Sumitomo Chemical India Limited

Basic Materials — Agricultural Inputs · NSE

₹405.00+₹0.15 (+0.04%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Sumitomo Chemical India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sumitomo Chemical India Limited engages in the manufacture and sale of household and public health insecticides, agricultural pesticides, and animal nutrition products in India and internationally.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,622

Annual revenue₹3,209 Cr

How does it make money?

Turns over ₹3,209 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation. Each of its 1,622 employees supports ₹1.98 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin25.4%

Net margin16.9%

Revenue / employee₹1.98 Cr

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.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 16.0% 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.

ROCE21.0%

ROE16.0%

Peer median ROE22.3%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 12.7% and earnings to grow about 15.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.7%

Est. earnings growth+15.0%

Analysts8

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -8% while net margin moved +17% 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-8%

Margin effect+17%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 2.6% a year
✗ Profit CAGR of only 2.6%

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

46/ 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

34.9x

3Y Median

47.6x

40 monthly readings · mean 52.1x · range 34.6x–87.7x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 27% below its 3y median of 47.6x. 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 21% above the peer median of 28.7x.

vs. its own history

Cheap

47.6x median over 40 months · -27%

vs. sector peers

Expensive

28.7x median of 4 peers · +21%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

34.9x

P/B

5.96x

EV/EBITDA

24.8x

PEG

13.24

Dividend Yield

0.32%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 20.0% to 25.4% over 3 years.
Cash generation is improving
Free cash flow is up 49% over 3 years.
High return on capital employed
ROCE of 21.0% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 34.9x the stock trades 27% below its own median of 47.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 86% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 21.1% to 16.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.0% to 21.0% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 86% over 3 years, from ₹34 Cr to ₹63 Cr.
🔴High leverageFinancial
Debt/Equity of 1.86x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.0% 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.
Margin expansion has further to run
EBITDA margin has risen from 20.0% to 25.4%. 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 27% 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.
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 1.86x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 21% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 21.1% to 16.0%. 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
Small 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 23%✓ 25.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹401 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 18%✓ 21.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 47.6x✓ 34.9x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

10 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹20,215 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

34.9x

Fair

Fairly valued against the generic band

P/B Ratio

5.96x

Rich

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

EPS (TTM)

₹11.61

Profitable

Profitable on a per-share basis

ROE

16.0%

Strong

Strong capital efficiency

ROCE

21.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.86x

High

High leverage

Revenue Growth (YoY)

0.6%

Modest

Modest growth

Profit Growth (YoY)

20.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.32%

Modest

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

Free Cash Flow

₹401 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹405

P/E (Forward)

27.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

20.3%

Good

Healthy core-business profitability

Net Margin

17.9%

Good

Strong bottom-line conversion

Current Ratio

3.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

20%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

428.8 / 481.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

22.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,473 Cr	₹2,818 Cr	₹3,119 Cr	₹3,209 Cr	-2.6%
EBITDA	₹694 Cr	₹550 Cr	₹715 Cr	₹815 Cr	+5.5%
EBITDA Margin	20.0%	19.5%	22.9%	25.4%	—
PAT (Net Profit)	₹502 Cr	₹370 Cr	₹505 Cr	₹543 Cr	+2.6%
EPS	₹10.06	₹7.4	₹10.13	₹10.88	+2.6%
ROE	21.1%	15.1%	17.4%	16.0%	—
ROCE	27.0%	20.2%	22.8%	21.0%	—
Total Debt	₹34 Cr	₹30 Cr	₹52 Cr	₹63 Cr	+23.1%
Free Cash Flow	₹270 Cr	₹693 Cr	₹422 Cr	₹401 Cr	+14.2%

🔴 Revenue has shrunk at 2.6% a year over 3 years.

🟢 EBITDA has grown at 5.5% a year over 3 years.

🟢 EBITDA Margin has risen from 20.0% to 25.4% over 3 years (+5.4 pts).

🟢 PAT (Net Profit) has grown at 2.6% a year over 3 years.

🟢 EPS has grown at 2.6% a year over 3 years.

🔴 ROE has fallen from 21.1% to 16.0% over 3 years (-5.1 pts).

🔴 ROCE has fallen from 27.0% to 21.0% over 3 years (-6.1 pts).

🔴 Total Debt has grown at 23.1% a year over 3 years.

🟢 Free Cash Flow has grown at 14.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,474 Cr

Total Liabilities

₹1,080 Cr

Total Debt

₹63 Cr

Cash & Equivalents

₹69 Cr

Operating Cash Flow

₹446 Cr

Capex

-₹44 Cr

Shareholding (proxy)

Institutional Holding

9.6%

Insider Holding

75.5%

Corporate Actions

Dividend Rate

₹1.3

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

8 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹586.13

+44.7% vs CMP

Target Range

₹450 – ₹650

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

5 mixed1 general

Sumitomo Chemical India (NSEI:SUMICHEM) Stock Forecast & Analyst Predictions

Simply Wall Street, 14 OctAnalyst view

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

Sumitomo Chemical India stock surges as parent’s semiconductor JV plans excite investors

Indiatimes, 07 JulPartnership

🟡Mixed / dependsA partnership, whose value depends entirely on terms that a headline will not carry. Worth reading the filing before assuming either way.

Sumitomo Chemical shares soar 11%, record biggest single-day surge in nearly 2 years. Here’s why

The Economic Times, 03 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Sumitomo Chemical India hosts analyst meet on Aug 19 in Mumbai

scanx.trade, 09 AugAnalyst view

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

Sumitomo Chemical India shares zoom nearly 16%; here is why

Business Today, 03 Jul

Sumitomo Chemical India Soars 14% on Japan JV News

Equitypandit, 03 JulPartnership

🟡Mixed / dependsA partnership, whose value depends entirely on terms that a headline will not carry. Worth reading the filing before assuming either way.

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 QualityStrong15.2/20

🟡Financial HealthAdequate12.5/20

🔴GrowthWeak4.8/20

🟡ProfitabilityModerate9.5/15

🟡ValuationFair7.9/15

🟡RiskModerate5.7/10

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

This thesis breaks if

✓EBITDA margin holds above 23%25.4%
✓Free cash flow remains positive₹401 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 18%21.0%
✓Valuation vs its own median of 47.6x34.9x today