Poddar Pigments Limited

Basic Materials — Specialty Chemicals · NSE

₹262.55−₹8.20 (−3.03%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Poddar Pigments Limited manufactures and sells color and additive masterbatches for dope dyeing of man-made fibers and various plastic applications in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees358

Annual revenue₹372 Cr

How does it make money?

Turns over ₹372 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 358 employees supports ₹1.04 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.04 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.8% 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.

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 +10% while net margin moved -51% 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+10%

Margin effect-51%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.4% — barely ahead of inflation
✗ Profit has declined at 18.6% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

57/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

18.3x

3Y Median

13.3x

40 monthly readings · mean 13.5x · range 9.4x–19.1x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 37% above its 3y median of 13.3x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 55% below the peer median of 40.4x.

vs. its own history

Expensive

13.3x median over 40 months · +37%

vs. sector peers

Cheap

40.4x median of 4 peers · -55%

vs. generic bands

Fair

15x–35x

EV/EBITDA

8.0x

PEG

1.60

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 95% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 9.3% to 4.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.4% to 5.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 1.74x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 62% against revenue up 10% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 46% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 55% 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 12.7% 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 1.74x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 62% against revenue up 10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 37% 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 3.4% 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.

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

1EBITDA margin holds above 7%✓ 9.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 3.4% CAGR
Latest reported year was -1.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹22 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.8%
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

4 good · 3 neutral · 4 weak

Market Cap

₹279 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.3x

Fair

Fairly valued against the generic band

P/B Ratio

0.79x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹14.36

Profitable

Profitable on a per-share basis

ROE

4.2%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

1.74x

High

High leverage

Revenue Growth (YoY)

-1.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

11.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.52%

Modest

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

Free Cash Flow

₹22 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

2.8%

Weak

Thin margins leave little room for error

Net Margin

4.1%

Average

Average bottom-line conversion

Current Ratio

3.95

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

46%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

266.4 / 264.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹337 Cr	₹369 Cr	₹365 Cr	₹372 Cr	+3.4%
EBITDA	₹43 Cr	₹46 Cr	₹38 Cr	₹35 Cr	-6.5%
EBITDA Margin	12.7%	12.4%	10.3%	9.4%	—
PAT (Net Profit)	₹27 Cr	₹29 Cr	₹23 Cr	₹15 Cr	-18.6%
EPS	₹25.77	₹27.16	₹21.51	₹13.91	-18.6%
ROE	9.3%	8.3%	6.3%	4.2%	—
ROCE	12.4%	10.8%	8.2%	5.8%	—
Total Debt	—	—	₹12 Cr	₹6 Cr	—
Free Cash Flow	₹12 Cr	-₹5 Cr	-₹12 Cr	₹22 Cr	+24.9%

🟢 Revenue has grown at 3.4% a year over 3 years.

🔴 EBITDA has shrunk at 6.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.7% to 9.4% over 3 years (-3.3 pts).

🔴 PAT (Net Profit) has shrunk at 18.6% a year over 3 years.

🔴 EPS has shrunk at 18.6% a year over 3 years.

🔴 ROE has fallen from 9.3% to 4.2% over 3 years (-5.1 pts).

🔴 ROCE has fallen from 12.4% to 5.8% over 3 years (-6.6 pts).

🟢 Free Cash Flow has grown at 24.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹412 Cr

Total Liabilities

₹61 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹55 Cr

Capex

-₹33 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.8%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

11 Sept 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

4 positive1 mixed1 general

Poddar Pigments Limited (NSE:PODDARMENT) Will Pay A ₹4.00 Dividend In Three Days

Simply Wall Street, 07 SeptCapital return

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

Poddar Pigments approves ₹4 per share final dividend for FY26

scanx.trade, 21 SeptCapital return

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

Poddar Pigments Share Price: Price Action and Fundamentals

Univest, 08 Sept

Poddar Pigments sets Sep 21 AGM for ₹4 dividend, e-voting starts Sep 18

scanx.trade, 22 AugCapital return

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

Poddar Pigments Ltd. Share Price Fall and Stock Analysis

Univest, 19 AugPrice 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.

Poddar Pigments Q1FY27 net profit rises 12% YoY to ₹4.65 crore

scanx.trade, 14 AugResults

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

Watch Items

Revenue growth is negative (-1.2%) 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.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Revenue growth stays above 4% a year; ROCE stays above 8% · see Key things to watch ↑