Shankar Lal Rampal Dye-Chem Limited

Basic Materials — Specialty Chemicals · NSE

₹38.82+₹0.91 (+2.40%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by 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 Shankar Lal Rampal Dye-Chem Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Shankar Lal Rampal Dye-Chem Limited engages in trading of dyes, chemicals, and allied products.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees14

Annual revenue₹465 Cr

How does it make money?

Turns over ₹465 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 14 employees supports ₹33.20 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin4.2%

Net margin2.9%

Revenue / employee₹33.20 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 15.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE15.5%

ROE11.0%

Peer median ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +44% while net margin moved -41% 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+44%

Margin effect-41%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 12.8% is steady
✗ Profit has declined at 5.3% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

80/ 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

13.7x

2Y Median

37.5x

26 monthly readings · mean 42.7x · range 18.3x–84.0x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 63% below its 2y median of 37.5x. 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 66% below the peer median of 40.4x.

vs. its own history

Cheap

37.5x median over 26 months · -63%

vs. sector peers

Cheap

40.4x median of 4 peers · -66%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.7x

P/B

2.02x

EV/EBITDA

14.2x

PEG

—

Dividend Yield

0.13%

What's Good / What's Bad

🟢 What's Going Well3

Valuation below its historical average
At 13.7x the stock trades 63% below its own median of 37.5x.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 6.9% to 4.2% over 3 years.
Debt is rising
Total debt is up 60% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 17.2% to 11.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.2% to 15.5% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 60% over 3 years, from ₹16 Cr to ₹25 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹7 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.8 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 63% 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 66% 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?

Margins are being competed away
EBITDA margin has fallen from 6.9% to 4.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 17.2% to 11.0%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 12.8% CAGR
Latest reported year was 10.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

6 good · 4 neutral · 1 weak

Market Cap

₹248 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.7x

Cheap

Cheap against the generic band

P/B Ratio

2.02x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.83

Profitable

Profitable on a per-share basis

ROE

11.0%

Moderate

Moderate capital efficiency

ROCE

15.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

10.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

118.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.13%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹38.82

Operating Margin

9.4%

Average

Average margins

Net Margin

3.9%

Average

Average bottom-line conversion

Current Ratio

4.69

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.55

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

38.5 / 39.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹323 Cr	₹288 Cr	₹402 Cr	₹465 Cr	+12.8%
EBITDA	₹22 Cr	₹10 Cr	₹16 Cr	₹19 Cr	-4.8%
EBITDA Margin	6.9%	3.4%	4.1%	4.2%	—
PAT (Net Profit)	₹16 Cr	₹6 Cr	₹11 Cr	₹13 Cr	-5.3%
EPS	₹2.49	₹1.02	₹1.78	₹2.11	-5.4%
ROE	17.2%	6.6%	10.4%	11.0%	—
ROCE	24.2%	9.7%	14.9%	15.5%	—
Total Debt	₹16 Cr	₹6 Cr	₹18 Cr	₹25 Cr	+17.0%
Free Cash Flow	₹14 Cr	₹5 Cr	-₹13 Cr	-₹7 Cr	—

🟢 Revenue has grown at 12.8% a year over 3 years.

🔴 EBITDA has shrunk at 4.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 6.9% to 4.2% over 3 years (-2.8 pts).

🔴 PAT (Net Profit) has shrunk at 5.3% a year over 3 years.

🔴 EPS has shrunk at 5.4% a year over 3 years.

🔴 ROE has fallen from 17.2% to 11.0% over 3 years (-6.2 pts).

🔴 ROCE has fallen from 24.2% to 15.5% over 3 years (-8.7 pts).

🔴 Total Debt has grown at 17.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹14 Cr to -₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹157 Cr

Total Liabilities

₹34 Cr

Total Debt

₹25 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹7 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.5%

Corporate Actions

Dividend Rate

₹0.05

Ex-Dividend Date

11 Sept 2026

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

1 positive2 mixed3 general

Shankar Lal Rampal Dye-Chem (NSE:SRD): What Does Its Reg 74(5) Filing for Q2 FY27 Mean?

Kalkine India, 15 OctResults

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

Shankar Lal Rampal Dye-Chem receives police notice for document production

scanx.trade, 07 Aug

Shankar Lal Rampal Dye-Chem Q1 FY27 Results Preview

Univest, 10 JulResults

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

Shankar Lal Rampal Dye-Chem NSE:SRD Trading Window Closure

Kalkine India, 25 Sept

Shankar Lal Rampal Dye-Chem Share Price Forecast to 2030

Univest, 27 Jul

Shankar Lal Rampal Dye-Chem Q1 Results: Net profit up 117%, revenue rises 11%

scanx.trade, 15 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak8.8/20

🟢Financial HealthStrong13/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak6/15

🟢ValuationAttractive11.8/15

🔴RiskHigh4.4/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 10% a year12.8% CAGR
✓EBITDA margin holds above 2%4.2%
✗Free cash flow remains positive-₹7 Cr
✓Debt / EBITDA stays below 2x1.3x
✓ROCE stays above 12%15.5%