Southern Petrochemical Industries Corporation Limited

Basic Materials — Agricultural Inputs · NSE

₹60.16−₹0.12 (−0.20%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Southern Petrochemical Industries Corporation Limited engages in the manufacture and sale of fertilizers in India and internationally.

IndustryAgricultural Inputs

SectorBasic Materials

Employees647

Annual revenue₹375 Cr

How does it make money?

Turns over ₹375 Cr a year. Of every ₹100 of sales, about ₹56 reaches shareholders as profit, with ₹94 left at the operating level before interest, tax and depreciation. Each of its 647 employees supports ₹57.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹57.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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 22.1%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 15.4% 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.

Peer median ROE22.3%

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 -28% while net margin moved -2% 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-28%

Margin effect-2%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 10.5% a year
✗ Profit has declined at 11.1% a year
✗ Profit fell 9.8% in the latest year

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

87/ 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

6.0x

3Y Median

9.1x

40 monthly readings · mean 9.7x · range 4.7x–17.7x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 3y median of 9.1x. 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 79% below the peer median of 28.7x.

vs. its own history

Cheap

9.1x median over 40 months · -34%

vs. sector peers

Cheap

28.7x median of 4 peers · -79%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 75.9% to 93.8% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 22.1% 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 30.5% to 15.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.3% to 22.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 75% over 3 years, from ₹401 Cr to ₹703 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 38% against revenue up -28% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 30% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.93 — near-term obligations exceed near-term assets.
🟡Low reported insider holdingOwnership
Reported insider holding is 0.0%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.1% 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 75.9% to 93.8%. 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 34% 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 79% 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?

Sales are being booked faster than collected
Receivables are up 38% against revenue up -28%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 30.5% to 15.4%. 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.
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
2 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

1EBITDA margin holds above 92%✓ 93.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✓ ₹76 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 19%✓ 22.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 9.1x✓ 6.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

8 good · 2 neutral · 1 weak

Market Cap

₹1,225 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.0x

Cheap

Cheap against the generic band

P/B Ratio

0.89x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.08

Profitable

Profitable on a per-share basis

ROE

15.4%

Strong

Strong capital efficiency

ROCE

22.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.51x

Low

Conservative leverage

Revenue Growth (YoY)

8.7%

Modest

Modest growth

Profit Growth (YoY)

-9.8%

Falling

Profits are shrinking

Dividend Yield

3.32%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹76 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

5.8%

Average

Average margins

Net Margin

6.8%

Average

Average bottom-line conversion

Current Ratio

0.93

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

63.3 / 66.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹523 Cr	₹415 Cr	₹441 Cr	₹375 Cr	-10.5%
EBITDA	₹397 Cr	₹299 Cr	₹331 Cr	₹351 Cr	-4.0%
EBITDA Margin	75.9%	72.2%	75.1%	93.8%	—
PAT (Net Profit)	₹301 Cr	₹113 Cr	₹156 Cr	₹211 Cr	-11.1%
EPS	₹14.77	₹5.55	₹7.64	₹10.39	-11.1%
ROE	30.5%	10.5%	13.0%	15.4%	—
ROCE	31.3%	18.2%	21.0%	22.1%	—
Total Debt	₹401 Cr	₹471 Cr	₹722 Cr	₹703 Cr	+20.6%
Free Cash Flow	-₹41 Cr	₹154 Cr	-₹291 Cr	₹76 Cr	—

🔴 Revenue has shrunk at 10.5% a year over 3 years.

🔴 EBITDA has shrunk at 4.0% a year over 3 years.

🟢 EBITDA Margin has risen from 75.9% to 93.8% over 3 years (+17.9 pts).

🔴 PAT (Net Profit) has shrunk at 11.1% a year over 3 years.

🔴 EPS has shrunk at 11.1% a year over 3 years.

🔴 ROE has fallen from 30.5% to 15.4% over 3 years (-15.1 pts).

🔴 ROCE has fallen from 31.3% to 22.1% over 3 years (-9.2 pts).

🔴 Total Debt has grown at 20.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹41 Cr to ₹76 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,498 Cr

Total Liabilities

₹1,128 Cr

Cash & Equivalents

₹94 Cr

Operating Cash Flow

₹395 Cr

Capex

-₹320 Cr

Shareholding (proxy)

Institutional Holding

0.3%

Insider Holding

0.0%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

21 Sept 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

3 mixed3 general

Southern Petrochemicals Industries Corporation Share Price Target 2026 Analyst Forecast Bull and Bear Case

Univest, 01 JulAnalyst view

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

Southern Petrochemicals schedules 55th AGM for September 28, 2026

scanx.trade, 17 Aug

Southern Petrochemical Industries Corporation Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Southern Petrochemicals Industries Corporation Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Southern Petrochemicals clock Q3 consolidated PAT at Rs 54.07 cr

The Economic Times, 14 FebResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Southern Petrochemical Industries Corporation Q1 FY27 Results Pre

Univest, 08 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Profitability · Risk

WeakGrowth

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. 2 high-severity red flags sit above this conclusion and should be read first.

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