Shivam Chemicals Limited

Basic Materials — Chemicals · BSE

₹154.90+₹5.90 (+3.96%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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

In simple words: Strong business and financial position, 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, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shivam Chemicals Limited engages in the wholesale trading and distribution of feed ingredients in India.

IndustryChemicals

SectorBasic Materials

Employees14

Annual revenue₹284 Cr

How does it make money?

Turns over ₹284 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 14 employees supports ₹20.30 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹20.30 Cr

Who are its competitors?

The closest listed comparisons in its industry are 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 21.3% 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 ROE15.4%

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 +82% while net margin moved -9% 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+82%

Margin effect-9%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -0.28 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

42/ 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.

Historical Valuation

Current P/E

42.6x

3Y Median

74.7x

32 monthly readings · mean 72.0x · range 21.6x–122.9x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 43% below its 3y median of 74.7x. 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 26% above the peer median of 33.8x.

vs. its own history

Cheap

74.7x median over 32 months · -43%

vs. sector peers

Expensive

33.8x median of 3 peers · +26%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

25.8x

PEG

2.31

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 21.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.9% to 14.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.8% to 21.3% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 63% over 3 years, from ₹14 Cr to ₹22 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 128% against revenue up 82% — 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 21.3% 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.
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.
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 128% against revenue up 82%. 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 26% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 26.9% to 14.9%. 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.
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 17% a year✓ 22.0% CAGR
Latest reported year was 17.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 18%✓ 21.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

6 good · 2 neutral · 3 weak

Market Cap

₹263 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

42.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.32x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹3.64

Profitable

Profitable on a per-share basis

ROE

16.1%

Strong

Strong capital efficiency

ROCE

21.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.53x

Low

Conservative leverage

Revenue Growth (YoY)

17.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

164.4%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

7.5%

Average

Average asset productivity

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

2.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.28

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

136.8 / 116.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

70.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹157 Cr	₹147 Cr	₹224 Cr	₹284 Cr	+22.0%
EBITDA	₹5 Cr	₹4 Cr	₹5 Cr	₹11 Cr	+26.7%
EBITDA Margin	3.5%	2.6%	2.4%	3.9%	—
PAT (Net Profit)	₹4 Cr	₹1 Cr	₹2 Cr	₹6 Cr	+18.4%
EPS	₹2.2	₹0.71	₹1.26	—	—
ROE	26.9%	8.0%	5.9%	14.9%	—
ROCE	25.8%	13.7%	10.6%	21.3%	—
Total Debt	₹14 Cr	₹17 Cr	₹15 Cr	₹22 Cr	+17.8%
Free Cash Flow	-₹5 Cr	₹2 Cr	-₹16 Cr	₹1 Cr	—

🟢 Revenue has grown at 22.0% a year over 3 years.

🟢 EBITDA has grown at 26.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.9% over 3 years.

🟢 PAT (Net Profit) has grown at 18.4% a year over 3 years.

🔴 ROE has fallen from 26.9% to 14.9% over 3 years (-12.1 pts).

🔴 ROCE has fallen from 25.8% to 21.3% over 3 years (-4.4 pts).

🔴 Total Debt has grown at 17.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹71 Cr

Total Liabilities

₹30 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.5%

Peer Comparison

Company	P/E	ROE
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

Shivam Chemicals Share Price near 52-week high, valuation

Univest, 14 Oct

Shivam Chemicals starts feed-grade DCP production at Dahej facility

scanx.trade, 02 Oct

SHIVAM CHEMICALS LIMITED Share Price

Upstox, 05 May

Shivam Chemicals Share Price rise puts valuation in focus

Univest, 30 SeptPrice 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.

Shivam Chemicals FY26 Net Profit Doubles to Rs 5.05 Crore

Whalesbook, 30 Aug

Shivam Chemicals FY26 revenue up 27% to ₹28,423 lakh; AGM on Sep 21

scanx.trade, 21 SeptResults

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

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability

WeakValuation · 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.

1 of 5 tripwires tripped — Debt / EBITDA stays below 2x · see Key things to watch ↑