NHC Foods Limited

Consumer Defensive — Packaged Foods · BSE

₹1.45−₹0.05 (−3.33%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by 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, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

NHC Foods Limited engages in the provision of whole and ground spices products in India and internationally.

IndustryPackaged Foods

SectorConsumer Defensive

Employees34

Annual revenue₹601 Cr

How does it make money?

Turns over ₹601 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 34 employees supports ₹17.69 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹17.69 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. 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 10.6% 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 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 +271% while net margin moved +82% 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+271%

Margin effect+82%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 6.6% is weak

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

84/ 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

3.9x

3Y Median

16.7x

40 monthly readings · mean 44.6x · range 2.2x–143.6x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 77% below its 3y median of 16.7x. 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 92% below the peer median of 51.7x.

vs. its own history

Cheap

16.7x median over 40 months · -77%

vs. sector peers

Cheap

51.7x median of 4 peers · -92%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.1x

PEG

0.04

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 15.7% to 10.6% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 87% over 3 years, from ₹28 Cr to ₹52 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 1170% against revenue up 271% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 70% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 77% 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 92% 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?

Sales are being booked faster than collected
Receivables are up 1170% against revenue up 271%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 41% a year✓ 54.8% CAGR
Latest reported year was 234.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹14 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.9x
How much operating profit can fall before interest stops being comfortably covered.

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

6 good · 3 neutral · 2 weak

Market Cap

₹137 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.9x

Cheap

Cheap against the generic band

P/B Ratio

0.47x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.37

Profitable

Profitable on a per-share basis

ROE

6.6%

Weak

Weak capital efficiency

ROCE

10.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

234.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

73.9%

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

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.3%

Average

Average margins

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

2.35

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.92

Market-like

Moves roughly in line with the market

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1.7 / 1.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

31.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹162 Cr	₹206 Cr	₹348 Cr	₹601 Cr	+54.8%
EBITDA	₹7 Cr	₹8 Cr	₹16 Cr	₹22 Cr	+49.8%
EBITDA Margin	4.0%	3.8%	4.7%	3.7%	—
PAT (Net Profit)	₹2 Cr	₹2 Cr	₹7 Cr	₹12 Cr	+89.0%
EPS	₹0.05	₹0.06	₹0.33	₹0.2	+64.1%
ROE	6.9%	8.5%	8.3%	6.6%	—
ROCE	15.7%	17.7%	16.7%	10.6%	—
Total Debt	₹28 Cr	₹37 Cr	₹33 Cr	₹52 Cr	+23.2%
Free Cash Flow	-₹2 Cr	-₹3 Cr	-₹38 Cr	-₹14 Cr	—

🟢 Revenue has grown at 54.8% a year over 3 years.

🟢 EBITDA has grown at 49.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.7% over 3 years.

🟢 PAT (Net Profit) has grown at 89.0% a year over 3 years.

🟢 EPS has grown at 64.1% a year over 3 years.

🟡 ROE has held roughly flat at 6.6% over 3 years.

🔴 ROCE has fallen from 15.7% to 10.6% over 3 years (-5.0 pts).

🔴 Total Debt has grown at 23.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹311 Cr

Total Liabilities

₹129 Cr

Cash & Equivalents

₹12 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹16 Cr

Shareholding (proxy)

Institutional Holding

13.2%

Insider Holding

16.0%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

2 positive4 general

NHC Foods Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 28 Aug

NHC Foods approves ₹53.76 cr warrant issue after 924% profit jump

scanx.trade, 20 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

NHC Foods: Fasten Your Seatbelt as Confident MD Joshi Increases Stake

Investing.com India, 26 Aug

NHC Foods Q1 Results FY27: Net Profit Surges 920.29%, Revenue Rs 369 crore

Univest, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

NHC Foods to Raise ₹53.7 Cr via Preferential Warrants Issue

HDFC Sky, 27 Aug

NHC Foods - 9 penny stocks surge up to 325% in 2026 so far; 3 turn multibaggers. Did you own any?

The Economic Times, 16 Aug

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑