Premier Explosives Limited

Basic Materials — Specialty Chemicals · NSE

₹692.95+₹2.35 (+0.34%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a beta above 1.3, so it swings harder than the index.

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Premier Explosives Limited manufactures and sells high energy materials and allied products in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees844

Annual revenue₹387 Cr

How does it make money?

Turns over ₹387 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 844 employees supports ₹45.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹45.9 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?Some evidence

ROCE of 18.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE22.3%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 28.2% and earnings to grow about 44.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+28.2%

Est. earnings growth+44.2%

Analysts1

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +92% while net margin moved +245% 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+92%

Margin effect+245%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Beta of 1.36 — amplifies market moves in both directions
✗ 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

75/ 100

Good

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

Valuation

39/ 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

111.0x

3Y Median

105.7x

40 monthly readings · mean 156.5x · range 63.3x–581.4x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 105.7x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 175% above the peer median of 40.4x.

vs. its own history

Fair

105.7x median over 40 months · +5%

vs. sector peers

Expensive

40.4x median of 4 peers · +175%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

46.1x

PEG

1.26

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 13.5% to 20.8% over 3 years.
Debt is being paid down
Total debt is down 61% over 3 years.
Return on equity is rising
ROE has improved from 3.5% to 15.8%.
Return on capital is rising
ROCE has improved from 7.3% to 18.9%.
Very low debt
Debt/Equity of 0.11x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹29 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.9% 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 13.5% to 20.8%. 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 61% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

A premium to the sector to defend
It trades 175% above the peer median. That premium needs a reason that persists, or it closes.
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 18% a year✓ 24.3% CAGR
Latest reported year was -27.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹29 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

4 good · 2 neutral · 5 weak

Market Cap

₹3,727 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

111.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

12.93x

Rich

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

EPS (TTM)

₹6.24

Profitable

Profitable on a per-share basis

ROE

15.8%

Strong

Strong capital efficiency

ROCE

18.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.11x

Low

Conservative leverage

Revenue Growth (YoY)

-27.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-80.0%

Falling

Profits are shrinking

Dividend Yield

0.07%

Modest

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

Free Cash Flow

-₹29 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

46.2x

Improving

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

Operating Margin

2.9%

Weak

Thin margins leave little room for error

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.36

High swing

Swings more than the market in both directions

52W Range Position

70%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

682.6 / 671.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

67.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹202 Cr	₹270 Cr	₹416 Cr	₹387 Cr	+24.3%
EBITDA	₹27 Cr	₹62 Cr	₹56 Cr	₹80 Cr	+43.5%
EBITDA Margin	13.5%	23.0%	13.5%	20.8%	—
PAT (Net Profit)	₹7 Cr	₹28 Cr	₹29 Cr	₹46 Cr	+87.9%
EPS	₹1.28	₹5.27	₹5.34	₹8.52	+87.9%
ROE	3.5%	12.9%	11.7%	15.8%	—
ROCE	7.3%	18.4%	15.9%	18.9%	—
Total Debt	₹83 Cr	₹61 Cr	₹41 Cr	₹32 Cr	-27.0%
Free Cash Flow	₹7 Cr	₹56 Cr	₹105 Cr	-₹29 Cr	—

🟢 Revenue has grown at 24.3% a year over 3 years.

🟢 EBITDA has grown at 43.5% a year over 3 years.

🟢 EBITDA Margin has risen from 13.5% to 20.8% over 3 years (+7.3 pts).

🟢 PAT (Net Profit) has grown at 87.9% a year over 3 years.

🟢 EPS has grown at 87.9% a year over 3 years.

🟢 ROE has risen from 3.5% to 15.8% over 3 years (+12.3 pts).

🟢 ROCE has risen from 7.3% to 18.9% over 3 years (+11.7 pts).

🟢 Total Debt has shrunk at 27.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹29 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹483 Cr

Total Liabilities

₹193 Cr

Cash & Equivalents

₹51 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹28 Cr

Shareholding (proxy)

Institutional Holding

11.6%

Insider Holding

48.5%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

23 Sept 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹639.5

-7.7% vs CMP

Target Range

₹569 – ₹710

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 mixed3 general

Premier Explosives Limited (PREMEXPLN.BO) Stock Price, News, Quote & History

Yahoo! Finance Canada, 16 Oct

Premier Explosives zooms 52% in 1 month; what's behind the rally?

Business Standard, 19 Jun

Apollo Micro Systems to acquire 41.33% stake in Premier Explosives for ₹1,550 crore

scanx.trade, 09 JulM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Apollo Micro Jumps 5% as It Buys Into Premier Explosives

Equitypandit, 10 Jul

Premier Explosives share price rises 10% on bagging ₹350 crore order from international entity

Upstox, 22 AprPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Apollo Micro Systems Receives CCI Clearance for Premier Explosives Acquisition

Sahi, 24 SeptM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Watch Items

Revenue growth is negative (-27.8%) 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

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

Points for each in the Score ↑

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑