Universal Starch-Chem Allied Limited

Basic Materials — Agricultural Inputs · BSE

₹204.00+₹8.55 (+4.37%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:05 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

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

What does this company do?

Universal Starch-Chem Allied Limited manufactures starch for various industries in India.

IndustryAgricultural Inputs

SectorBasic Materials

Employees376

Annual revenue₹489 Cr

How does it make money?

Turns over ₹489 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 376 employees supports ₹1.30 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin7.1%

Net margin2.7%

Revenue / employee₹1.30 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?Some evidence

ROCE of 20.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE20.8%

ROE15.9%

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 -5% while net margin moved +135% 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-5%

Margin effect+135%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.03 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

88/ 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

4.5x

3Y Median

12.3x

40 monthly readings · mean 13.7x · range 6.0x–26.9x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 63% below its 3y median of 12.3x. 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 84% below the peer median of 28.7x.

vs. its own history

Cheap

12.3x median over 40 months · -63%

vs. sector peers

Cheap

28.7x median of 4 peers · -84%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

4.5x

P/B

1.04x

EV/EBITDA

4.2x

PEG

0.15

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 3.8% to 7.1% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 10.1% to 15.9%.
Return on capital is rising
ROCE has improved from 14.0% to 20.8%.
High return on capital employed
ROCE of 20.8% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 4.5x the stock trades 63% below its own median of 12.3x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 25% against revenue growth of -5% — customers are taking longer to pay.

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.
🟡Receivables growing faster than salesFinancial
Receivables up 25% against revenue up -5% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.8% 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 3.8% to 7.1%. 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 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 84% 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?

Sales are being booked faster than collected
Receivables are up 25% against revenue up -5%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 5%✓ 7.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✓ 3.4x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹15 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 20.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

8 good · 3 neutral · 0 weak

Market Cap

₹86 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.5x

Cheap

Cheap against the generic band

P/B Ratio

1.04x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹44.97

Profitable

Profitable on a per-share basis

ROE

15.9%

Strong

Strong capital efficiency

ROCE

20.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.73x

Moderate

Moderate leverage

Revenue Growth (YoY)

21.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

308.6%

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

₹15 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹204

Operating Margin

3.7%

Weak

Thin margins leave little room for error

Net Margin

3.7%

Average

Average bottom-line conversion

Current Ratio

1.03

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.03

Defensive

Steadier than the market

52W Range Position

86%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

202.0 / 196.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹516 Cr	₹527 Cr	₹491 Cr	₹489 Cr	-1.8%
EBITDA	₹20 Cr	₹23 Cr	₹19 Cr	₹35 Cr	+21.2%
EBITDA Margin	3.8%	4.3%	3.9%	7.1%	—
PAT (Net Profit)	₹6 Cr	₹7 Cr	₹3 Cr	₹13 Cr	+30.5%
EPS	₹14.05	₹16.63	₹7.65	₹31.25	+30.5%
ROE	10.1%	10.5%	4.6%	15.9%	—
ROCE	14.0%	15.7%	11.5%	20.8%	—
Total Debt	₹73 Cr	₹72 Cr	₹79 Cr	₹67 Cr	-2.8%
Free Cash Flow	-₹9 Cr	₹10 Cr	₹4 Cr	₹15 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.8% a year).

🟢 EBITDA has grown at 21.2% a year over 3 years.

🟢 EBITDA Margin has risen from 3.8% to 7.1% over 3 years (+3.3 pts).

🟢 PAT (Net Profit) has grown at 30.5% a year over 3 years.

🟢 EPS has grown at 30.5% a year over 3 years.

🟢 ROE has risen from 10.1% to 15.9% over 3 years (+5.7 pts).

🟢 ROCE has risen from 14.0% to 20.8% over 3 years (+6.8 pts).

🟢 Total Debt has shrunk at 2.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹9 Cr to ₹15 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹214 Cr

Total Liabilities

₹131 Cr

Total Debt

₹67 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹17 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.5%

Corporate Actions

Ex-Dividend Date

16 Sept 2011

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

1 positive5 general

Universal Starch-Chem Allied Ltd. Peer Comparison – Compare with Others

Value Research, 01 Sept

Universal Starch flags corn shortage risk, approves director changes at AGM

scanx.trade, 28 Sept

Universal Starch-chem Allied Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Universal Starch-Chem Allied Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Universal Starch Chem FY26 Results: Net profit up 309% YoY

scanx.trade, 04 SeptResults

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

MNFL Stock Price and Chart — BSE:MNFL

TradingView, 03 Dec

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟢Financial HealthStrong13.8/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong9.8/15

🟢ValuationAttractive13.2/15

🔴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

✓EBITDA margin holds above 5%7.1%
✓Interest cover stays above 3x3.4x
✓Free cash flow remains positive₹15 Cr
✓Debt / EBITDA stays below 2x1.9x
✓ROCE stays above 18%20.8%