Shanthala FMCG Products Limited

Sector n/a · NSE

₹67.10−₹1.45 (−2.12%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

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

How does it make money?

Turns over ₹53 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 5.8% 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.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +64% while net margin moved +1206% 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+64%

Margin effect+1206%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ 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

57/ 100

Average

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

Valuation

18/ 100

Expensive

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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

31.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 1.1% to 2.6% over 3 years.
Debt is being paid down
Total debt is down 98% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 13.7% to 5.8% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Receivables growing faster than salesFinancial
Receivables up 479% against revenue up 64% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹0 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 100% against revenue up 64% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.1% to 2.6%. 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 98% 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?

Sales are being booked faster than collected
Receivables are up 479% against revenue up 64%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 13% a year✓ 17.8% CAGR
Latest reported year was 27.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 2.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹45 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹1.44

Profitable

Profitable on a per-share basis

ROE

4.2%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.50x

Low

Conservative leverage

Revenue Growth (YoY)

27.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

228.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

4.0%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

1.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.71

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

14.3 / 15.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

15.2

Oversold zone

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹32 Cr	₹41 Cr	₹41 Cr	₹53 Cr	+17.8%
EBITDA	₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+59.0%
EBITDA Margin	1.1%	1.7%	1.5%	2.6%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹0 Cr	₹1 Cr	+177.4%
EPS	₹0.07	₹0.26	₹0.67	₹1.44	+177.4%
ROE	3.6%	12.4%	1.4%	4.2%	—
ROCE	13.7%	21.0%	2.7%	5.8%	—
Total Debt	₹5 Cr	₹4 Cr	₹0 Cr	₹0 Cr	-71.0%
Free Cash Flow	₹0 Cr	₹1 Cr	-₹16 Cr	-₹0 Cr	—

🟢 Revenue has grown at 17.8% a year over 3 years.

🟢 EBITDA has grown at 59.0% a year over 3 years.

🟢 EBITDA Margin has risen from 1.1% to 2.6% over 3 years (+1.5 pts).

🟢 PAT (Net Profit) has grown at 177.4% a year over 3 years.

🟢 EPS has grown at 177.4% a year over 3 years.

🟡 ROE has held roughly flat at 4.2% over 3 years.

🔴 ROCE has fallen from 13.7% to 5.8% over 3 years (-7.9 pts).

🟢 Total Debt has shrunk at 71.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹25 Cr

Total Liabilities

₹2 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹0 Cr

Recent News

1 positive5 general

Compare with

Equitymaster, 15 Oct

Shanthala FMCG confirms no share encumbrance in FY26

scanx.trade, 16 Jun

Compare PENTOKEY ORG with

Equitymaster, 13 Oct

Best 7 Tobacco Stocks To Buy In India 2026: Top Picks For Dividend Income

Samco, 27 FebCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Shanthala FMCG Products (NSEI:SHANTHALA) - Stock Analysis

Simply Wall Street, 05 Nov

SHANTHALA Stock Price and Chart — NSE:SHANTHALA

TradingView, 21 Nov

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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 · Growth

MiddlingValuation

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

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑