Rama Phosphates Limited

Basic Materials — Agricultural Inputs · NSE

₹108.01−₹0.72 (−0.66%)

DalalBaazaar Score

62 / 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 modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rama Phosphates Limited manufactures and sales phosphatic fertilizers, chemicals, soya, and micronutrients in India.

IndustryAgricultural Inputs

SectorBasic Materials

Employees484

Annual revenue₹589 Cr

How does it make money?

Turns over ₹589 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 484 employees supports ₹1.22 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.22 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 18.0% 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +3% while net margin moved +25% 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+3%

Margin effect+25%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.41 — 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

60/ 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

7.1x

3Y Median

9.8x

40 monthly readings · mean 17.3x · range 6.9x–47.7x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 28% below its 3y median of 9.8x. 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 75% below the peer median of 28.7x.

vs. its own history

Cheap

9.8x median over 40 months · -28%

vs. sector peers

Cheap

28.7x median of 4 peers · -75%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.9x

PEG

0.81

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from 12.8% to 14.9% over 3 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 -₹4 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.8% to 14.9%. 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 28% 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 75% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 1.1% 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.
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 13%✓ 14.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.1% CAGR
Latest reported year was 18.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 15%✓ 18.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹382 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.1x

Cheap

Cheap against the generic band

P/B Ratio

0.90x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹15.18

Profitable

Profitable on a per-share basis

ROE

12.5%

Moderate

Moderate capital efficiency

ROCE

18.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.33x

Low

Conservative leverage

Revenue Growth (YoY)

18.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

6.4%

Modest

Slow profit growth

Dividend Yield

0.69%

Modest

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

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.6%

Average

Average margins

Net Margin

5.8%

Average

Average bottom-line conversion

Current Ratio

1.84

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

116.4 / 120.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

4.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹571 Cr	₹433 Cr	₹515 Cr	₹589 Cr	+1.1%
EBITDA	₹73 Cr	-₹21 Cr	₹45 Cr	₹88 Cr	+6.4%
EBITDA Margin	12.8%	-4.8%	8.7%	14.9%	—
PAT (Net Profit)	₹41 Cr	-₹31 Cr	₹14 Cr	₹53 Cr	+8.8%
EPS	₹11.57	₹-8.78	₹3.86	₹14.9	+8.8%
ROE	13.2%	-8.8%	3.7%	12.5%	—
ROCE	19.6%	-8.1%	9.5%	18.0%	—
Total Debt	₹118 Cr	₹149 Cr	₹126 Cr	₹139 Cr	+5.7%
Free Cash Flow	-₹46 Cr	-₹13 Cr	₹32 Cr	-₹4 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.1% a year).

🟢 EBITDA has grown at 6.4% a year over 3 years.

🟢 EBITDA Margin has risen from 12.8% to 14.9% over 3 years (+2.1 pts).

🟢 PAT (Net Profit) has grown at 8.8% a year over 3 years.

🟢 EPS has grown at 8.8% a year over 3 years.

🟡 ROE has held roughly flat at 12.5% over 3 years.

🔴 ROCE has fallen from 19.6% to 18.0% over 3 years (-1.6 pts).

🔴 Total Debt has grown at 5.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹719 Cr

Total Liabilities

₹297 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹20 Cr

Capex

-₹25 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.7%

Corporate Actions

Dividend Rate

₹0.75

Ex-Dividend Date

31 Jul 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive5 general

Rama Phosphates Share: Bull Case vs Bear Case for 2026

Univest, 18 Sept

Is Rama Phosphates (NSE:RAMAPHO) A Risky Investment?

Simply Wall Street, 09 Jan

Rama Phosphates Q1FY27 net profit rises 6.4% to ₹1,706.44 lakhs on revenue surge

scanx.trade, 24 JulResults

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

Jain Resource Recycling Ltd leads losers in 'B' group

Business Standard, 19 May

Why did FACT, RCF, NFL and other fertiliser stocks rally up to 14% today? Explained

Livemint, 25 Aug

Rama Phosphates Share Price Forecast: 3 Year Outlook to 2030

Univest, 23 Jul

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Profitability

WeakRisk

Points for each in the Score ↑

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

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑