Vadilal Enterprises Limited

Consumer Defensive — Food Distribution · NSE

₹9,652.00+₹49.00 (+0.51%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Vadilal Enterprises Limited engages in the marketing and distribution of ice creams, dairy products, frozen desserts, and processed food products under the Vadilal brand in India. It also offers flavored milk under the Power Sip brand, as well as paneer and ghee.

IndustryFood Distribution

SectorConsumer Defensive

Employees692

Annual revenue₹1,213 Cr

How does it make money?

Turns over ₹1,213 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 692 employees supports ₹1.75 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.3%

Net margin0.9%

Revenue / employee₹1.75 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

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

ROCE has stayed above 15% in every year available and stands at 25.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 31.6% against a peer median of 51.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE25.7%

ROE31.6%

Peer median ROE51.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +31% while net margin moved +30% 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+31%

Margin effect+30%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 61.3x is demanding — it needs sustained high growth to justify
✗ P/B of 25.16x is a steep premium to book

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

27/ 100

Expensive

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

61.3x

Sector Median

43.3x

median of 4 sector peers

⚠️Against its sector it trades 42% above the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

43.3x median of 4 peers · +42%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

61.3x

P/B

25.16x

EV/EBITDA

21.8x

PEG

3.18

Dividend Yield

0.02%

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 25.7% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Debt is rising
Total debt is up 755% over 3 years — worth checking what it funded.
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 55.7% to 31.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 58.8% to 25.7% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 64% against revenue growth of 31% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.62 — near-term obligations exceed near-term assets.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 755% over 3 years, from ₹7 Cr to ₹62 Cr.
🔴High leverageFinancial
Debt/Equity of 1.88x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Receivables growing faster than salesFinancial
Receivables up 64% against revenue up 31% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.62 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.7% 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.
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 1.88x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 64% against revenue up 31%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 42% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 55.7% to 31.6%. 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 1%✓ 3.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹12 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 7% a year✓ 9.3% CAGR
Latest reported year was 36.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

5 / 10 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

Price history

Quick Metrics

5 good · 2 neutral · 4 weak

Market Cap

₹833 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

61.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

25.16x

Rich

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

EPS (TTM)

₹157.42

Profitable

Profitable on a per-share basis

ROE

31.6%

Strong

Strong capital efficiency

ROCE

25.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.88x

High

High leverage

Revenue Growth (YoY)

36.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.02%

Modest

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

Free Cash Flow

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹9,652

Operating Margin

4.5%

Weak

Thin margins leave little room for error

Net Margin

1.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.62

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.38

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

RSI (14)

12.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹929 Cr	₹998 Cr	₹1,115 Cr	₹1,213 Cr	+9.3%
EBITDA	₹20 Cr	₹25 Cr	₹28 Cr	₹41 Cr	+26.2%
EBITDA Margin	2.2%	2.5%	2.6%	3.3%	—
PAT (Net Profit)	₹6 Cr	₹8 Cr	₹6 Cr	₹10 Cr	+19.3%
EPS	₹71.27	₹87.06	₹66.43	₹121.14	+19.3%
ROE	55.7%	41.6%	25.7%	31.6%	—
ROCE	58.8%	37.1%	23.8%	25.7%	—
Total Debt	₹7 Cr	₹28 Cr	₹47 Cr	₹62 Cr	+104.5%
Free Cash Flow	₹1 Cr	-₹21 Cr	-₹12 Cr	-₹12 Cr	—

🟢 Revenue has grown at 9.3% a year over 3 years.

🟢 EBITDA has grown at 26.2% a year over 3 years.

🟢 EBITDA Margin has risen from 2.2% to 3.3% over 3 years (+1.2 pts).

🟢 PAT (Net Profit) has grown at 19.3% a year over 3 years.

🟢 EPS has grown at 19.3% a year over 3 years.

🔴 ROE has fallen from 55.7% to 31.6% over 3 years (-24.1 pts).

🔴 ROCE has fallen from 58.8% to 25.7% over 3 years (-33.0 pts).

🔴 Total Debt has grown at 104.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹349 Cr

Total Liabilities

₹316 Cr

Total Debt

₹62 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

₹42 Cr

Capex

-₹54 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.2%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

01 Sept 2026

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive2 mixed3 general

Vadilal Enterprises Ltd. Share Price Rises 11.08% Today

Univest, 01 SeptPrice 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.

VADILENT Stock Price and Chart — NSE:VADILENT

TradingView, 18 Aug

Vadilal Enterprises proposes draft supply agreement with VIL for shareholder approval

scanx.trade, 30 Sept

Vadilal Enterprises Reports Q1 Standalone Net Profit Of ₹23.3 Crore Vs ₹20.1 Crore YoY

Sahi, 13 AugResults

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

Vadilal Enterprises standalone net profit rises 15.92% in the June 2026 quarter

Business Standard, 14 AugResults

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

Vadilal Enter Standalone March 2026 Net Sales at Rs 291.29 crore, up 30.16% Y-o-Y

Moneycontrol.com, 05 Jun

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 QualityAdequate9.6/20

🔴Financial HealthStretched6.2/20

🟢GrowthStrong16.1/20

🟡ProfitabilityModerate8.1/15

🔴ValuationDemanding3.2/15

🔴RiskHigh4/10

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

This thesis breaks if

✓EBITDA margin holds above 1%3.3%
✗Free cash flow remains positive-₹12 Cr
✓Interest cover stays above 3x3.1x
✓Revenue growth stays above 7% a year9.3% CAGR
✓Debt / EBITDA stays below 2x1.5x