N R Agarwal Industries Limited

Basic Materials — Paper & Paper Products · NSE

₹726.85−₹34.65 (−4.55%)

DalalBaazaar Score

35 / 100

🔴 Weak

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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

N R Agarwal Industries Limited manufactures and sells finished paper products in India.

IndustryPaper & Paper Products

SectorBasic Materials

Employees1,460

Annual revenue₹2,131 Cr

How does it make money?

Turns over ₹2,131 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 1,460 employees supports ₹1.46 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.46 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 7.7% 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 +22% while net margin moved -64% 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+22%

Margin effect-64%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 6.9% — barely ahead of inflation
✗ Profit has declined at 23.9% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

56/ 100

Fair

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

19.9x

3Y Median

8.1x

40 monthly readings · mean 19.0x · range 3.0x–46.7x

Sector Median

28.7x

median of 4 sector peers

⚠️Current valuation is approximately 147% above its 3y median of 8.1x. 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 31% below the peer median of 28.7x.

vs. its own history

Expensive

8.1x median over 40 months · +147%

vs. sector peers

Cheap

28.7x median of 4 peers · -31%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.4x

PEG

—

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 15.6% to 5.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.7% to 7.7% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 401% over 3 years, from ₹164 Cr to ₹821 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.
🔴Receivables growing faster than salesFinancial
Receivables up 79% against revenue up 22% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 96% against revenue up 22% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹199 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.7 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 31% 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 11.2% to 8.5%. 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 4.5x 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 79% against revenue up 22%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 147% 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.
Growth barely outpaces inflation
Revenue compounding at 6.9% 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.

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

1EBITDA margin holds above 6%✓ 8.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.5x
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✗ -₹199 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 5% a year✓ 6.9% CAGR
Latest reported year was 43.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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

3 good · 5 neutral · 3 weak

Market Cap

₹1,237 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.9x

Fair

Fairly valued against the generic band

P/B Ratio

1.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹36.5

Profitable

Profitable on a per-share basis

ROE

5.4%

Weak

Weak capital efficiency

ROCE

7.7%

Weak

Low return on total capital employed

Debt/Equity

1.01x

Moderate

Moderate leverage

Revenue Growth (YoY)

43.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

111.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.28%

Modest

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

Free Cash Flow

-₹199 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.7%

Average

Average margins

Net Margin

2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.10

Defensive

Steadier than the market

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

675.5 / 595.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

59.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,745 Cr	₹1,283 Cr	₹1,638 Cr	₹2,131 Cr	+6.9%
EBITDA	₹195 Cr	₹196 Cr	₹117 Cr	₹181 Cr	-2.4%
EBITDA Margin	11.2%	15.3%	7.2%	8.5%	—
PAT (Net Profit)	₹99 Cr	₹125 Cr	₹18 Cr	₹44 Cr	-23.9%
EPS	₹58.35	₹73.72	₹10.37	₹25.68	-23.9%
ROE	15.6%	16.5%	2.3%	5.4%	—
ROCE	17.7%	11.1%	5.7%	7.7%	—
Total Debt	₹164 Cr	₹579 Cr	₹644 Cr	₹821 Cr	+71.1%
Free Cash Flow	-₹65 Cr	-₹399 Cr	₹56 Cr	-₹199 Cr	—

🟢 Revenue has grown at 6.9% a year over 3 years.

🔴 EBITDA has shrunk at 2.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.2% to 8.5% over 3 years (-2.7 pts).

🔴 PAT (Net Profit) has shrunk at 23.9% a year over 3 years.

🔴 EPS has shrunk at 23.9% a year over 3 years.

🔴 ROE has fallen from 15.6% to 5.4% over 3 years (-10.3 pts).

🔴 ROCE has fallen from 17.7% to 7.7% over 3 years (-10.0 pts).

🔴 Total Debt has grown at 71.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,031 Cr

Total Liabilities

₹1,216 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹95 Cr

Capex

-₹294 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.6%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

25 Aug 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 positive2 mixed3 general

NR Agarwal Industries Ltd. Share Price and Fundamentals

Univest, 13 Oct

N R Agarwal Industries Convenes Board Meeting for Q1 FY27 Results Post Rating Reaffirmation

Sahi, 05 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

NR Agarwal Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 16 Sept

N R Agarwal Industries Ltd

Equitypandit, 28 Mar

N R Agarwal Industries Q1FY27 net profit jumps 111% on margin expansion

scanx.trade, 05 AugCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

NR Agarwal ₹1500 Cr Dahej Plant Upgrade Boosts Capacity; Land Use Revised

Whalesbook, 12 MayAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Watch Items

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

DalalBaazaar Thesis

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · 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. 4 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 ↑