Nath Industries Limited

Basic Materials — Paper & Paper Products · BSE

₹50.50−₹1.24 (−2.40%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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, with modest growth. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Nath Industries Limited manufactures and sells industrial and specialty papers and industrial chemicals in India. It operates through two segments Paper and Industrial Chemicals.

IndustryPaper & Paper Products

SectorBasic Materials

Annual revenue₹491 Cr

How does it make money?

Turns over ₹491 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation.

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 5.8% 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.

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 +20% while net margin moved +108% 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+20%

Margin effect+108%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 2.6% is weak

Quality vs. Valuation

Company Quality

52/ 100

Average

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

Valuation

88/ 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

14.2x

3Y Median

45.8x

40 monthly readings · mean 105.5x · range 8.3x–335.2x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 69% below its 3y median of 45.8x. 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 50% below the peer median of 28.7x.

vs. its own history

Cheap

45.8x median over 40 months · -69%

vs. sector peers

Cheap

28.7x median of 4 peers · -50%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.5x

PEG

0.40

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 3.2% to 6.7% 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 1.6% to 5.8%.
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

1 item require attention · 1 high

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.9x — little room if earnings dip.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 3.2% to 6.7%. 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 69% 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 50% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹20 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?

Growth barely outpaces inflation
Revenue compounding at 6.3% 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.

🟡 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✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✗ 1.9x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 5% a year✓ 6.3% CAGR
Latest reported year was 36.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹20 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹96 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.2x

Cheap

Cheap against the generic band

P/B Ratio

0.37x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.55

Profitable

Profitable on a per-share basis

ROE

2.6%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.36x

Low

Conservative leverage

Revenue Growth (YoY)

36.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1.5%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹20 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

4.4%

Weak

Thin margins leave little room for error

Net Margin

1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

51.2 / 50.5

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

49.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹408 Cr	₹321 Cr	₹424 Cr	₹491 Cr	+6.3%
EBITDA	₹13 Cr	₹17 Cr	₹34 Cr	₹33 Cr	+36.3%
EBITDA Margin	3.2%	5.3%	8.1%	6.7%	—
PAT (Net Profit)	₹3 Cr	₹0 Cr	₹10 Cr	₹7 Cr	+35.7%
EPS	₹1.41	₹0.26	₹5.12	₹3.51	+35.5%
ROE	1.1%	0.2%	3.8%	2.6%	—
ROCE	1.6%	2.9%	7.3%	5.8%	—
Total Debt	₹90 Cr	₹106 Cr	₹94 Cr	₹93 Cr	+1.0%
Free Cash Flow	-₹48 Cr	-₹60 Cr	₹12 Cr	₹20 Cr	—

🟢 Revenue has grown at 6.3% a year over 3 years.

🟢 EBITDA has grown at 36.3% a year over 3 years.

🟢 EBITDA Margin has risen from 3.2% to 6.7% over 3 years (+3.5 pts).

🟢 PAT (Net Profit) has grown at 35.7% a year over 3 years.

🟢 EPS has grown at 35.5% a year over 3 years.

🟢 ROE has risen from 1.1% to 2.6% over 3 years (+1.5 pts).

🟢 ROCE has risen from 1.6% to 5.8% over 3 years (+4.3 pts).

🟡 Total Debt has been broadly flat over 3 years (1.0% a year).

🟢 Free Cash Flow has turned positive, from -₹48 Cr to ₹20 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹461 Cr

Total Liabilities

₹201 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.3%

Corporate Actions

Ex-Dividend Date

26 Sept 2011

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

1 negative5 general

Nath Industries shareholders approve FY26 accounts and director re-appointments

scanx.trade, 30 Sept

Nath Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 04 Sept

Nath Industries FY26 Results: Net profit falls 31% YoY to ₹667.7 lakh

scanx.trade, 04 SeptResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Nath Bio-Genes (India) Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Aaradhya Disposal Industries Ltd. Price Rise: 9.58% Gain

Univest, 28 Jul

Tapovan Paper and Board Mills Acquires 1,34,585 Nath Industries Shares Through Amalgamation Scheme

scanx.trade, 13 Jan

Watch Items

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

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingFinancial Health

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. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Interest cover stays above 3x · see Key things to watch ↑