Padmanabh Alloy & Polymers Limited

Basic Materials — Specialty Chemicals · BSE

₹16.00₹0.00 (0.00%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Padmanabh Alloy & Polymers Limited engages in the manufacture and sale of filled and reinforced thermoplastic compounds and master batches products in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees28

Annual revenue₹46 Cr

How does it make money?

Turns over ₹46 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 28 employees supports ₹1.63 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.63 Cr

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 6.2% 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 +10% while net margin moved -41% 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+10%

Margin effect-41%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.2% — barely ahead of inflation
✗ Profit has declined at 13.4% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 38.9% in the latest year

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

78/ 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

9.1x

3Y Median

39.7x

40 monthly readings · mean 41.4x · range 20.3x–72.3x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 77% below its 3y median of 39.7x. 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 77% below the peer median of 40.4x.

vs. its own history

Cheap

39.7x median over 40 months · -77%

vs. sector peers

Cheap

40.4x median of 4 peers · -77%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

16.3x

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 Attention1

Return on capital is falling
ROCE has declined from 8.9% to 6.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Profit is decliningFinancial
Net profit is down 35% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 33% against revenue up 10% — 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 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 77% 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 ₹1 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?

The debt load needs earnings to hold up
Debt is 5.7x 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 33% against revenue up 10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 3.2% 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 0%✓ 1.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 3.2% CAGR
Latest reported year was 52.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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 · 2 neutral · 3 weak

Market Cap

₹9 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.1x

Cheap

Cheap against the generic band

P/B Ratio

0.95x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.75

Profitable

Profitable on a per-share basis

ROE

1.6%

Weak

Weak capital efficiency

ROCE

6.2%

Weak

Low return on total capital employed

Debt/Equity

0.48x

Low

Conservative leverage

Revenue Growth (YoY)

52.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-38.9%

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 generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.3%

Average

Average margins

Net Margin

1.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.54

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.56

Defensive

Steadier than the market

52W Range Position

34%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

19.8 / 17.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

22.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹41 Cr	₹42 Cr	₹39 Cr	₹46 Cr	+3.2%
EBITDA	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-13.0%
EBITDA Margin	3.0%	2.9%	1.9%	1.8%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-13.4%
EPS	₹0.42	₹0.89	₹0.44	₹0.27	-13.7%
ROE	2.7%	5.5%	2.7%	1.6%	—
ROCE	8.9%	10.5%	5.7%	6.2%	—
Total Debt	₹4 Cr	₹3 Cr	₹5 Cr	₹5 Cr	+7.6%
Free Cash Flow	₹1 Cr	₹1 Cr	-₹1 Cr	₹1 Cr	+6.0%

🟢 Revenue has grown at 3.2% a year over 3 years.

🔴 EBITDA has shrunk at 13.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 3.0% to 1.8% over 3 years (-1.2 pts).

🔴 PAT (Net Profit) has shrunk at 13.4% a year over 3 years.

🔴 EPS has shrunk at 13.7% a year over 3 years.

🔴 ROE has fallen from 2.7% to 1.6% over 3 years (-1.1 pts).

🔴 ROCE has fallen from 8.9% to 6.2% over 3 years (-2.8 pts).

🔴 Total Debt has grown at 7.6% a year over 3 years.

🟢 Free Cash Flow has grown at 6.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹23 Cr

Total Liabilities

₹14 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

5.5%

Insider Holding

53.2%

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

6 general

Padmanabh Alloys & Polymers Ltd. Peer Comparison – Compare with Others

Value Research, 02 Sept

Padmanabh Alloys shareholders approve FY26 financials, re-appoint Desai

scanx.trade, 30 Sept

Compare with

Equitymaster, 07 Oct

Padmanabh Alloys & Polymers Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Padmanabh Alloys & Polymers Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Padmanabh Alloys promoter Mala Naik sells entire stake

scanx.trade, 22 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

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

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑