Prospect Consumer Products Limited

Consumer Defensive — Farm Products · BSE

₹37.00−₹2.78 (−6.99%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:04 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

Company site ↗

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

What does this company do?

Prospect Consumer Products Limited processes and trades in cashew nuts and allied products in India and internationally. The company offers cashew nuts and kernels; and cashew by-products, including cashew husks, cashew husk pellets, and cashew nutshells under the DRIFRUTZ brand.

IndustryFarm Products

SectorConsumer Defensive

Employees9

Annual revenue₹58 Cr

How does it make money?

Turns over ₹58 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 9 employees supports ₹6.39 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.8%

Net margin4.3%

Revenue / employee₹6.39 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Little sign of one

Returns on capital of 13.8% 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.

ROCE13.8%

ROE8.8%

Peer median ROE51.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +353% while net margin moved -1% 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+353%

Margin effect-1%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.8% is weak

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

88/ 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

9.2x

3Y Median

16.6x

40 monthly readings · mean 18.4x · range 7.8x–34.7x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 44% below its 3y median of 16.6x. 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 trades 79% below the peer median of 43.3x.

vs. its own history

Cheap

16.6x median over 40 months · -44%

vs. sector peers

Cheap

43.3x median of 4 peers · -79%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

9.2x

P/B

0.71x

EV/EBITDA

5.3x

PEG

0.14

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Return on capital is rising
ROCE has improved from 9.2% to 13.8%.
Valuation below its historical average
At 9.2x the stock trades 44% below its own median of 16.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 13.1% to 10.8% over 3 years.
Debt is rising
Total debt is up 876% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 947% against revenue growth of 353% — stock may not be moving.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 876% over 3 years, from ₹1 Cr to ₹12 Cr.
🔴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.
🔴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 947% against revenue up 353% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 7.8x to 4.1x.
🟡Margins are compressingFinancial
EBITDA margin is down 2.3 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 50% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 44% 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 79% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 13.1% to 10.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 49% a year✓ 65.5% CAGR
Latest reported year was 56.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 10.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

₹23 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.2x

Cheap

Cheap against the generic band

P/B Ratio

0.71x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.01

Profitable

Profitable on a per-share basis

ROE

8.8%

Moderate

Moderate capital efficiency

ROCE

13.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

56.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-67.5%

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

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹37

ROA

7.6%

Average

Average asset productivity

Operating Margin

5.7%

Average

Average margins

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

3.08

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.67

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

34.2 / 35.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

59.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹13 Cr	₹24 Cr	₹31 Cr	₹58 Cr	+65.5%
EBITDA	₹2 Cr	₹3 Cr	₹4 Cr	₹6 Cr	+55.4%
EBITDA Margin	13.1%	10.8%	13.5%	10.8%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹2 Cr	₹2 Cr	+65.1%
EPS	₹4.53	₹4.22	₹4.03	—	—
ROE	5.0%	13.7%	9.0%	7.7%	—
ROCE	9.2%	18.9%	13.2%	13.8%	—
Total Debt	₹1 Cr	₹3 Cr	₹5 Cr	₹12 Cr	+113.7%
Free Cash Flow	-₹6 Cr	-₹1 Cr	-₹7 Cr	-₹6 Cr	—

🟢 Revenue has grown at 65.5% a year over 3 years.

🟢 EBITDA has grown at 55.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.1% to 10.8% over 3 years (-2.3 pts).

🟢 PAT (Net Profit) has grown at 65.1% a year over 3 years.

🟢 ROE has risen from 5.0% to 7.7% over 3 years (+2.7 pts).

🟢 ROCE has risen from 9.2% to 13.8% over 3 years (+4.6 pts).

🔴 Total Debt has grown at 113.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹48 Cr

Total Liabilities

₹16 Cr

Total Debt

₹12 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.6%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 mixed5 general

Prospect Consumer Products Commences Supplies of DriFrutz Retail and Gifting Products to Deerika; Expands Retail Distribution Network

EquityBulls, 16 Oct

Prospect Consumer Products launches gifting range on Blinkit in Gujarat

scanx.trade, 04 Sept

From paneer to pizza, FSSAI puts India’s ₹200 lakh crore consumer boom to the test. Who pays?

The Economic Times, 12 Oct

Pradhin (BSE:530095) - Stock Analysis

Simply Wall Street, 07 Jun

Physicswallah, L&T, Tata Consumer shares: 3 Stocks to buy; target price up to Rs 4,400

Business Today, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

7 Best Food Stocks for 2026 and How to Invest

The Motley Fool, 31 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟡Financial HealthAdequate11.8/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4/10

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

This thesis breaks if

✓Revenue growth stays above 49% a year65.5% CAGR
✓EBITDA margin holds above 9%10.8%
✗Free cash flow remains positive-₹6 Cr
✓Debt / EBITDA stays below 2x2.0x
✓ROCE stays above 11%13.8%