Shiv Texchem Limited

Basic Materials — Chemicals · BSE

₹115.00+₹2.75 (+2.45%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Very High

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

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shiv Texchem Limited imports and distributes hydrocarbon-based chemicals in India. Its products include acetyls, alcohol, aromatics, nitriles, monomers, glycols phenolic, ketones, and isocyanates.

IndustryChemicals

SectorBasic Materials

Employees50

Annual revenue₹2,776 Cr

How does it make money?

Turns over ₹2,776 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 50 employees supports ₹55.52 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹55.52 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 20.9% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +148% while net margin moved +95% 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+148%

Margin effect+95%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ 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

61/ 100

Average

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

Valuation

88/ 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

2.3x

2Y Median

5.7x

26 monthly readings · mean 11.3x · range 3.5x–26.0x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 60% below its 2y median of 5.7x. 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 93% below the peer median of 33.8x.

vs. its own history

Cheap

5.7x median over 26 months · -60%

vs. sector peers

Cheap

33.8x median of 3 peers · -93%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.6x

PEG

0.03

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 3.3% to 5.1% over 3 years.
Return on equity is rising
ROE has improved from 13.1% to 19.0%.
High return on capital employed
ROCE of 21.4% 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 Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 113% over 3 years, from ₹329 Cr to ₹701 Cr.
🔴High leverageFinancial
Debt/Equity of 1.71x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 348% against revenue up 148% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹327 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.4% 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 3.3% to 5.1%. 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 60% 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 93% 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?

The debt load needs earnings to hold up
Debt is 4.9x 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 348% against revenue up 148%. 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.
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 27% a year✓ 35.4% CAGR
Latest reported year was 8.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 3%✓ 5.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.9x
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✗ -₹327 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 18%✓ 21.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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 · 3 neutral · 2 weak

Market Cap

₹266 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2.3x

Cheap

Cheap against the generic band

P/B Ratio

0.65x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹49.61

Profitable

Profitable on a per-share basis

ROE

20.9%

Strong

Strong capital efficiency

ROCE

21.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.71x

High

High leverage

Revenue Growth (YoY)

8.7%

Modest

Modest growth

Profit Growth (YoY)

15.7%

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

-₹369 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

6.5%

Average

Average asset productivity

Operating Margin

5.4%

Average

Average margins

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.80

Comfortable

Healthy short-term liquidity

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

113.3 / 112.6

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,118 Cr	₹1,535 Cr	₹2,202 Cr	₹2,776 Cr	+35.4%
EBITDA	₹37 Cr	₹60 Cr	₹89 Cr	₹142 Cr	+57.0%
EBITDA Margin	3.3%	3.9%	4.1%	5.1%	—
PAT (Net Profit)	₹16 Cr	₹30 Cr	₹48 Cr	₹78 Cr	+69.3%
EPS	₹6.92	₹12.97	₹30.67	—	—
ROE	13.1%	15.6%	14.5%	19.0%	—
ROCE	20.2%	23.0%	20.8%	21.4%	—
Total Debt	₹329 Cr	₹297 Cr	₹409 Cr	₹701 Cr	+28.6%
Free Cash Flow	-₹163 Cr	₹58 Cr	-₹116 Cr	-₹327 Cr	—

🟢 Revenue has grown at 35.4% a year over 3 years.

🟢 EBITDA has grown at 57.0% a year over 3 years.

🟢 EBITDA Margin has risen from 3.3% to 5.1% over 3 years (+1.8 pts).

🟢 PAT (Net Profit) has grown at 69.3% a year over 3 years.

🟢 ROE has risen from 13.1% to 19.0% over 3 years (+5.9 pts).

🟢 ROCE has risen from 20.2% to 21.4% over 3 years (+1.2 pts).

🔴 Total Debt has grown at 28.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,483 Cr

Total Liabilities

₹1,072 Cr

Cash & Equivalents

₹175 Cr

Operating Cash Flow

-₹327 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

3.8%

Insider Holding

75.7%

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 mixed5 general

Compare with

Equitymaster, 16 Oct

SHIV TEXCHEM LIMITED Share Price

Upstox, 05 May

Compare with

Equitymaster, 14 Oct

Shiv Texchem Limited Shares Comprehensive Investor Presentation for Analyst Meeting

scanx.trade, 11 MarAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Compare with

Equitymaster, 15 Oct

Shiv Texchem Appoints US Legal Counsel to Seek Removal from OFAC Sanctions List

scanx.trade, 07 Jan

Watch Items

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

DalalBaazaar Thesis

StrongGrowth · Profitability · Valuation

MiddlingBusiness Quality

WeakFinancial Health · 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.

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