NACL Industries Limited

Basic Materials — Agricultural Inputs · NSE

₹129.01+₹0.41 (+0.32%)

DalalBaazaar Score

35 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

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, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

NACL Industries Limited manufactures and sells agrochemicals in India.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,294

Annual revenue₹1,573 Cr

How does it make money?

Turns over ₹1,573 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 1,294 employees supports ₹1.22 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.22 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 6.9% 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 -25% while net margin moved -94% 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-25%

Margin effect-94%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.1% a year
✗ Profit has declined at 63.6% a year
✗ Latest-year revenue growth of -14.5% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

34/ 100

Weak

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.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

258.0x

3Y Median

28.6x

40 monthly readings · mean 92.2x · range 11.7x–810.6x

Sector Median

28.7x

median of 4 sector peers

⚠️Current valuation is approximately 802% above its 3y median of 28.6x. 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 799% above the peer median of 28.7x.

vs. its own history

Expensive

28.6x median over 40 months · +802%

vs. sector peers

Expensive

28.7x median of 4 peers · +799%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

31.4x

PEG

6.99

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 57% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.5% to 0.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 20.6% to 6.9% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹134 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 95% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.7 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 57% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.5% to 6.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 802% 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.
Returns on shareholder capital are falling
ROE has dropped from 16.5% to 0.7%. 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.
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 5%✓ 6.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹134 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 6.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹3,022 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

258.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.42x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.5

Profitable

Profitable on a per-share basis

ROE

0.7%

Weak

Weak capital efficiency

ROCE

6.9%

Weak

Low return on total capital employed

Debt/Equity

0.46x

Low

Conservative leverage

Revenue Growth (YoY)

-14.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

36.9%

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

-₹134 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.5%

Average

Average margins

Net Margin

0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.27

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

134.2 / 154.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,097 Cr	₹1,756 Cr	₹1,213 Cr	₹1,573 Cr	-9.1%
EBITDA	₹198 Cr	₹17 Cr	-₹59 Cr	₹106 Cr	-18.8%
EBITDA Margin	9.5%	1.0%	-4.9%	6.7%	—
PAT (Net Profit)	₹95 Cr	-₹59 Cr	-₹92 Cr	₹5 Cr	-63.6%
EPS	₹4.38	₹-2.71	₹-4.27	₹0.21	-63.7%
ROE	16.5%	-11.5%	-21.6%	0.7%	—
ROCE	20.6%	-2.3%	-12.4%	6.9%	—
Total Debt	₹724 Cr	₹789 Cr	₹399 Cr	₹312 Cr	-24.5%
Free Cash Flow	-₹166 Cr	₹11 Cr	₹436 Cr	-₹134 Cr	—

🔴 Revenue has shrunk at 9.1% a year over 3 years.

🔴 EBITDA has shrunk at 18.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.5% to 6.7% over 3 years (-2.7 pts).

🔴 PAT (Net Profit) has shrunk at 63.6% a year over 3 years.

🔴 EPS has shrunk at 63.7% a year over 3 years.

🔴 ROE has fallen from 16.5% to 0.7% over 3 years (-15.9 pts).

🔴 ROCE has fallen from 20.6% to 6.9% over 3 years (-13.7 pts).

🟢 Total Debt has shrunk at 24.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,364 Cr

Total Liabilities

₹681 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹104 Cr

Capex

-₹30 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.2%

Corporate Actions

Ex-Dividend Date

08 Sept 2023

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 mixed4 general

NACL Industries Slips Below ₹149 as Stock Tests Key Support Zone - Factor Valuation

https://www.siam.in/, 17 Sept

NACL Industries vs Nifty 50: Share Price Performance Compared

Univest, 08 Oct

NACL Industries Share Price Falls 10% After Recent Rally

Kalkine India, 14 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

NACL Industries Ltd leads gainers in 'B' group

Business Standard, 30 Jun

NACL Industries confirms zero share encumbrance in FY26

scanx.trade, 08 Jul

NACL ESOS Share Allotment; Stock Gains 1.17%

HDFC Sky, 04 MayPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-14.5%) 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.

DalalBaazaar Thesis

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Valuation · Risk

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

4 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑