Shlokka Dyes Limited

Basic Materials — Specialty Chemicals · BSE

₹34.00+₹2.48 (+7.87%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently 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 Shlokka Dyes Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Shlokka Dyes Limited manufactures and sells reactive dyes in India. It offers direct, basic, vat, digital printing, and paper dyes for various industries, such as textiles, leather, paper, and paints, as well as manufactures dye intermediates.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees24

Annual revenue₹80 Cr

How does it make money?

Turns over ₹80 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 24 employees supports ₹3.32 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.32 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?Little sign of one

Returns on capital of 9.1% 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.

Peer median ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 1 years revenue moved -20% while net margin moved -38% 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-20%

Margin effect-38%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 20.3% a year
✗ Profit has declined at 50.6% a year
✗ Profit fell 51.4% in the latest year

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

64/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

14.7x

1.2Y Median

5.7x

14 monthly readings · mean 7.0x · range 4.6x–14.1x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 159% above its 1.2y median of 5.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 64% below the peer median of 40.4x.

vs. its own history

Expensive

5.7x median over 14 months · +159%

vs. sector peers

Cheap

40.4x median of 4 peers · -64%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.0x

PEG

—

Red Flags

3 items require attention · 3 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹48 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 51% over 1 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 1 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 64% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 18.6% to 15.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 159% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 13%✓ 15.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹48 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.9x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 9.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹73 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.7x

Cheap

Cheap against the generic band

P/B Ratio

0.85x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.32

Profitable

Profitable on a per-share basis

ROE

8.8%

Moderate

Moderate capital efficiency

ROCE

9.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.31x

Low

Conservative leverage

Revenue Growth (YoY)

-16.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-51.4%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹51 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

4.4%

Average

Average asset productivity

Operating Margin

9.8%

Average

Average margins

Net Margin

6.1%

Average

Average bottom-line conversion

Current Ratio

3.16

Comfortable

Healthy short-term liquidity

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

30.1 / 26.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

60.5

Neutral momentum

Financial Trend (2-Year)

Metric	FY25	FY26	1Y CAGR
Revenue	₹100 Cr	₹80 Cr	-20.3%
EBITDA	₹19 Cr	₹12 Cr	-34.6%
EBITDA Margin	18.6%	15.3%	—
PAT (Net Profit)	₹10 Cr	₹5 Cr	-50.6%
Free Cash Flow	₹4 Cr	-₹48 Cr	—

🔴 Revenue has shrunk at 20.3% a year over 1 years.

🔴 EBITDA has shrunk at 34.6% a year over 1 years.

🔴 EBITDA Margin has fallen from 18.6% to 15.3% over 1 years (-3.3 pts).

🔴 PAT (Net Profit) has shrunk at 50.6% a year over 1 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹48 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹131 Cr

Total Liabilities

₹46 Cr

Total Debt

₹27 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹47 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

2.4%

Insider Holding

75.5%

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

6 general

Shlokka Dyes shares list at 1% discount over IPO price on BSE SME platform

The Economic Times, 17 Oct

Shlokka Dyes IPO Allotment Status Online: Check Steps To Verify Status

Groww, 14 Oct

Shlokka Dyes IPO listed at a 1.10% Discount on BSE at ₹90

IPO Watch, 17 Oct

Shlokka Dyes schedules 5th AGM for September 24, 2026

scanx.trade, 24 Sept

Shlokka Dyes Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Shlokka Dyes Ltd Peer Comparison – Compare with Others

Value Research, 30 Aug

Watch Items

Revenue growth is negative (-16.8%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

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