Organic Coatings Limited

Basic Materials — Specialty Chemicals · BSE

₹24.00−₹0.61 (−2.48%)

DalalBaazaar Score

28 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company is currently losing money, though profits are falling even as sales grow. Debt is 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 Organic Coatings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Organic Coatings Limited manufactures, sells, and trades in printing inks and allied products in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees67

Annual revenue₹26 Cr

How does it make money?

Turns over ₹26 Cr a year. Of every ₹100 of sales, about ₹-12 reaches shareholders as profit, with ₹-6 left at the operating level before interest, tax and depreciation. Each of its 67 employees supports ₹39.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹39.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL 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 -57.6% 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 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 +21% while net margin moved +184% 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+21%

Margin effect+184%

DalalBaazaar Score

28/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 14236.6 points over the period

Quality vs. Valuation

Company Quality

29/ 100

Weak

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

Valuation

21/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 15% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from -56.4% to -14293.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 5.6% to -57.6% — often a sign of competition or overexpansion.

Red Flags

9 items require attention · 4 high · 5 watch

🔴High leverageFinancial
Debt/Equity of 447.55x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only -3.9x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 12.3 points, from 6.7% to -5.6%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -0.9x to -3.9x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 77% against revenue up 21% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 30% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 15% 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 6.7% to -5.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 447.55x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 6.5% 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.
Returns on shareholder capital are falling
ROE has dropped from -56.4% to -14293.0%. 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.

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

1EBITDA margin holds above -8%✓ -5.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -3.9x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 5% a year✓ 6.5% CAGR
Latest reported year was 58.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✗ -57.6%
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

1 good · 2 neutral · 8 weak

Market Cap

₹24 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1043.48x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹-2.23

Loss-making

Negative earnings per share — the business is losing money

ROE

-14293.0%

Weak

Weak capital efficiency

ROCE

-57.6%

Weak

Low return on total capital employed

Debt/Equity

447.55x

High

High leverage

Revenue Growth (YoY)

58.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-55.0%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-1.7%

Weak

Thin margins leave little room for error

Net Margin

-8.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.74

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.27

Defensive

Steadier than the market

52W Range Position

61%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

20.8 / 18.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

72.5

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹22 Cr	₹23 Cr	₹27 Cr	₹26 Cr	+6.5%
EBITDA	₹1 Cr	₹2 Cr	-₹0 Cr	-₹1 Cr	—
EBITDA Margin	6.7%	7.9%	-0.5%	-5.6%	—
PAT (Net Profit)	-₹1 Cr	-₹0 Cr	-₹2 Cr	-₹3 Cr	—
EPS	₹-1.24	₹-0.62	₹-2.11	₹-3.27	—
ROE	-56.4%	-39.7%	-63.9%	-14293.0%	—
ROCE	5.6%	13.0%	-12.2%	-57.6%	—
Total Debt	₹12 Cr	₹11 Cr	₹8 Cr	₹10 Cr	-5.4%
Free Cash Flow	₹2 Cr	₹3 Cr	₹0 Cr	-₹1 Cr	—

🟢 Revenue has grown at 6.5% a year over 3 years.

🔴 EBITDA has turned negative, from ₹1 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 6.7% to -5.6% over 3 years (-12.3 pts).

🔴 ROE has fallen from -56.4% to -14293.0% over 3 years (-14236.6 pts).

🔴 ROCE has fallen from 5.6% to -57.6% over 3 years (-63.3 pts).

🟢 Total Debt has shrunk at 5.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹24 Cr

Total Liabilities

₹24 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.4%

Corporate Actions

Ex-Dividend Date

16 Sept 2010

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 mixed5 general

Organic Coatings Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 29 Aug

Organic Coatings director Ajay Shah ceases office after AGM vote loss

scanx.trade, 01 Oct

RPM CEO Sounds Housing Alarm: Turnover at 40-Year Low, ‘Not Going to Get Better’ Yet

TradingView, 06 Oct

Organic Coatings sets Sep 22 record date for 61st AGM

scanx.trade, 29 Aug

Pigment Dispersion Market, Global Market Analysis Report - 2036

Fact.MR, 21 Apr

PPG reports second quarter 2026 financial results

Business Wire, 28 JulResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · 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. 4 high-severity red flags sit above this conclusion and should be read first.

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