pm

Understanding the Business

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

How does it make money?

Turns over ₹105 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 12.2% 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.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +2% while net margin moved +54% 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+2%

Margin effect+54%

DalalBaazaar Score

48/ 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

60/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

12.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 5.6% to 8.1% over 3 years.
Very low debt
Debt/Equity of 0.24x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 15.6% to 12.2% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 57% over 3 years, from ₹10 Cr to ₹16 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.
🔴Inventory building faster than salesFinancial
Inventory up 93% against revenue up 2% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 20% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 5.6% to 8.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 0.7% 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.
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

1EBITDA margin holds above 6%✓ 8.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 0.7% CAGR
Latest reported year was 19.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹106 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

7.7%

Weak

Weak capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.24x

Low

Conservative leverage

Revenue Growth (YoY)

19.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

103.5%

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

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

12.5%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

4.9%

Average

Average bottom-line conversion

Current Ratio

3.06

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

292.1 / 289.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

32.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹103 Cr	₹72 Cr	₹88 Cr	₹105 Cr	+0.7%
EBITDA	₹6 Cr	₹6 Cr	₹5 Cr	₹9 Cr	+13.8%
EBITDA Margin	5.6%	8.0%	5.6%	8.1%	—
PAT (Net Profit)	₹3 Cr	₹1 Cr	₹3 Cr	₹5 Cr	+16.2%
EPS	₹4.05	₹1.32	₹3.12	—	—
ROE	10.1%	3.2%	7.1%	7.7%	—
ROCE	15.6%	7.1%	12.9%	12.2%	—
Total Debt	₹10 Cr	₹13 Cr	₹15 Cr	₹16 Cr	+16.2%
Free Cash Flow	₹1 Cr	-₹2 Cr	-₹0 Cr	-₹8 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.7% a year).

🟢 EBITDA has grown at 13.8% a year over 3 years.

🟢 EBITDA Margin has risen from 5.6% to 8.1% over 3 years (+2.5 pts).

🟢 PAT (Net Profit) has grown at 16.2% a year over 3 years.

🔴 ROE has fallen from 10.1% to 7.7% over 3 years (-2.4 pts).

🔴 ROCE has fallen from 15.6% to 12.2% over 3 years (-3.3 pts).

🔴 Total Debt has grown at 16.2% a year over 3 years.

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

Balance Sheet & Cash Flow — FY2026

Total Assets

₹97 Cr

Total Liabilities

₹30 Cr

Cash & Equivalents

₹16 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹0 Cr

Recent News

1 positive5 general

Is Now The Time To Put Mahickra Chemicals (NSE:MAHICKRA) On Your Watchlist?

Simply Wall Street, 01 Jul

Mahickra Chemicals Share Price news: price action update

Univest, 28 Aug

Mahickra Chemicals Ltd. Share Price: Price and Valuation

Univest, 13 Aug

Here's Why We Think Shree Pushkar Chemicals & Fertilisers (NSE:SHREEPUSHK) Might Deserve Your Attention Today

Simply Wall Street, 19 Jun

Dividend alert! Last date to buy RIL, HDFC AMC and 14 other stocks for dividend rewards. Do you own any?

The Economic Times, 04 JunCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

HOCL Stock Price and Chart — BSE:HOCL

TradingView, 28 Dec

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingValuation

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

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑