Paushak Limited

Basic Materials — Specialty Chemicals · NSE

₹832.00+₹42.00 (+5.32%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

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

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Paushak Limited manufactures and sells specialty chemicals and intermediates in India and internationally. It offers chloroformates, isocyanates, chlorides, carbonate/carbamate, and custom synthesis and CDMO solutions.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees367

Annual revenue₹217 Cr

How does it make money?

Turns over ₹217 Cr a year. Of every ₹100 of sales, about ₹18 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 367 employees supports ₹59.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹59.2 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 8.7% 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 +3% while net margin moved -29% 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+3%

Margin effect-29%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 1.0% — barely ahead of inflation
✗ Profit has declined at 10.0% a year

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

36/ 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.

Historical Valuation

Current P/E

43.4x

1.0Y Median

29.7x

12 monthly readings · mean 32.5x · range 17.2x–52.2x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 46% above its 1.0y median of 29.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 40.4x.

vs. its own history

Expensive

29.7x median over 12 months · +46%

vs. sector peers

Fair

40.4x median of 4 peers · +7%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

32.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.13x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 15.3% to 8.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.5% to 8.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.7 points, from 37.7% to 30.1%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹34 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 27% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 61% against revenue up 3% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 700% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 37.7% to 30.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 46% 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 1.0% 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 15.3% to 8.0%. 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.
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 28%✓ 30.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹34 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.0% CAGR
Latest reported year was 52.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 8.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 5 neutral · 1 weak

Market Cap

₹2,051 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

43.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.97x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹19.18

Profitable

Profitable on a per-share basis

ROE

9.5%

Moderate

Moderate capital efficiency

ROCE

8.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

52.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

56.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.30%

Modest

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

Free Cash Flow

₹13 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

4.8%

Average

Average asset productivity

Operating Margin

20.1%

Good

Healthy core-business profitability

Net Margin

17.1%

Good

Strong bottom-line conversion

Current Ratio

2.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.55

Defensive

Steadier than the market

52W Range Position

91%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

702.6 / 728.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

78.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹211 Cr	₹205 Cr	₹210 Cr	₹217 Cr	+1.0%
EBITDA	₹80 Cr	₹73 Cr	₹65 Cr	₹65 Cr	-6.4%
EBITDA Margin	37.7%	35.7%	30.9%	30.1%	—
PAT (Net Profit)	₹54 Cr	₹54 Cr	₹49 Cr	₹39 Cr	-10.0%
EPS	₹21.9	₹22.04	₹20.03	₹15.95	-10.0%
ROE	15.3%	13.3%	10.6%	8.0%	—
ROCE	18.5%	15.6%	11.2%	8.7%	—
Total Debt	—	—	₹25 Cr	₹77 Cr	—
Free Cash Flow	₹26 Cr	₹17 Cr	-₹123 Cr	-₹34 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.0% a year).

🔴 EBITDA has shrunk at 6.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 37.7% to 30.1% over 3 years (-7.7 pts).

🔴 PAT (Net Profit) has shrunk at 10.0% a year over 3 years.

🔴 EPS has shrunk at 10.0% a year over 3 years.

🔴 ROE has fallen from 15.3% to 8.0% over 3 years (-7.3 pts).

🔴 ROCE has fallen from 18.5% to 8.7% over 3 years (-9.8 pts).

🔴 Free Cash Flow has turned negative, from ₹26 Cr to -₹34 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹660 Cr

Total Liabilities

₹169 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹54 Cr

Capex

-₹88 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.6%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

23 Jul 2026

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

2 positive1 mixed3 general

Paushak Q2FY27 Results: Net profit up 57% YoY to ₹1,351 lakh

scanx.trade, 16 OctResults

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

Paushak's (NSE:PAUSHAKLTD) Anemic Earnings Might Be Worse Than You Think

Simply Wall Street, 10 JulResults

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

Paushak Ltd. Share Price news near 52-week peak

Univest, 15 Oct

PAUSHAKLTD Stock Price and Chart — NSE:PAUSHAKLTD

TradingView, 01 Dec

Paushak Limited posts 26% PAT rise in Q1FY27 on strong revenue growth

scanx.trade, 30 Jul

Paushak standalone net profit rises 25.52% in the June 2026 quarter

Business Standard, 30 JulResults

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

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
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

StrongFinancial Health

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth · Valuation

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

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑