PRASOL CHEMICALS LIMITED

Basic Materials — Specialty Chemicals · NSE

₹747.00+₹7.55 (+1.02%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

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

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

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 PRASOL CHEMICALS LIMITED — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Prasol Chemicals Limited operates as an integrated manufacturer of acetone derivatives and phosphorous derivatives in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees719

Annual revenue₹1,229 Cr

How does it make money?

Turns over ₹1,229 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 719 employees supports ₹1.71 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin11.8%

Net margin6.8%

Revenue / employee₹1.71 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?Some evidence

ROCE of 22.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE22.5%

ROE18.5%

Peer median ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +33% 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+33%

Margin effect+29%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

77/ 100

Good

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

Valuation

38/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

37.7x

Sector Median

40.4x

median of 4 sector peers

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

vs. its own history

Not enough price and earnings history

vs. sector peers

Fair

40.4x median of 4 peers · -6%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

37.7x

P/B

9.66x

EV/EBITDA

31.1x

PEG

1.93

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 9.5% to 11.8% over 3 years.
Debt is being paid down
Total debt is down 41% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 17.7% to 22.5%.
High return on capital employed
ROCE of 22.5% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.25x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 66% against revenue growth of 33% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 66% against revenue up 33% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.5% 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 9.5% to 11.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 41% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹10 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 66% against revenue up 33%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1EBITDA margin holds above 10%✓ 11.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.9% CAGR
Latest reported year was 36.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹10 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 22.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 10 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

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹4,421 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

37.7x

Fair

Fairly valued against the generic band

P/B Ratio

9.66x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹19.79

Profitable

Profitable on a per-share basis

ROE

18.5%

Strong

Strong capital efficiency

ROCE

22.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.25x

Low

Conservative leverage

Revenue Growth (YoY)

36.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

150.7%

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

₹10 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹747

Operating Margin

19.6%

Good

Healthy core-business profitability

Net Margin

8.9%

Average

Average bottom-line conversion

Current Ratio

1.54

Comfortable

Healthy short-term liquidity

52W Range Position

44%

Mid-range

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹925 Cr	₹873 Cr	₹1,008 Cr	₹1,229 Cr	+9.9%
EBITDA	₹88 Cr	₹71 Cr	₹90 Cr	₹145 Cr	+18.2%
EBITDA Margin	9.5%	8.1%	8.9%	11.8%	—
PAT (Net Profit)	₹49 Cr	₹18 Cr	₹44 Cr	₹83 Cr	+19.6%
EPS	₹8.21	₹3.06	₹7.36	—	—
ROE	15.7%	5.6%	11.9%	18.5%	—
ROCE	17.7%	11.1%	15.0%	22.5%	—
Total Debt	₹186 Cr	₹83 Cr	₹102 Cr	₹111 Cr	-15.9%
Free Cash Flow	-₹24 Cr	₹96 Cr	-₹0 Cr	₹10 Cr	—

🟢 Revenue has grown at 9.9% a year over 3 years.

🟢 EBITDA has grown at 18.2% a year over 3 years.

🟢 EBITDA Margin has risen from 9.5% to 11.8% over 3 years (+2.3 pts).

🟢 PAT (Net Profit) has grown at 19.6% a year over 3 years.

🟢 ROE has risen from 15.7% to 18.5% over 3 years (+2.8 pts).

🟢 ROCE has risen from 17.7% to 22.5% over 3 years (+4.8 pts).

🟢 Total Debt has shrunk at 15.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹24 Cr to ₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹839 Cr

Total Liabilities

₹391 Cr

Total Debt

₹111 Cr

Cash & Equivalents

₹24 Cr

Operating Cash Flow

₹49 Cr

Capex

-₹39 Cr

Shareholding (proxy)

Institutional Holding

3.9%

Insider Holding

83.9%

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

6 general

PRASOL CHEMICALS LIMITED Share Price

Upstox, 16 Oct

Compare with

Equitymaster, 17 Oct

Prasol Chemicals IPO Listing: Shares Open at 9.76% Discount Despite 3.47x Subscription

India Infoline, 16 Sept

Prasol Chemicals IPO Day 3: Subscription Status, Timeline & Key Issue Details

Groww, 09 Sept

Prasol Chemicals closes IPO with 3.3 times bids as allotment date nears

Indiatimes, 12 Sept

Prasol Chemicals shares list at 10% discount to IPO price on BSE, NSE

The Economic Times, 16 Sept

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong17.6/20

🟢GrowthStrong16.1/20

🟢ProfitabilityStrong10.2/15

🔴ValuationDemanding5/15

🔴RiskHigh2.3/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you.

This thesis breaks if

✓EBITDA margin holds above 10%11.8%
✓Revenue growth stays above 7% a year9.9% CAGR
✓Free cash flow remains positive₹10 Cr
✓Debt / EBITDA stays below 2x0.8x
✓ROCE stays above 19%22.5%