Narmada Gelatines Limited

Basic Materials — Specialty Chemicals · BSE

₹433.25+₹1.25 (+0.29%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Narmada Gelatines Limited manufactures and sells gelatine and related products in India and internationally. The company's products include ossein and di-calcium phosphate.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees192

Annual revenue₹215 Cr

How does it make money?

Turns over ₹215 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 192 employees supports ₹1.12 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin19.8%

Net margin13.2%

Revenue / employee₹1.12 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.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 25.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.6% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE25.2%

ROE19.6%

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 +13% while net margin moved +65% 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+13%

Margin effect+65%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.40 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

85/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

7.5x

3Y Median

14.6x

40 monthly readings · mean 14.1x · range 9.2x–17.9x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 49% below its 3y median of 14.6x. 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 81% below the peer median of 40.4x.

vs. its own history

Cheap

14.6x median over 40 months · -49%

vs. sector peers

Cheap

40.4x median of 4 peers · -81%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.5x

P/B

1.80x

EV/EBITDA

6.4x

PEG

0.33

Dividend Yield

2.54%

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 10.6% to 19.8% over 3 years.
Cash generation is improving
Free cash flow is up 28% over 3 years.
Return on equity is rising
ROE has improved from 16.3% to 19.6%.
Return on capital is rising
ROCE has improved from 20.1% to 25.2%.
High return on capital employed
ROCE of 25.2% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 7.5x the stock trades 49% below its own median of 14.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 49% against revenue growth of 13% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 5.43x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 49% against revenue up 13% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 10.6% to 19.8%. 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 49% 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 81% 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?

Leverage amplifies any setback
Debt/Equity of 5.43x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 49% against revenue up 13%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 4.0% 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.
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 18%✓ 19.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 4.0% CAGR
Latest reported year was 23.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹15 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 22%✓ 25.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

8 good · 2 neutral · 1 weak

Market Cap

₹262 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.5x

Cheap

Cheap against the generic band

P/B Ratio

1.80x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹57.59

Profitable

Profitable on a per-share basis

ROE

19.6%

Strong

Strong capital efficiency

ROCE

25.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

5.43x

High

High leverage

Revenue Growth (YoY)

23.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

56.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.54%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹15 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹433.25

Operating Margin

19.4%

Good

Healthy core-business profitability

Net Margin

15.4%

Good

Strong bottom-line conversion

Current Ratio

3.59

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

48%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

449.0 / 468.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

31.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹191 Cr	₹181 Cr	₹189 Cr	₹215 Cr	+4.0%
EBITDA	₹20 Cr	₹22 Cr	₹26 Cr	₹42 Cr	+27.9%
EBITDA Margin	10.6%	12.2%	13.6%	19.8%	—
PAT (Net Profit)	₹15 Cr	₹15 Cr	₹17 Cr	₹28 Cr	+23.0%
EPS	₹25.26	₹25.34	₹28.45	₹47.01	+23.0%
ROE	16.3%	14.1%	14.3%	19.6%	—
ROCE	20.1%	18.1%	18.3%	25.2%	—
Total Debt	—	—	₹13 Cr	₹8 Cr	—
Free Cash Flow	₹12 Cr	₹13 Cr	₹1 Cr	₹15 Cr	+8.7%

🟢 Revenue has grown at 4.0% a year over 3 years.

🟢 EBITDA has grown at 27.9% a year over 3 years.

🟢 EBITDA Margin has risen from 10.6% to 19.8% over 3 years (+9.1 pts).

🟢 PAT (Net Profit) has grown at 23.0% a year over 3 years.

🟢 EPS has grown at 23.0% a year over 3 years.

🟢 ROE has risen from 16.3% to 19.6% over 3 years (+3.3 pts).

🟢 ROCE has risen from 20.1% to 25.2% over 3 years (+5.1 pts).

🟢 Free Cash Flow has grown at 8.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹179 Cr

Total Liabilities

₹34 Cr

Total Debt

₹8 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹25 Cr

Capex

-₹10 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.4%

Corporate Actions

Dividend Rate

₹11

Ex-Dividend Date

12 Aug 2026

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

3 positive3 general

Narmada Gelatines fixes record date for 110% dividend

scanx.trade, 21 JulCapital return

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

Compare NARMADA GELATINES with

Equitymaster, 26 Sept

Narmada Gelatines consolidated net profit rises 69.32% in the March 2026 quarter

Business Standard, 25 MayResults

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

Narmada Gelatines Q1FY26 net profit rises 64% to ₹8.19 crore

scanx.trade, 12 AugResults

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

Narmada Gelatines Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 15 Oct

Narmada Gelatines shareholders approve all five resolutions at 65th AGM

scanx.trade, 20 Aug

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong16.6/20

🟢Financial HealthStrong13.9/20

🟢GrowthStrong13.1/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive11.8/15

🔴RiskHigh4.3/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 18%19.8%
✓Revenue growth stays above 4% a year4.0% CAGR
✓Free cash flow remains positive₹15 Cr
✓Debt / EBITDA stays below 2x0.2x
✓ROCE stays above 22%25.2%