Sunshield Chemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹1,026.60−₹8.70 (−0.84%)

DalalBaazaar Score

59 / 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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sunshield Chemicals Limited manufactures and sells specialty chemicals in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees214

Annual revenue₹440 Cr

How does it make money?

Turns over ₹440 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 214 employees supports ₹2.06 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.06 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +80% while net margin moved +20% 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+80%

Margin effect+20%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.33 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

60/ 100

Average

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

Valuation

69/ 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

23.8x

Sector Median

40.4x

median of 4 sector peers

🟢Against its sector it trades 41% below the peer median of 40.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

40.4x median of 4 peers · -41%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.2x

PEG

0.81

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 20.7% to 11.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 22.7% to 16.6% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 41% 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?

Returns on shareholder capital are falling
ROE has dropped from 20.7% to 11.7%. 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 16% a year✓ 21.7% CAGR
Latest reported year was 11.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 14%✓ 16.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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
✓ 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

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹903 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.8x

Fair

Fairly valued against the generic band

P/B Ratio

3.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹43.12

Profitable

Profitable on a per-share basis

ROE

11.7%

Moderate

Moderate capital efficiency

ROCE

16.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

11.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

65.3%

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

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.6%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

3.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

RSI (14)

36.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹244 Cr	₹282 Cr	₹365 Cr	₹440 Cr	+21.7%
EBITDA	₹33 Cr	₹41 Cr	₹36 Cr	₹55 Cr	+18.4%
EBITDA Margin	13.5%	14.7%	9.9%	12.5%	—
PAT (Net Profit)	₹14 Cr	₹19 Cr	₹15 Cr	₹30 Cr	+29.4%
EPS	₹18.32	₹25.27	₹19.34	₹37.15	+26.6%
ROE	20.7%	22.9%	15.2%	11.7%	—
ROCE	22.7%	31.2%	20.8%	16.6%	—
Total Debt	₹77 Cr	₹85 Cr	₹100 Cr	—	—
Free Cash Flow	₹6 Cr	₹1 Cr	-₹2 Cr	-₹11 Cr	—

🟢 Revenue has grown at 21.7% a year over 3 years.

🟢 EBITDA has grown at 18.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.5% to 12.5% over 3 years (-1.1 pts).

🟢 PAT (Net Profit) has grown at 29.4% a year over 3 years.

🟢 EPS has grown at 26.6% a year over 3 years.

🔴 ROE has fallen from 20.7% to 11.7% over 3 years (-9.0 pts).

🔴 ROCE has fallen from 22.7% to 16.6% over 3 years (-6.1 pts).

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹305 Cr

Total Liabilities

₹53 Cr

Cash & Equivalents

₹13 Cr

Operating Cash Flow

₹10 Cr

Capex

-₹20 Cr

Shareholding (proxy)

Institutional Holding

3.8%

Insider Holding

74.1%

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 positive1 mixed4 general

Sunshield Chemicals Ltd is Rated Buy

MarketsMojo, 17 Oct

Sunshield Chemicals (SUNSHIEL) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Sunshield Chemicals Share Price: valuation and sector view

Univest, 07 Sept

Sunshield Chemicals Reports Q1 Revenue Of 1.27B Rupees As Net Profit Reaches 135M Rupees

Sahi, 11 AugResults

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

Sunshield Chemicals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Sunshield Chemicals Q1 Results: EBITDA Jumps 63%, Net Profit Surges 98% YoY

scanx.trade, 11 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Profitability · Valuation

WeakRisk

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

1 of 4 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑