Vandan Foods Limited

Consumer Defensive — Farm Products · BSE

₹25.50₹0.00 (0.00%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Vandan Foods Limited manufactures and trades castor oil and its derivatives in India.

IndustryFarm Products

SectorConsumer Defensive

Employees23

Annual revenue₹260 Cr

How does it make money?

Turns over ₹260 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 23 employees supports ₹11.29 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹11.29 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.5% 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 ROE51.0%

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 +2139% while net margin moved -91% 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+2139%

Margin effect-91%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

68/ 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

14.8x

1.4Y Median

4.7x

17 monthly readings · mean 4.8x · range 2.7x–12.4x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 213% above its 1.4y median of 4.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 66% below the peer median of 43.3x.

vs. its own history

Expensive

4.7x median over 17 months · +213%

vs. sector peers

Cheap

43.3x median of 4 peers · -66%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.8x

PEG

0.54

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 29.5% to 2.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 39.5% to 7.5% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 5 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 6277% over 3 years, from ₹0 Cr to ₹25 Cr.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.6 points, from 8.6% to 2.0%.
🔴Receivables growing faster than salesFinancial
Receivables up 52766% against revenue up 2139% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 3541% against revenue up 2139% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 11.3x to 2.0x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 66% 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?

Margins are being competed away
EBITDA margin has fallen from 8.6% to 2.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 52766% against revenue up 2139%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 213% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 29.5% to 2.8%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 136% a year✓ 181.9% CAGR
Latest reported year was 126.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 0%✓ 2.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹35 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹21 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.8x

Cheap

Cheap against the generic band

P/B Ratio

0.44x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.72

Profitable

Profitable on a per-share basis

ROE

4.1%

Weak

Weak capital efficiency

ROCE

7.5%

Weak

Low return on total capital employed

Debt/Equity

0.52x

Low

Conservative leverage

Revenue Growth (YoY)

126.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-80.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹37 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

2.7%

Weak

Assets generate little profit

Operating Margin

-2.0%

Weak

Thin margins leave little room for error

Net Margin

0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.38

Comfortable

Healthy short-term liquidity

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

24.0 / 24.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

51.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹12 Cr	₹49 Cr	₹108 Cr	₹260 Cr	+181.9%
EBITDA	₹1 Cr	₹4 Cr	₹10 Cr	₹5 Cr	+74.2%
EBITDA Margin	8.6%	7.5%	9.7%	2.0%	—
PAT (Net Profit)	₹1 Cr	₹3 Cr	₹7 Cr	₹1 Cr	+27.2%
EPS	₹0.77	₹3.15	₹8.24	—	—
ROE	29.5%	27.9%	42.2%	2.8%	—
ROCE	39.5%	37.3%	42.8%	7.5%	—
Total Debt	₹0 Cr	—	₹18 Cr	₹25 Cr	+299.5%
Free Cash Flow	₹3 Cr	-₹4 Cr	-₹18 Cr	-₹35 Cr	—

🟢 Revenue has grown at 181.9% a year over 3 years.

🟢 EBITDA has grown at 74.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.6% to 2.0% over 3 years (-6.6 pts).

🟢 PAT (Net Profit) has grown at 27.2% a year over 3 years.

🔴 ROE has fallen from 29.5% to 2.8% over 3 years (-26.8 pts).

🔴 ROCE has fallen from 39.5% to 7.5% over 3 years (-32.0 pts).

🔴 Total Debt has grown at 299.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹35 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹119 Cr

Total Liabilities

₹71 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹24 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.8%

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 positive5 general

Vandan Foods shareholders approve ₹300 crore borrowing limit at AGM

scanx.trade, 21 Sept

Vandan Foods FY26 profit falls 81% to ₹132.4 lakh despite 140% revenue surge

scanx.trade, 29 AugResults

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

Kisaan Parivar Industries (BSE:519230) - Stock Analysis

Simply Wall Street, 27 Feb

Mayank Cattle Food Share Price Within 2% of 52-Week High

Univest, 14 Aug

Vandan Foods Limited IPO GMP, Date, Price Band & Review

IndiaIPO, 30 Jun

Vandan Foods IPO Date, Review, Price, Allotment Details

IPO Watch, 03 Jul

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingGrowth

WeakBusiness Quality · Financial Health · 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. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑