Tamilnadu Petroproducts Limited

Basic Materials — Specialty Chemicals · NSE

₹123.10+₹3.74 (+3.13%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, 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, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Tamilnadu Petroproducts Limited, together with its subsidiaries, manufactures and sells petrochemical products in India.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees394

Annual revenue₹1,464 Cr

How does it make money?

Turns over ₹1,464 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 394 employees supports ₹3.72 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.72 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?Little sign of one

Returns on capital of 11.3% 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.

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 -32% while net margin moved +52% 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-32%

Margin effect+52%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 12.0% a year
✗ Profit CAGR of only 1.1%

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

73/ 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

7.8x

3Y Median

13.4x

40 monthly readings · mean 12.9x · range 7.4x–19.1x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 42% below its 3y median of 13.4x. 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 81% below the peer median of 40.4x.

vs. its own history

Cheap

13.4x median over 40 months · -42%

vs. sector peers

Cheap

40.4x median of 4 peers · -81%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.5x

PEG

6.80

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.9% to 11.1% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 14.3% to 11.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 509% over 3 years, from ₹76 Cr to ₹465 Cr.
🔴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 54% against revenue up -32% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹357 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.9% to 11.1%. 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 42% 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 81% 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?

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 9%✓ 11.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹357 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✓ 11.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 13.4x✓ 7.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

₹1,108 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.8x

Cheap

Cheap against the generic band

P/B Ratio

1.09x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹15.82

Profitable

Profitable on a per-share basis

ROE

9.6%

Moderate

Moderate capital efficiency

ROCE

11.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.46x

Low

Conservative leverage

Revenue Growth (YoY)

68.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

127.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.22%

Modest

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

Free Cash Flow

-₹357 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.7%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

1.60

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

65%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

123.9 / 121.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,147 Cr	₹1,665 Cr	₹1,823 Cr	₹1,464 Cr	-12.0%
EBITDA	₹148 Cr	₹109 Cr	₹90 Cr	₹162 Cr	+3.0%
EBITDA Margin	6.9%	6.5%	4.9%	11.1%	—
PAT (Net Profit)	₹94 Cr	₹50 Cr	₹58 Cr	₹97 Cr	+1.1%
EPS	₹10.47	₹5.56	₹6.49	₹10.83	+1.1%
ROE	11.5%	5.8%	6.4%	9.6%	—
ROCE	14.3%	7.4%	7.4%	11.3%	—
Total Debt	₹76 Cr	₹18 Cr	₹135 Cr	₹465 Cr	+82.7%
Free Cash Flow	₹2 Cr	₹116 Cr	-₹180 Cr	-₹357 Cr	—

🔴 Revenue has shrunk at 12.0% a year over 3 years.

🟢 EBITDA has grown at 3.0% a year over 3 years.

🟢 EBITDA Margin has risen from 6.9% to 11.1% over 3 years (+4.1 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.1% a year).

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

🔴 ROE has fallen from 11.5% to 9.6% over 3 years (-1.9 pts).

🔴 ROCE has fallen from 14.3% to 11.3% over 3 years (-3.0 pts).

🔴 Total Debt has grown at 82.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹357 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,700 Cr

Total Liabilities

₹682 Cr

Cash & Equivalents

₹203 Cr

Operating Cash Flow

-₹100 Cr

Capex

-₹257 Cr

Shareholding (proxy)

Institutional Holding

5.5%

Insider Holding

56.6%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

17 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

2 positive4 general

Tamilnadu Petroproducts Share Price

Upstox, 16 Oct

Tamilnadu Petroproducts Share Price Outlook: Where It Could Be in 3 Years

Univest, 03 Aug

Tamilnadu Petroproducts Ltd. Peer Comparison – Compare with Others

Value Research, 27 Aug

Tamil Nadu Petro Products sets dividend record date for Sep 17

scanx.trade, 11 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Tamil Nadu Petro Products consolidated net profit rises 127.26% in the June 2026 quarter

Business Standard, 11 AugResults

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

Is Tamilnadu Petroproducts Limited's (NSE:TNPETRO) Stock Price Struggling As A Result Of Its Mixed Financials?

Simply Wall Street, 12 Nov

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑