Retina Paints Limited

Basic Materials — Specialty Chemicals · BSE

₹31.30−₹2.24 (−6.68%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:55 pm

Understanding the Business

Company site ↗

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

What does this company do?

Retina Paints Limited manufactures and sells paints in India. It offers emulsions, primers, distempers, enamels, and putty/ texture products. The company was incorporated in 2010 and is headquartered in Hyderabad, India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees162

Annual revenue₹24 Cr

How does it make money?

Turns over ₹24 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 162 employees supports ₹14.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹14.7 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?Little sign of one

Returns on capital of 5.1% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +117% while net margin moved -2% 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+117%

Margin effect-2%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 1.9% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

46/ 100

Fair

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

74.5x

3Y Median

113.9x

40 monthly readings · mean 154.4x · range 36.8x–375.5x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 35% below its 3y median of 113.9x. 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 85% above the peer median of 40.4x.

vs. its own history

Cheap

113.9x median over 40 months · -35%

vs. sector peers

Expensive

40.4x median of 4 peers · +85%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

24.1x

PEG

2.61

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 7.6% to 11.6% over 3 years.
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

6 items require attention · 5 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 349% over 3 years, from ₹4 Cr to ₹19 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 452% against revenue up 117% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 203% against revenue up 117% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.8x to 1.8x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.6% to 11.6%. 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 35% 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.
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?

The debt load needs earnings to hold up
Debt is 7.0x 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 452% against revenue up 117%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 85% 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 22% a year✓ 29.4% CAGR
Latest reported year was 6.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 7.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹48 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

74.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.38x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.42

Profitable

Profitable on a per-share basis

ROE

1.9%

Weak

Weak capital efficiency

ROCE

5.1%

Weak

Low return on total capital employed

Debt/Equity

0.55x

Low

Conservative leverage

Revenue Growth (YoY)

6.4%

Modest

Modest growth

Profit Growth (YoY)

-49.5%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

2.6%

Weak

Assets generate little profit

Operating Margin

10.0%

Average

Average margins

Net Margin

2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.11

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

34.4 / 37.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹12 Cr	₹21 Cr	₹24 Cr	+29.4%
EBITDA	₹1 Cr	₹2 Cr	₹3 Cr	₹3 Cr	+49.3%
EBITDA Margin	7.6%	17.8%	15.8%	11.6%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+28.6%
EPS	₹0.22	₹0.54	₹0.85	—	—
ROE	2.4%	3.4%	3.8%	1.8%	—
ROCE	5.4%	7.3%	7.8%	5.1%	—
Total Debt	₹4 Cr	₹7 Cr	₹10 Cr	₹19 Cr	+65.0%
Free Cash Flow	-₹7 Cr	-₹11 Cr	-₹12 Cr	-₹8 Cr	—

🟢 Revenue has grown at 29.4% a year over 3 years.

🟢 EBITDA has grown at 49.3% a year over 3 years.

🟢 EBITDA Margin has risen from 7.6% to 11.6% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 28.6% a year over 3 years.

🟡 ROE has held roughly flat at 1.8% over 3 years.

🟡 ROCE has held roughly flat at 5.1% over 3 years.

🔴 Total Debt has grown at 65.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹63 Cr

Total Liabilities

₹28 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.9%

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

1 positive1 mixed4 general

Compare with

Equitymaster, 15 Oct

Retina Paints Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Retina Paints FY26 net profit falls 51% despite revenue rise

scanx.trade, 28 MayResults

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

Shalimar Paints Ltd. (SHALPAINTS) Share Price Rises 19.99% Today

Univest, 03 AugPrice 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.

Investors in Shalimar Paints (NSE:SHALPAINTS) from three years ago are still down 54%, even after 10% gain this past week

Simply Wall Street, 01 Jan

List of 774 Paints and Coatings Startups in India & Market Trends (Oct 2026)

Tracxn, 01 Oct

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

StrongGrowth

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Profitability · Risk

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. 5 high-severity red flags sit above this conclusion and should be read first.

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