Pondy Oxides And Chemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹432.75−₹3.00 (−0.69%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Pondy Oxides And Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Pondy Oxides And Chemicals Limited produces and sells lead, lead alloys, and plastic additives in India. The company provides calcium, antimony, master, tin, silver, cadmium, and babbit Alloys.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees492

Annual revenue₹2,900 Cr

How does it make money?

Turns over ₹2,900 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 492 employees supports ₹5.89 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin7.5%

Net margin4.5%

Revenue / employee₹5.89 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.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 24.1%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 16.7% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE24.1%

ROE16.7%

Peer median ROE22.3%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 35.7% and earnings to grow about 42.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+35.7%

Est. earnings growth+42.2%

Analysts1

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 +97% while net margin moved -11% 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+97%

Margin effect-11%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.02 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

70/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

27.0x

3Y Median

50.8x

40 monthly readings · mean 41.9x · range 6.7x–87.6x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 47% below its 3y median of 50.8x. 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 33% below the peer median of 40.4x.

vs. its own history

Cheap

50.8x median over 40 months · -47%

vs. sector peers

Cheap

40.4x median of 4 peers · -33%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

27.0x

P/B

4.19x

EV/EBITDA

15.7x

PEG

1.31

Dividend Yield

0.46%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.5% to 7.5% over 3 years.
High return on capital employed
ROCE of 24.1% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 27.0x the stock trades 47% below its own median of 50.8x.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

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 28.4% to 16.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 35.4% to 24.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 161% against revenue growth of 97% — customers are taking longer to pay.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Receivables growing faster than salesFinancial
Receivables up 161% against revenue up 97% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹94 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 31% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 5.5% to 7.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 47% 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 33% 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?

Sales are being booked faster than collected
Receivables are up 161% against revenue up 97%. 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 28.4% to 16.7%. 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.
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

1Revenue growth stays above 19% a year✓ 25.3% CAGR
Latest reported year was 55.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹94 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 24.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹3,301 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.0x

Fair

Fairly valued against the generic band

P/B Ratio

4.19x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹16.03

Profitable

Profitable on a per-share basis

ROE

16.7%

Strong

Strong capital efficiency

ROCE

24.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

55.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

34.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.46%

Modest

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

Free Cash Flow

-₹94 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹432.75

P/E (Forward)

14.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.3%

Average

Average margins

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

3.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.02

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

451.0 / 471.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,475 Cr	₹1,540 Cr	₹2,041 Cr	₹2,900 Cr	+25.3%
EBITDA	₹81 Cr	₹74 Cr	₹108 Cr	₹219 Cr	+39.1%
EBITDA Margin	5.5%	4.8%	5.3%	7.5%	—
PAT (Net Profit)	₹75 Cr	₹32 Cr	₹58 Cr	₹132 Cr	+20.7%
EPS	₹12.91	₹5.42	₹8.43	₹17.59	+10.9%
ROE	28.4%	8.9%	9.8%	16.7%	—
ROCE	35.4%	16.9%	15.2%	24.1%	—
Total Debt	₹156 Cr	₹103 Cr	₹113 Cr	₹152 Cr	-0.8%
Free Cash Flow	-₹33 Cr	₹28 Cr	-₹170 Cr	-₹94 Cr	—

🟢 Revenue has grown at 25.3% a year over 3 years.

🟢 EBITDA has grown at 39.1% a year over 3 years.

🟢 EBITDA Margin has risen from 5.5% to 7.5% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 20.7% a year over 3 years.

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

🔴 ROE has fallen from 28.4% to 16.7% over 3 years (-11.7 pts).

🔴 ROCE has fallen from 35.4% to 24.1% over 3 years (-11.3 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.8% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹983 Cr

Total Liabilities

₹195 Cr

Total Debt

₹152 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

-₹44 Cr

Capex

-₹50 Cr

Shareholding (proxy)

Institutional Holding

3.9%

Insider Holding

41.8%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

15 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹781

+80.5% vs CMP

Target Range

₹781 – ₹781

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

3 positive2 mixed1 general

Pondy Oxides And Chemicals (NSEI:POCL) Stock Forecast & Analyst Predictions

Simply Wall Street, 05 OctAnalyst view

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

Pondy Oxides shares gain 3%: Buy today for 2:5 stock split eligibility; record date tomorrow

Moneycontrol.com, 20 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Pondy Oxides & Chemicals (POCL.NS) Slips 2.83% to ₹428.70 as Stock Retreats Toward Key Support Zone - Schiff Line

siam.in, 12 Oct

Pondy Oxides seeks stock split and CMD re-appointment

scanx.trade, 26 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Pondy Oxides & Chemicals fixes record date for stock split

Business Standard, 07 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Why Is Pondy Oxides and Chemicals Share Price Falling Key Reasons 2026

Univest, 24 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate9.6/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate7.3/15

🟡ValuationFair9.5/15

🔴RiskHigh4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 19% a year25.3% CAGR
✓EBITDA margin holds above 6%7.5%
✗Free cash flow remains positive-₹94 Cr
✓Debt / EBITDA stays below 2x0.7x
✓ROCE stays above 21%24.1%