Venlon Enterprises Limited

Basic Materials — Specialty Chemicals · BSE

₹4.00−₹0.20 (−4.76%)

DalalBaazaar Score

35 / 100

🔴 Weak

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: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Venlon Enterprises Limited does not have significant operations. Previously, it was engages in the business of manufacturing and trading paraformaldehyde and formaldehyde products.

IndustrySpecialty Chemicals

SectorBasic Materials

Annual revenue₹8 Cr

How does it make money?

Turns over ₹8 Cr a year. Of every ₹100 of sales, about ₹-43 reaches shareholders as profit, with ₹-4 left at the operating level before interest, tax and depreciation.

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 -88.6% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +549% while net margin moved -99% 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+549%

Margin effect-99%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

21/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -526.5% to -4.3% over 3 years.
Debt is being paid down
Total debt is down 82% over 3 years.
Return on capital is rising
ROCE has improved from -157.5% to -88.6%.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 5.86x — earnings must service borrowings before shareholders see anything.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.68 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -526.5% to -4.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 82% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 5.86x. 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
2 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

1Revenue growth stays above 65% a year✓ 86.6% CAGR
Latest reported year was -32.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -6%✓ -4.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -88.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

1 good · 2 neutral · 8 weak

Market Cap

₹21 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

5.38x

Rich

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

EPS (TTM)

₹-0.5

Loss-making

Negative earnings per share — the business is losing money

ROE

-88.6%

Weak

Weak capital efficiency

ROCE

-88.6%

Weak

Low return on total capital employed

Debt/Equity

5.86x

High

High leverage

Revenue Growth (YoY)

-32.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

74.4%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-55.7%

Weak

Thin margins leave little room for error

Net Margin

-34.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.68

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.25

Defensive

Steadier than the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4.0 / 4.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

55.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹8 Cr	₹11 Cr	₹8 Cr	+86.6%
EBITDA	-₹6 Cr	₹1 Cr	-₹0 Cr	-₹0 Cr	—
EBITDA Margin	-526.5%	12.5%	-0.8%	-4.3%	—
PAT (Net Profit)	-₹66 Cr	-₹1 Cr	-₹13 Cr	-₹3 Cr	—
EPS	₹-12.69	₹-0.25	₹-2.52	₹-0.65	—
ROE	—	—	-176.0%	-88.6%	—
ROCE	-157.5%	-6.3%	-176.0%	-88.6%	—
Total Debt	₹123 Cr	₹119 Cr	₹22 Cr	₹22 Cr	-43.3%
Free Cash Flow	₹2 Cr	₹0 Cr	-₹5 Cr	-₹1 Cr	—

🟢 Revenue has grown at 86.6% a year over 3 years.

🟢 EBITDA Margin has risen from -526.5% to -4.3% over 3 years (+522.1 pts).

🟢 ROE has risen from -176.0% to -88.6% over 3 years (+87.4 pts).

🟢 ROCE has risen from -157.5% to -88.6% over 3 years (+68.9 pts).

🟢 Total Debt has shrunk at 43.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹43 Cr

Total Liabilities

₹39 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

89.8%

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

1 positive5 general

Compare VENLON POLY. with

Equitymaster, 06 Oct

Venlon Enterprises accepts resignation of independent director

scanx.trade, 19 Sept

Compare with VENLON POLY.

Equitymaster, 08 Oct

Apollo Finvest (India) standalone net profit rises 45.02% in the June 2026 quarter

Business Standard, 15 AugResults

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

CLEANMAX Stock Price and Chart — NSE:CLEANMAX

TradingView, 02 Mar

Venlon appoints Santhosh Kumar Shet as additional independent director

scanx.trade, 18 Sept

Watch Items

Revenue growth is negative (-32.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

WeakBusiness Quality · Financial Health · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 4 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑