Rossari Biotech Limited

Basic Materials — Specialty Chemicals · NSE

₹455.00+₹17.85 (+4.08%)

DalalBaazaar Score

63 / 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, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rossari Biotech Limited manufactures and sells specialty chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees585

Annual revenue₹2,390 Cr

How does it make money?

Turns over ₹2,390 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 585 employees supports ₹4.09 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.09 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.4% 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?

4 analysts covering the stock expect revenue to grow about 12.1% and earnings to grow about 24.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.1%

Est. earnings growth+24.3%

Analysts4

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 +45% while net margin moved -4% 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+45%

Margin effect-4%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.58 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

74/ 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

16.7x

3Y Median

29.2x

40 monthly readings · mean 29.6x · range 15.4x–44.7x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 43% below its 3y median of 29.2x. 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 59% below the peer median of 40.4x.

vs. its own history

Cheap

29.2x median over 40 months · -43%

vs. sector peers

Cheap

40.4x median of 4 peers · -59%

vs. generic bands

Fair

15x–35x

EV/EBITDA

9.9x

PEG

1.44

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Margins are compressing
EBITDA margin has slipped from 13.8% to 12.1% over 3 years.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 490% over 3 years, from ₹74 Cr to ₹436 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 115% against revenue up 45% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 43% 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 59% 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 13.8% to 12.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.1% CAGR
Latest reported year was 19.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹200 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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 · 6 neutral · 1 weak

Market Cap

₹2,520 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.7x

Fair

Fairly valued against the generic band

P/B Ratio

1.79x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹27.18

Profitable

Profitable on a per-share basis

ROE

11.5%

Moderate

Moderate capital efficiency

ROCE

15.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

19.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

5.6%

Modest

Slow profit growth

Dividend Yield

0.11%

Modest

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

Free Cash Flow

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

13.5x

Improving

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

ROA

5.6%

Average

Average asset productivity

Operating Margin

8.2%

Average

Average margins

Net Margin

5.7%

Average

Average bottom-line conversion

Current Ratio

1.62

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.58

Defensive

Steadier than the market

52W Range Position

27%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

432.9 / 463.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

55.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,651 Cr	₹1,825 Cr	₹2,071 Cr	₹2,390 Cr	+13.1%
EBITDA	₹228 Cr	₹253 Cr	₹268 Cr	₹290 Cr	+8.3%
EBITDA Margin	13.8%	13.9%	13.0%	12.1%	—
PAT (Net Profit)	₹107 Cr	₹131 Cr	₹136 Cr	₹149 Cr	+11.6%
EPS	₹19.38	₹23.62	₹24.63	₹26.93	+11.6%
ROE	11.7%	12.5%	11.5%	11.2%	—
ROCE	16.3%	17.2%	14.9%	15.4%	—
Total Debt	₹74 Cr	₹119 Cr	₹218 Cr	₹436 Cr	+80.7%
Free Cash Flow	₹119 Cr	-₹88 Cr	-₹21 Cr	-₹200 Cr	—

🟢 Revenue has grown at 13.1% a year over 3 years.

🟢 EBITDA has grown at 8.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.8% to 12.1% over 3 years (-1.7 pts).

🟢 PAT (Net Profit) has grown at 11.6% a year over 3 years.

🟢 EPS has grown at 11.6% a year over 3 years.

🟡 ROE has held roughly flat at 11.2% over 3 years.

🟡 ROCE has held roughly flat at 15.4% over 3 years.

🔴 Total Debt has grown at 80.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹119 Cr to -₹200 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,289 Cr

Total Liabilities

₹955 Cr

Cash & Equivalents

₹75 Cr

Operating Cash Flow

₹65 Cr

Capex

-₹265 Cr

Shareholding (proxy)

Institutional Holding

14.7%

Insider Holding

68.1%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

3 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹610.5

+34.2% vs CMP

Target Range

₹570 – ₹637

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

Rossari Biotech Closes 75% Higher On Stock Market Debut

NDTV Profit, 17 Oct

Rossari Biotech Q2FY27 Results: Revenue up 19% YoY to ₹6,976 mn

scanx.trade, 17 OctResults

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

Rossari Biotech Q2 Profit Hits Rs 389 Million, Plans Saudi Expansion

Whalesbook, 17 OctCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Rossari Biotech Share Pros and Cons 2026 | ROSSARI Specialty Chemicals

Univest, 10 Aug

Rossari Biotech (ROSSARI.NS) Slides 3.10% to ₹409.8 as Stock Retreats Toward Support - Volume Oscillator

siam.in, 08 Oct

Rossari Biotech's (NSE:ROSSARI) Profits Appear To Have Quality Issues

Simply Wall Street, 04 May

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness 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. 4 high-severity red flags sit above this conclusion and should be read first.

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