SK Minerals & Additives Limited

Basic Materials — Specialty Chemicals · BSE

₹430.50+₹8.50 (+2.01%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, 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, 6:08 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 SK Minerals & Additives Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

SK Minerals & Additives Limited manufactures and sells specialty chemicals and additives in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees114

Annual revenue₹318 Cr

How does it make money?

Turns over ₹318 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 114 employees supports ₹2.79 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.4%

Net margin5.7%

Revenue / employee₹2.79 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?Some evidence

ROCE of 33.0% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE33.0%

ROE22.5%

Peer median ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 0 years revenue moved +0% while net margin moved +0% 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+0%

Margin effect+0%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

59/ 100

Fair

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

23.1x

Sector Median

40.4x

median of 4 sector peers

🟢Against its sector it trades 43% below the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

40.4x median of 4 peers · -43%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

23.1x

P/B

6.39x

EV/EBITDA

18.9x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

High return on capital employed
ROCE of 33.0% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹94 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 33.0% 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.
Cheaper than its peers
It trades 43% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹94 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 30%✓ 33.0%
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

5 good · 4 neutral · 2 weak

Market Cap

₹527 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.1x

Fair

Fairly valued against the generic band

P/B Ratio

6.39x

Rich

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

EPS (TTM)

₹18.6

Profitable

Profitable on a per-share basis

ROE

22.5%

Strong

Strong capital efficiency

ROCE

33.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.25x

Moderate

Moderate leverage

Revenue Growth (YoY)

88.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

65.6%

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

-₹94 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹430.5

Operating Margin

10.2%

Average

Average margins

Net Margin

5.8%

Average

Average bottom-line conversion

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

458.0 / 453.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

25.9

Oversold zone

Financial Trend (Annual)

Year	Revenue	Gross Profit	Net Income
2023	—	—	—
2024	—	—	—
2025	—	₹40 Cr	—
2026	₹318 Cr	₹62 Cr	₹18 Cr

Balance Sheet & Cash Flow — FY2026

Total Assets

₹186 Cr

Total Liabilities

₹106 Cr

Total Debt

₹100 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹75 Cr

Capex

-₹19 Cr

Shareholding (proxy)

Institutional Holding

1.1%

Insider Holding

79.8%

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

SK Minerals & Additives Secures Approval for ₹218.35 Crore Convertible Warrants Issue

Sahi, 10 Jun

SK Minerals & Additives Ltd Peer Comparison – Compare with Others

Value Research, 30 Aug

SK Minerals & Additives Limite Share Price - Live SKM Stock Price & Chart

Upstox, 05 May

SK Minerals approves ₹21.8 crore preferential warrant issue

scanx.trade, 24 Aug

SKM Share Price near 52-week high, fundamentals

Univest, 18 Sept

SK Minerals & Additives (BSE:544584) - Stock Analysis

Simply Wall Street, 03 Dec

Watch Items

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

🟢Business QualityStrong13/20

🟡Financial HealthAdequate9.9/20

🟡GrowthModest10/20

🟢ProfitabilityStrong11.5/15

🟡ValuationFair6.8/15

🔴RiskHigh2.4/10

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.

This thesis breaks if

✓EBITDA margin holds above 8%10.4%
✗Debt / EBITDA falls below 3x3.0x
✗Free cash flow remains positive-₹94 Cr
✓ROCE stays above 30%33.0%