The Sukhjit Starch & Chemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹142.10−₹1.74 (−1.21%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 The Sukhjit Starch & Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

The Sukhjit Starch & Chemicals Limited, an agro-processing company, engages in the production and sale of starch and its derivatives in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees1,210

Annual revenue₹1,432 Cr

How does it make money?

Turns over ₹1,432 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 1,210 employees supports ₹1.18 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin6.0%

Net margin1.9%

Revenue / employee₹1.18 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?Little sign of one

Returns on capital of 8.8% 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.

ROCE8.8%

ROE4.8%

Peer median ROE22.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -1% while net margin moved -57% 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-1%

Margin effect-57%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.3% a year
✗ Profit has declined at 24.7% a year

Quality vs. Valuation

Company Quality

30/ 100

Weak

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

Valuation

74/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

13.0x

3Y Median

12.9x

40 monthly readings · mean 13.4x · range 9.7x–18.4x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 12.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 68% below the peer median of 40.4x.

vs. its own history

Fair

12.9x median over 40 months · +1%

vs. sector peers

Cheap

40.4x median of 4 peers · -68%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.0x

P/B

0.78x

EV/EBITDA

9.2x

PEG

—

Dividend Yield

0.70%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 10.3% to 6.0% over 3 years.
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 13.6% to 4.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.1% to 8.8% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 69% against revenue growth of -1% — stock may not be moving.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Inventory building faster than salesFinancial
Inventory up 69% against revenue up -1% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 57% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 68% 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 10.3% to 6.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 13.6% to 4.8%. 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

1EBITDA margin holds above 4%✓ 6.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.0x
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✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 8.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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 · 5 neutral · 2 weak

Market Cap

₹444 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.0x

Cheap

Cheap against the generic band

P/B Ratio

0.78x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.94

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

8.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.61x

Moderate

Moderate leverage

Revenue Growth (YoY)

7.2%

Modest

Modest growth

Profit Growth (YoY)

143.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.70%

Modest

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

Free Cash Flow

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹142.1

Operating Margin

5.4%

Average

Average margins

Net Margin

2.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.59

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

152.7 / 157.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

19.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,447 Cr	₹1,375 Cr	₹1,498 Cr	₹1,432 Cr	-0.3%
EBITDA	₹149 Cr	₹131 Cr	₹115 Cr	₹86 Cr	-16.8%
EBITDA Margin	10.3%	9.5%	7.7%	6.0%	—
PAT (Net Profit)	₹63 Cr	₹50 Cr	₹40 Cr	₹27 Cr	-24.7%
EPS	₹20.28	₹15.99	₹12.79	₹8.65	-24.7%
ROE	13.6%	9.9%	7.4%	4.8%	—
ROCE	17.1%	14.9%	11.4%	8.8%	—
Total Debt	₹332 Cr	₹338 Cr	₹299 Cr	₹345 Cr	+1.3%
Free Cash Flow	₹4 Cr	₹35 Cr	₹28 Cr	-₹11 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.3% a year).

🔴 EBITDA has shrunk at 16.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 10.3% to 6.0% over 3 years (-4.3 pts).

🔴 PAT (Net Profit) has shrunk at 24.7% a year over 3 years.

🔴 EPS has shrunk at 24.7% a year over 3 years.

🔴 ROE has fallen from 13.6% to 4.8% over 3 years (-8.8 pts).

🔴 ROCE has fallen from 17.1% to 8.8% over 3 years (-8.3 pts).

🟡 Total Debt has been broadly flat over 3 years (1.3% a year).

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,089 Cr

Total Liabilities

₹522 Cr

Total Debt

₹345 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.7%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

20 Aug 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

2 mixed4 general

Sukhjit Starch and Chemicals Share: Bull Case vs Bear Case for 2026

Univest, 25 Sept

Sukhjit Starch resubmits Q1FY27 results after technical filing glitch

scanx.trade, 29 JulResults

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

Sukhjit Starch Stock Falls Over 7% After Q1 Results

Kalkine India, 29 JulResults

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

Sukhjit Starch & Chemicals Clarifies Recent Stock Price Movement to Exchanges

scanx.trade, 03 Mar

Sukhjit Starch & Chemicals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Sukhjit Starch & Chemicals (SUKHJITS.NS) Holds Steady at ₹160.5 With a Modest 0.32% Gain - Social Sentiment

siam.in, 14 Sept

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.
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 QualityWeak5.9/20

🟡Financial HealthAdequate9.7/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive11.8/15

🟡RiskModerate5.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%6.0%
✗Debt / EBITDA falls below 3x4.0x
✗Free cash flow remains positive-₹11 Cr
✗Interest cover stays above 3x2.2x
✓ROCE stays above 8%8.8%