SP Refractories Limited

Sector n/a · NSE

₹258.00+₹8.25 (+3.30%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, but sales are shrinking. Debt 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

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

How does it make money?

Turns over ₹28 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Some evidence

ROCE of 28.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +3% while net margin moved +455% 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+3%

Margin effect+455%

DalalBaazaar Score

64/ 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

Quality vs. Valuation

Company Quality

72/ 100

Good

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

Valuation

60/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

8.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 5.7% to 19.1% over 3 years.
Debt is being paid down
Total debt is down 80% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 6.9% to 21.9%.
Return on capital is rising
ROCE has improved from 11.2% to 28.1%.
High return on capital employed
ROCE of 28.1% 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 Attention0

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

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 6.63x — 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.
🔴Inventory building faster than salesFinancial
Inventory up 79% against revenue up 3% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.1% 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 5.7% to 19.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 80% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 6.63x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 1.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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
3 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 17%✓ 19.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.1% CAGR
Latest reported year was -6.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 25%✓ 28.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹46 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

21.9%

Strong

Strong capital efficiency

ROCE

28.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

6.63x

High

High leverage

Revenue Growth (YoY)

-6.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

68.8%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

32.9%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

12.5%

Good

Strong bottom-line conversion

Current Ratio

8.10

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

130.7 / 113.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

81.3

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹27 Cr	₹29 Cr	₹30 Cr	₹28 Cr	+1.1%
EBITDA	₹2 Cr	₹3 Cr	₹4 Cr	₹5 Cr	+51.3%
EBITDA Margin	5.7%	10.3%	11.9%	19.1%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹2 Cr	₹4 Cr	+79.0%
EPS	₹3.44	₹8.71	₹11.68	—	—
ROE	6.9%	14.8%	16.6%	21.9%	—
ROCE	11.2%	20.5%	22.3%	28.1%	—
Total Debt	₹5 Cr	₹5 Cr	₹4 Cr	₹1 Cr	-41.8%
Free Cash Flow	-₹1 Cr	₹0 Cr	₹1 Cr	₹0 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.1% a year).

🟢 EBITDA has grown at 51.3% a year over 3 years.

🟢 EBITDA Margin has risen from 5.7% to 19.1% over 3 years (+13.4 pts).

🟢 PAT (Net Profit) has grown at 79.0% a year over 3 years.

🟢 ROE has risen from 6.9% to 21.9% over 3 years (+15.0 pts).

🟢 ROCE has risen from 11.2% to 28.1% over 3 years (+16.8 pts).

🟢 Total Debt has shrunk at 41.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹19 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹1 Cr

Recent News

6 general

SP Refractories Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 06 Oct

SP Refractories Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

NSE seeks clarification over unusual trading in several stocks and the Piramal Pharma news

Traders Union, 05 Oct

Orient Ceratech Share Price News: Price, Valuation, Peers

Univest, 20 Aug

SP Refractories Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 21 Sept

SP Refractories Ltd.: A Leading Player in High-Quality Refractory Material Manufacturing

Business Standard, 31 Jul

Watch Items

Revenue growth is negative (-6.9%) 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.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability

MiddlingGrowth · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑