Paragon Fine and Speciality Chemical Limited

Sector n/a · NSE

₹136.00+₹4.70 (+3.58%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

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

How does it make money?

Turns over ₹107 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation.

EBITDA margin12.5%

Net margin8.5%

What is its competitive advantage?Little sign of one

Returns on capital of 12.2% 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.

ROCE12.2%

ROE9.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +5% while net margin moved -13% 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+5%

Margin effect-13%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

35/ 100

Expensive

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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

19.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 95% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 15.2% to 12.5% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 44.3% to 9.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 39.5% to 12.2% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 57% against revenue growth of 5% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴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 57% against revenue up 5% — sales are being booked faster than they are collected.
🟡Margins are compressingFinancial
EBITDA margin is down 2.7 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 95% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 15.2% to 12.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 57% against revenue up 5%. 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 1.6% 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 44.3% to 9.2%. 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

1EBITDA margin holds above 10%✓ 12.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.6% CAGR
Latest reported year was -6.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 8 neutral · 2 weak

Market Cap

₹266 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

9.2%

Moderate

Moderate capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.17x

Moderate

Moderate leverage

Revenue Growth (YoY)

-6.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

52.9%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹136

Gross Margin

29.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

8.5%

Average

Average bottom-line conversion

Current Ratio

9.86

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

51.6 / 51.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹102 Cr	₹121 Cr	₹114 Cr	₹107 Cr	+1.6%
EBITDA	₹15 Cr	₹21 Cr	₹10 Cr	₹13 Cr	-4.8%
EBITDA Margin	15.2%	17.8%	8.4%	12.5%	—
PAT (Net Profit)	₹10 Cr	₹14 Cr	₹6 Cr	₹9 Cr	-2.9%
EPS	₹5.06	₹8.66	₹3.02	—	—
ROE	44.3%	17.1%	6.6%	9.2%	—
ROCE	39.5%	21.8%	9.0%	12.2%	—
Total Debt	₹25 Cr	₹9 Cr	₹3 Cr	₹1 Cr	-64.2%
Free Cash Flow	-₹3 Cr	-₹3 Cr	-₹14 Cr	-₹0 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.6% a year).

🔴 EBITDA has shrunk at 4.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 15.2% to 12.5% over 3 years (-2.7 pts).

🔴 PAT (Net Profit) has shrunk at 2.9% a year over 3 years.

🔴 ROE has fallen from 44.3% to 9.2% over 3 years (-35.1 pts).

🔴 ROCE has fallen from 39.5% to 12.2% over 3 years (-27.3 pts).

🟢 Total Debt has shrunk at 64.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹108 Cr

Total Liabilities

₹10 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹5 Cr

Recent News

1 positive4 negative1 general

Paragon Fine And Speciality Chemical Share Price Rises 9.73%

Univest, 17 SeptRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Paragon Fine And Speciality Chemical (NSE:PARAGON) May Have Issues Allocating Its Capital

Simply Wall Street, 04 FebRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Paragon Fine and Speciality Chemical Ltd

Equitypandit, 20 FebRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Paragon Fine FY26 net profit rises 52.8% to ₹904.58 lakh

scanx.trade, 28 MayResults

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

Paragon Fine And Speciality Chemical Share Price Rises

Univest, 08 SeptRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

DSFCL Stock Price and Chart — NSE:DSFCL

TradingView, 17 Feb

Watch Items

Revenue growth is negative (-6.5%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟡Business QualityAdequate10.5/20

🟡Financial HealthAdequate12.9/20

🔴GrowthWeak5.9/20

🔴ProfitabilityWeak5.8/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

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

This thesis breaks if

✓EBITDA margin holds above 10%12.5%
✗Free cash flow remains positive-₹0 Cr
✗Revenue growth stays above 4% a year1.6% CAGR
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 9%12.2%