National Fertilizers Limited

Basic Materials — Agricultural Inputs · NSE

₹62.92+₹0.34 (+0.54%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, 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, 7:44 pm

Understanding the Business

Company site ↗

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

What does this company do?

National Fertilizers Limited engages in the production and marketing of neem coated urea, bio-fertilizers, and other allied Industrial products in India. It operates through Manufactured Fertilizers, Manufactured Chemicals, Traded Imported Fertilizers, and Others segments.

IndustryAgricultural Inputs

SectorBasic Materials

Employees2,612

Annual revenue₹6,233 Cr

How does it make money?

Turns over ₹6,233 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 2,612 employees supports ₹2.39 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.39 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 12.0% 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 -12% while net margin moved -47% 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-12%

Margin effect-47%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.3% a year
✗ Profit has declined at 22.7% a year

Quality vs. Valuation

Company Quality

31/ 100

Weak

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.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

8.5x

3Y Median

20.6x

40 monthly readings · mean 21.5x · range 7.3x–45.3x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 59% below its 3y median of 20.6x. 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 71% below the peer median of 28.7x.

vs. its own history

Cheap

20.6x median over 40 months · -59%

vs. sector peers

Cheap

28.7x median of 4 peers · -71%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.7x

PEG

0.57

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 18.1% to 7.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.9% to 12.0% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.9 points, from 20.5% to 14.5%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,570 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 54% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 31% against revenue up -12% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 59% 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 71% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 20.5% to 14.5%. 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 4.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 31% against revenue up -12%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 18.1% to 7.4%. 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.
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 13%✓ 14.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.4x
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✗ -₹1,570 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.1x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 9%✓ 12.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 4 neutral · 2 weak

Market Cap

₹3,087 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.5x

Cheap

Cheap against the generic band

P/B Ratio

1.09x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹7.43

Profitable

Profitable on a per-share basis

ROE

7.4%

Weak

Weak capital efficiency

ROCE

12.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.40x

Moderate

Moderate leverage

Revenue Growth (YoY)

27.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.65%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,570 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.6%

Weak

Thin margins leave little room for error

Net Margin

1.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.01

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

64.5 / 68.1

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	₹7,117 Cr	₹7,548 Cr	₹5,896 Cr	₹6,233 Cr	-4.3%
EBITDA	₹1,457 Cr	₹706 Cr	₹778 Cr	₹906 Cr	-14.6%
EBITDA Margin	20.5%	9.4%	13.2%	14.5%	—
PAT (Net Profit)	₹458 Cr	₹150 Cr	₹184 Cr	₹211 Cr	-22.7%
EPS	₹9.34	₹3.06	₹3.75	₹4.31	-22.7%
ROE	18.1%	5.9%	6.8%	7.4%	—
ROCE	17.9%	10.0%	9.9%	12.0%	—
Total Debt	₹3,993 Cr	₹4,091 Cr	₹2,001 Cr	₹3,964 Cr	-0.2%
Free Cash Flow	-₹541 Cr	₹376 Cr	₹2,389 Cr	-₹1,570 Cr	—

🔴 Revenue has shrunk at 4.3% a year over 3 years.

🔴 EBITDA has shrunk at 14.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.5% to 14.5% over 3 years (-5.9 pts).

🔴 PAT (Net Profit) has shrunk at 22.7% a year over 3 years.

🔴 EPS has shrunk at 22.7% a year over 3 years.

🔴 ROE has fallen from 18.1% to 7.4% over 3 years (-10.7 pts).

🔴 ROCE has fallen from 17.9% to 12.0% over 3 years (-5.8 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.2% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,724 Cr

Total Liabilities

₹8,883 Cr

Cash & Equivalents

₹54 Cr

Operating Cash Flow

-₹1,342 Cr

Capex

-₹228 Cr

Shareholding (proxy)

Institutional Holding

4.2%

Insider Holding

74.7%

Corporate Actions

Dividend Rate

₹1.04

Ex-Dividend Date

11 Sept 2026

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 mixed5 general

National Fertilizers Share Price - Live NSE: NFL Stock Price & Chart

Upstox, 16 Oct

National Fertilizers Ltd. 52 Week Low Streak: What It Means

Univest, 13 Oct

National Fertilizers (NFL.NS) Slips 1.45% to ₹63.97 as Stock Drifts Toward Lower Support - Value Area Low

https://www.siam.in/, 07 Oct

National Fertilizers Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 08 Oct

National Fertilizers posts 124% jump in FY26 profit to ₹232.67 crore

scanx.trade, 01 Oct

National Fertilizers Share Price Target 2027: Base and Bull Case

Univest, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality

WeakFinancial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 2 high-severity red flags sit 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 ↑