Rashtriya Chemicals and Fertilizers Limited

Basic Materials — Agricultural Inputs · NSE

₹104.65−₹0.03 (−0.03%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, 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, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rashtriya Chemicals and Fertilizers Limited manufactures, markets, and sells fertilizers and industrial chemicals in India. The company operates through Fertilizers, Industrial Chemicals, and Trading segments.

IndustryAgricultural Inputs

SectorBasic Materials

Employees2,668

Annual revenue₹7,546 Cr

How does it make money?

Turns over ₹7,546 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 2,668 employees supports ₹2.83 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.83 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?Little sign of one

Returns on capital of 11.5% 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 -3% while net margin moved -54% 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-54%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.2% a year
✗ Profit has declined at 23.8% a year

Quality vs. Valuation

Company Quality

34/ 100

Weak

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

Valuation

83/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

12.9x

3Y Median

29.3x

40 monthly readings · mean 24.9x · range 6.9x–49.3x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 56% below its 3y median of 29.3x. 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 55% below the peer median of 28.7x.

vs. its own history

Cheap

29.3x median over 40 months · -56%

vs. sector peers

Cheap

28.7x median of 4 peers · -55%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.0x

PEG

0.38

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 21.1% to 8.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 23.7% to 11.5% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 120% over 3 years, from ₹1,877 Cr to ₹4,128 Cr.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.6 points, from 20.1% to 14.5%.
🔴Receivables growing faster than salesFinancial
Receivables up 80% against revenue up -3% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,547 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 56% 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 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 20.1% to 14.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 80% against revenue up -3%. 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 21.1% to 8.3%. 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.
Size brings its own risk
Small 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 12%✓ 14.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹1,547 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 9%✓ 11.5%
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

5 good · 5 neutral · 1 weak

Market Cap

₹5,773 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.9x

Cheap

Cheap against the generic band

P/B Ratio

1.13x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹8.09

Profitable

Profitable on a per-share basis

ROE

8.3%

Moderate

Moderate capital efficiency

ROCE

11.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.81x

Moderate

Moderate leverage

Revenue Growth (YoY)

6.4%

Modest

Modest growth

Profit Growth (YoY)

34.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.24%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹1,547 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

14.1x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

3.8%

Weak

Thin margins leave little room for error

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.17

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

107.1 / 113.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,816 Cr	₹6,424 Cr	₹7,033 Cr	₹7,546 Cr	-1.2%
EBITDA	₹1,568 Cr	₹678 Cr	₹811 Cr	₹1,091 Cr	-11.4%
EBITDA Margin	20.1%	10.6%	11.5%	14.5%	—
PAT (Net Profit)	₹966 Cr	₹225 Cr	₹242 Cr	₹427 Cr	-23.8%
EPS	₹17.52	₹4.08	₹4.39	₹7.75	-23.8%
ROE	21.1%	4.9%	5.1%	8.3%	—
ROCE	23.7%	7.9%	8.9%	11.5%	—
Total Debt	₹1,877 Cr	₹3,297 Cr	₹2,762 Cr	₹4,128 Cr	+30.1%
Free Cash Flow	₹402 Cr	-₹905 Cr	₹1,536 Cr	-₹1,547 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.2% a year).

🔴 EBITDA has shrunk at 11.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.1% to 14.5% over 3 years (-5.6 pts).

🔴 PAT (Net Profit) has shrunk at 23.8% a year over 3 years.

🔴 EPS has shrunk at 23.8% a year over 3 years.

🔴 ROE has fallen from 21.1% to 8.3% over 3 years (-12.7 pts).

🔴 ROCE has fallen from 23.7% to 11.5% over 3 years (-12.1 pts).

🔴 Total Debt has grown at 30.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹402 Cr to -₹1,547 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹16,701 Cr

Total Liabilities

₹11,580 Cr

Cash & Equivalents

₹124 Cr

Operating Cash Flow

-₹471 Cr

Capex

-₹1,076 Cr

Shareholding (proxy)

Institutional Holding

1.2%

Insider Holding

75.0%

Corporate Actions

Dividend Rate

₹2.34

Ex-Dividend Date

18 Sept 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 mixed5 general

Tech Query: ICICI Prudential Asset Management Company (AMC), Latent View Analytics, Rashtriya Chemicals and Fertilizers, IRB Infrastructure Developers — What is the outlook? Where are these stocks headed?

BusinessLine, 17 Oct

National Fertilizers Share Price - Live NSE: NFL Stock Price & Chart

Upstox, 16 Oct

Rashtriya Chemicals awards ₹797 crore ammonia plant revamp order to Larsen & Toubro

CNBC TV18, 25 Sept

Rashtriya Chemicals and Fertilizers jumps 9% on posting strong Q4 results

Business Standard, 22 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Rashtriya Chemicals and Fertilizers (RCF) Plans to Raise Rs 1,500 Crore Via FPO

HDFC Sky, 08 Jul

RCF FPO: PSU stock Rashtriya Chemicals and Fertilizers declares ₹1500 crore fundraise. Details here

Livemint, 08 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.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Risk

WeakGrowth · Profitability

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑