Vellora Impact Limited

Basic Materials — Chemicals · BSE

₹13.93−₹0.12 (−0.85%)

DalalBaazaar Score

61 / 100

🟢 Good

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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Vellora Impact Limited supplies agricultural commodities and provides information technology solutions in India. The agriculture division offers grains including wheat and bajra, along with pulses such as rajma, kabuli chana, and urad.

IndustryChemicals

SectorBasic Materials

Employees13

Annual revenue₹5 Cr

How does it make money?

Turns over ₹5 Cr a year. Of every ₹100 of sales, about ₹107 reaches shareholders as profit, with ₹-41 left at the operating level before interest, tax and depreciation. Each of its 13 employees supports ₹35.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹35.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are 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 554.3% 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 ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -52% while net margin moved +11727% 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-52%

Margin effect+11727%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.35 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ 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

62/ 100

Average

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

Valuation

83/ 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

0.5x

3Y Median

126.4x

40 monthly readings · mean 116.5x · range 1.5x–168.2x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 100% below its 3y median of 126.4x. 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 98% below the peer median of 33.8x.

vs. its own history

Cheap

126.4x median over 40 months · -100%

vs. sector peers

Cheap

33.8x median of 3 peers · -98%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

—

PEG

0.00

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 99% over 3 years.
Return on equity is rising
ROE has improved from 2.5% to 516.3%.
Return on capital is rising
ROCE has improved from 3.7% to 554.3%.
High return on capital employed
ROCE of 554.3% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 3.75x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 46.1 points, from 4.8% to -41.3%.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.67 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 554.3% 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.
Deleveraging frees up earnings
Debt is down 99% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 100% 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 98% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 4.8% to -41.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 3.75x. Interest is payable whether or not the business has a good year.
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.
Several serious flags at once
4 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 -43%✓ -41.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 551%✓ 554.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 126.4x✓ 0.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 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 · 2 neutral · 3 weak

Market Cap

₹8 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

0.5x

Cheap

Cheap against the generic band

P/B Ratio

8.08x

Rich

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

EPS (TTM)

₹26.2

Profitable

Profitable on a per-share basis

ROE

516.3%

Strong

Strong capital efficiency

ROCE

554.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.75x

High

High leverage

Revenue Growth (YoY)

12044.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

165.1%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.6%

Average

Average margins

Net Margin

10.3%

Good

Strong bottom-line conversion

Current Ratio

0.67

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.35

Defensive

Steadier than the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

13.7 / 13.2

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹10 Cr	₹6 Cr	₹5 Cr	-21.7%
EBITDA	₹0 Cr	₹1 Cr	-₹5 Cr	-₹2 Cr	—
EBITDA Margin	4.8%	6.9%	-78.0%	-41.3%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	-₹8 Cr	₹5 Cr	+284.4%
EPS	₹0.16	₹0.16	₹-13.76	₹8.96	+282.6%
ROE	2.5%	1.5%	—	516.3%	—
ROCE	3.7%	6.0%	—	554.3%	—
Total Debt	₹3 Cr	₹3 Cr	₹4 Cr	₹0 Cr	-78.1%
Free Cash Flow	-₹3 Cr	-₹0 Cr	-₹0 Cr	-₹2 Cr	—

🔴 Revenue has shrunk at 21.7% a year over 3 years.

🔴 EBITDA has turned negative, from ₹0 Cr to -₹2 Cr.

🔴 EBITDA Margin has fallen from 4.8% to -41.3% over 3 years (-46.1 pts).

🟢 PAT (Net Profit) has grown at 284.4% a year over 3 years.

🟢 EPS has grown at 282.6% a year over 3 years.

🟢 ROE has risen from 2.5% to 516.3% over 3 years (+513.8 pts).

🟢 ROCE has risen from 3.7% to 554.3% over 3 years (+550.6 pts).

🟢 Total Debt has shrunk at 78.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

36.4%

Corporate Actions

Ex-Dividend Date

11 Nov 2021

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive3 mixed2 general

Vellora Impact receives BSE in-principle approval for rights issue

scanx.trade, 08 Oct

Small-cap stock under ₹50 hits 20% upper circuit after Q1FY27 results

Livemint, 23 JulResults

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

This Single-Digit PE Stock Hits 20% Upper Circuit As Q1 FY27 Revenue Jumps Over 12,044% YoY; Reports Highest-Ever Quarterly PAT

Dalal Street Investment Journal, 23 JulResults

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

Vellora Impact applies for promoter group reclassification to public

scanx.trade, 27 Jul

Vellora Impact Ltd Q4 Results 2026 - Find Vellora Impact Ltd Q4 Earnings Result | Vellora Impact Ltd Q4 results

Livemint, 01 SeptResults

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

Vellora Impact turns profitable in Q1, posts Rs 7.9 crore profit

Moneycontrol.com, 23 JulResults

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

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Profitability · Valuation

MiddlingFinancial Health · Growth

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

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