Mangalam Organics Limited

Basic Materials — Specialty Chemicals · NSE

₹440.00+₹7.75 (+1.79%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, though profits are falling even as sales grow. 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

Company site ↗

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

What does this company do?

Mangalam Organics Limited, together with its subsidiaries, manufactures and sells chemicals for the industrial and consumer markets in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees347

Annual revenue₹623 Cr

How does it make money?

Turns over ₹623 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 347 employees supports ₹1.79 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.79 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?Some evidence

ROCE of 15.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +26% while net margin moved -175% 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+26%

Margin effect-175%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.13x is on the heavy side
• Current ratio of 1.14 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 2.2x — little room if profits dip
✗ Debt has grown 23.5% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

83/ 100

Cheap

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

18.7x

2Y Median

37.9x

28 monthly readings · mean 55.5x · range 14.8x–113.1x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 51% below its 2y median of 37.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 54% below the peer median of 40.4x.

vs. its own history

Cheap

37.9x median over 28 months · -51%

vs. sector peers

Cheap

40.4x median of 4 peers · -54%

vs. generic bands

Fair

15x–35x

EV/EBITDA

7.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -0.7% to 16.9% over 3 years.
Return on equity is rising
ROE has improved from -9.9% to 8.1%.
Return on capital is rising
ROCE has improved from -6.5% to 15.7%.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 89% over 3 years, from ₹190 Cr to ₹359 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹63 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 58% against revenue up 26% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -0.7% to 16.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 51% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 54% 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 3.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 15%✓ 16.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.4x
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✗ -₹63 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 8.1% CAGR
Latest reported year was 22.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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

4 good · 5 neutral · 2 weak

Market Cap

₹377 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.7x

Fair

Fairly valued against the generic band

P/B Ratio

1.26x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹23.5

Profitable

Profitable on a per-share basis

ROE

8.1%

Moderate

Moderate capital efficiency

ROCE

15.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.13x

Moderate

Moderate leverage

Revenue Growth (YoY)

22.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-40.5%

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

-₹63 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.0%

Average

Average margins

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

1.14

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.57

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

442.0 / 459.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹493 Cr	₹494 Cr	₹530 Cr	₹623 Cr	+8.1%
EBITDA	-₹3 Cr	₹39 Cr	₹58 Cr	₹105 Cr	—
EBITDA Margin	-0.7%	7.9%	10.9%	16.9%	—
PAT (Net Profit)	-₹27 Cr	₹4 Cr	₹13 Cr	₹26 Cr	—
EPS	₹-31.79	₹5.14	₹14.6	₹29.64	—
ROE	-9.9%	1.6%	4.3%	8.1%	—
ROCE	-6.5%	6.3%	11.2%	15.7%	—
Total Debt	₹190 Cr	₹173 Cr	₹272 Cr	₹359 Cr	+23.5%
Free Cash Flow	₹36 Cr	₹33 Cr	-₹75 Cr	-₹63 Cr	—

🟢 Revenue has grown at 8.1% a year over 3 years.

🟢 EBITDA has turned positive, from -₹3 Cr to ₹105 Cr.

🟢 EBITDA Margin has risen from -0.7% to 16.9% over 3 years (+17.5 pts).

🟢 PAT (Net Profit) has turned positive, from -₹27 Cr to ₹26 Cr.

🟢 EPS has turned positive, from ₹-31.79 to ₹29.64.

🟢 ROE has risen from -9.9% to 8.1% over 3 years (+18.0 pts).

🟢 ROCE has risen from -6.5% to 15.7% over 3 years (+22.2 pts).

🔴 Total Debt has grown at 23.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹36 Cr to -₹63 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹740 Cr

Total Liabilities

₹421 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹63 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.6%

Corporate Actions

Ex-Dividend Date

20 Sept 2022

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 negative5 general

Mangalam Organics (MANORG) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Mangalam Organics vs Nifty 50: Share Price Performance Compared

Univest, 06 Oct

Mangalam Organics Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Does Mangalam Organics (NSE:MANORG) Deserve A Spot On Your Watchlist?

Simply Wall Street, 05 May

Mangalam Organics promoter pledges 11.36 lakh shares for subsidiary loan

scanx.trade, 25 SeptOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Momentum Stocks: Phoenix Mills, Mangalam Organics, Viceroy Hotels under pressure; Nestle at new high

Moneycontrol.com, 29 Jul

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingProfitability

WeakFinancial Health · 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. 1 high-severity red flag sits 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 ↑