Panama Petrochem Limited

Energy — Oil & Gas Refining & Marketing · NSE

₹489.40−₹1.95 (−0.40%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Panama Petrochem Limited, together with its subsidiary, Panol Industries RMC FZE, manufactures, sells, and trades in specialty petroleum products for the printing, textiles, rubber, pharmaceutical, cosmetics, power, and other industrial oil industries in India and internationally.

IndustryOil & Gas Refining & Marketing

SectorEnergy

Employees191

Annual revenue₹3,064 Cr

How does it make money?

Turns over ₹3,064 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 191 employees supports ₹16.04 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹16.04 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP 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?Some evidence

ROCE of 17.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +36% while net margin moved -33% 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+36%

Margin effect-33%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 10.9% is steady
✗ Profit has declined at 3.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

72/ 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

6.2x

3Y Median

10.6x

40 monthly readings · mean 10.5x · range 7.5x–14.7x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 42% below its 3y median of 10.6x. 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 is priced broadly in line with the peer median of 6.9x.

vs. its own history

Cheap

10.6x median over 40 months · -42%

vs. sector peers

Fair

6.9x median of 4 peers · -10%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.4x

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 24.5% to 14.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.4% to 17.9% — 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 25095% over 3 years, from ₹0 Cr to ₹111 Cr.
🔴High leverageFinancial
Debt/Equity of 7.55x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 106% against revenue up 36% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹124 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 4.5 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 64% against revenue up 36% — 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 42% 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.
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 13.9% to 9.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.55x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 64% against revenue up 36%. 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 24.5% to 14.5%. 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

1Revenue growth stays above 8% a year✓ 10.9% CAGR
Latest reported year was 150.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 9.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹124 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 15%✓ 17.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

₹2,961 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.2x

Cheap

Cheap against the generic band

P/B Ratio

2.02x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹79.14

Profitable

Profitable on a per-share basis

ROE

14.5%

Moderate

Moderate capital efficiency

ROCE

17.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

7.55x

High

High leverage

Revenue Growth (YoY)

150.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

625.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.61%

Modest

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

Free Cash Flow

-₹124 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

22.4%

Good

Healthy core-business profitability

Net Margin

11.7%

Good

Strong bottom-line conversion

Current Ratio

3.69

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.59

Defensive

Steadier than the market

52W Range Position

70%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

490.3 / 487.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

53.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,249 Cr	₹2,357 Cr	₹2,793 Cr	₹3,064 Cr	+10.9%
EBITDA	₹312 Cr	₹262 Cr	₹256 Cr	₹288 Cr	-2.6%
EBITDA Margin	13.9%	11.1%	9.2%	9.4%	—
PAT (Net Profit)	₹233 Cr	₹195 Cr	₹187 Cr	₹213 Cr	-3.0%
EPS	₹38.51	₹32.26	₹30.92	₹35.13	-3.0%
ROE	24.5%	17.7%	14.9%	14.5%	—
ROCE	31.4%	22.8%	18.7%	17.9%	—
Total Debt	₹0 Cr	₹26 Cr	₹33 Cr	₹111 Cr	+531.6%
Free Cash Flow	₹174 Cr	-₹77 Cr	₹135 Cr	-₹124 Cr	—

🟢 Revenue has grown at 10.9% a year over 3 years.

🔴 EBITDA has shrunk at 2.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.9% to 9.4% over 3 years (-4.5 pts).

🔴 PAT (Net Profit) has shrunk at 3.0% a year over 3 years.

🔴 EPS has shrunk at 3.0% a year over 3 years.

🔴 ROE has fallen from 24.5% to 14.5% over 3 years (-10.0 pts).

🔴 ROCE has fallen from 31.4% to 17.9% over 3 years (-13.5 pts).

🔴 Total Debt has grown at 531.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹174 Cr to -₹124 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,919 Cr

Total Liabilities

₹450 Cr

Cash & Equivalents

₹71 Cr

Operating Cash Flow

-₹69 Cr

Capex

-₹54 Cr

Shareholding (proxy)

Institutional Holding

4.1%

Insider Holding

76.1%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

17 Aug 2026

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

1 positive1 mixed4 general

Panama Petrochem Share Price Forecast: 3 Year Outlook to 2030

Univest, 22 Jul

Here's Why We Think Panama Petrochem (NSE:PANAMAPET) Is Well Worth Watching

Simply Wall Street, 08 Oct

Panama Petrochem FY26 Results: Net Profit Rises 22.89% to ₹143.28 Crore

scanx.trade, 15 OctResults

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

Lubricant stocks: Panama Petrochem, Gandhar Oil soar 18% on huge volumes

Business Standard, 19 Jun

Domino effect: Gandhar Oil’s 20% upper circuit spurs rally in Savita Oil and Panama Petro. Here’s why

The Economic Times, 23 Jul

Ramesh Damani portfolio stock: Up 90% in 6 months! Ace investor raises stake in this share during Q2 | Should you buy?

Livemint, 12 OctResults

🟡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.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Profitability · Risk

WeakGrowth

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑