MRC Agrotech Limited

Consumer Defensive — Farm Products · BSE

₹34.15+₹0.98 (+2.95%)

DalalBaazaar Score

48 / 100

🟡 Moderate

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, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

MRC Agrotech Limited engages in the cultivation, manufacturing, production, export, and sale of agriculture products in India. The company offers cinnamon, palmarosa, Ajwain, lemon grass, and peppermint essential oils, as well as lemon grass chunks and tea-cuts.

IndustryFarm Products

SectorConsumer Defensive

Annual revenue₹90 Cr

How does it make money?

Turns over ₹90 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation.

EBITDA margin2.8%

Net margin1.5%

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Little sign of one

Returns on capital of 3.8% 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.

ROCE3.8%

ROE2.5%

Peer median ROE51.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +1251% while net margin moved -71% 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+1251%

Margin effect-71%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 2.5% is weak

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

25/ 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

341.5x

3Y Median

41.7x

40 monthly readings · mean 54.4x · range 12.9x–119.9x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 718% above its 3y median of 41.7x. 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 689% above the peer median of 43.3x.

vs. its own history

Expensive

41.7x median over 40 months · +718%

vs. sector peers

Expensive

43.3x median of 4 peers · +689%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

341.5x

P/B

2.01x

EV/EBITDA

46.2x

PEG

6.01

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 7.1% to 2.8% over 3 years.
Debt is rising
Total debt is up 3066% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Valuation above its historical average
At 341.5x the stock trades 718% above its own median of 41.7x.

Red Flags

6 items require attention · 2 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 3066% over 3 years, from ₹0 Cr to ₹10 Cr.
🔴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.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 62.2x to 5.4x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹4 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 201% over 3 years — each existing share owns a smaller slice of the company.

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 7.1% to 2.8%. 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 3.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 718% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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

1Revenue growth stays above 104% a year✓ 138.2% CAGR
Latest reported year was 458.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 2.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.9x
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✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 3.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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 · 3 neutral · 4 weak

Market Cap

₹107 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

341.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.01x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.1

Profitable

Profitable on a per-share basis

ROE

2.5%

Weak

Weak capital efficiency

ROCE

3.8%

Weak

Low return on total capital employed

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

458.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

50.3%

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

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹34.15

Operating Margin

0.9%

Weak

Thin margins leave little room for error

Net Margin

1.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.10

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.13

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

33.4 / 31.4

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7 Cr	₹15 Cr	₹32 Cr	₹90 Cr	+138.2%
EBITDA	₹0 Cr	₹0 Cr	₹1 Cr	₹3 Cr	+74.7%
EBITDA Margin	7.1%	0.0%	4.2%	2.8%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+56.8%
EPS	₹0.33	₹0.86	₹0.43	₹0.42	+8.4%
ROE	2.7%	6.5%	2.8%	2.5%	—
ROCE	3.6%	8.6%	3.8%	3.8%	—
Total Debt	₹0 Cr	₹2 Cr	₹4 Cr	₹10 Cr	+216.3%
Free Cash Flow	-₹0 Cr	₹0 Cr	-₹3 Cr	-₹4 Cr	—

🟢 Revenue has grown at 138.2% a year over 3 years.

🟢 EBITDA has grown at 74.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.1% to 2.8% over 3 years (-4.3 pts).

🟢 PAT (Net Profit) has grown at 56.8% a year over 3 years.

🟢 EPS has grown at 8.4% a year over 3 years.

🟡 ROE has held roughly flat at 2.5% over 3 years.

🟡 ROCE has held roughly flat at 3.8% over 3 years.

🔴 Total Debt has grown at 216.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹115 Cr

Total Liabilities

₹60 Cr

Total Debt

₹10 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

1.5%

Insider Holding

46.0%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

6 general

MRC Agrotech Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

MRC Agrotech Ltd. Upper Circuit Streak: Day 3 Price and Data

Univest, 24 Sept

MRC Agrotech AGM resolutions pass with 100% majority

scanx.trade, 01 Oct

MRC Agrotech Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 27 Aug

MRC Agrotech reports FY26 revenue of ₹8,596.81 lakh

scanx.trade, 01 Jun

Sadhana Nitro Chem Ltd leads losers in 'B' group

Business Standard, 18 Feb

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate12/20

🟢GrowthStrong14.7/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding4.9/15

🔴RiskHigh4/10

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.

This thesis breaks if

✓Revenue growth stays above 104% a year138.2% CAGR
✓EBITDA margin holds above 1%2.8%
✗Debt / EBITDA falls below 3x3.9x
✗Free cash flow remains positive-₹4 Cr
✗ROCE stays above 8%3.8%