Vikas Ecotech Limited

Basic Materials — Specialty Chemicals · NSE

₹1.03₹0.00 (0.00%)

DalalBaazaar Score

32 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Vikas Ecotech Limited engages in the manufacture and sale of specialty additives, and rubber-plastic and polymer compounds in India. It operates through three segments: Infra & Energy, Chemical, Polymers & Special Additives; and Real Estate.

IndustrySpecialty Chemicals

SectorBasic Materials

Annual revenue₹353 Cr

How does it make money?

Turns over ₹353 Cr a year. Of every ₹100 of sales, about ₹0 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 2.4% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -10% while net margin moved -80% 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-10%

Margin effect-80%

DalalBaazaar Score

32/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.5% a year
✗ Profit has declined at 44.1% a year
✗ Profit fell 50.0% in the latest year

Quality vs. Valuation

Company Quality

29/ 100

Weak

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

Valuation

37/ 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.

Historical Valuation

Current P/E

51.5x

3Y Median

37.3x

40 monthly readings · mean 35.3x · range 9.9x–62.8x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 38% above its 3y median of 37.3x. 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 28% above the peer median of 40.4x.

vs. its own history

Expensive

37.3x median over 40 months · +38%

vs. sector peers

Expensive

40.4x median of 4 peers · +28%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

11.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 52% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 6.0% to 4.4% over 3 years.
Return on equity is falling
ROE has dropped from 4.0% to 0.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 8.4% to 2.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴High leverageFinancial
Debt/Equity of 7.13x — earnings must service borrowings before shareholders see anything.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 6.2x to 2.2x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹117 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 82% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 46% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 52% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 6.0% to 4.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.13x. Interest is payable whether or not the business has a good year.
The price already assumes success
The stock trades 38% 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 4.0% to 0.4%. 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.
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.

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

1EBITDA margin holds above 2%✓ 4.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹117 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
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 8%✗ 2.4%
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

3 good · 2 neutral · 6 weak

Market Cap

₹143 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

51.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.22x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.02

Profitable

Profitable on a per-share basis

ROE

0.4%

Weak

Weak capital efficiency

ROCE

2.4%

Weak

Low return on total capital employed

Debt/Equity

7.13x

High

High leverage

Revenue Growth (YoY)

15.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-50.0%

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

-₹117 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

1.1%

Weak

Thin margins leave little room for error

Net Margin

0.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.77

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1.0 / 1.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹394 Cr	₹259 Cr	₹378 Cr	₹353 Cr	-3.5%
EBITDA	₹24 Cr	₹19 Cr	₹18 Cr	₹15 Cr	-13.2%
EBITDA Margin	6.0%	7.4%	4.8%	4.4%	—
PAT (Net Profit)	₹10 Cr	₹7 Cr	₹17 Cr	₹2 Cr	-44.1%
EPS	₹0.1	₹0.06	₹0.1	₹0.02	-41.5%
ROE	4.0%	1.8%	4.3%	0.4%	—
ROCE	8.4%	4.1%	6.5%	2.4%	—
Total Debt	₹62 Cr	₹19 Cr	₹28 Cr	₹30 Cr	-21.6%
Free Cash Flow	₹87 Cr	₹115 Cr	-₹66 Cr	-₹117 Cr	—

🔴 Revenue has shrunk at 3.5% a year over 3 years.

🔴 EBITDA has shrunk at 13.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 6.0% to 4.4% over 3 years (-1.6 pts).

🔴 PAT (Net Profit) has shrunk at 44.1% a year over 3 years.

🔴 EPS has shrunk at 41.5% a year over 3 years.

🔴 ROE has fallen from 4.0% to 0.4% over 3 years (-3.6 pts).

🔴 ROCE has fallen from 8.4% to 2.4% over 3 years (-5.9 pts).

🟢 Total Debt has shrunk at 21.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹87 Cr to -₹117 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹513 Cr

Total Liabilities

₹96 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹113 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

10.7%

Corporate Actions

Ex-Dividend Date

19 Sept 2018

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 positive1 mixed4 general

Vikas EcoTech Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Vikas EcoTech (VIKASECO.NS) Eases to ₹1.03 as Stock Holds Above ₹0.98 Support - Combination Correction

https://www.siam.in/, 28 Sept

Why Is Vikas EcoTech Share Price Falling Key Reasons 2026

Univest, 29 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Vikas Ecotech promoter receives Enforcement Directorate attachment order

scanx.trade, 24 JunOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Momentum Stocks: Maitreya Medicare, Bombay Burmah, Vikas Ecotech up 4-7% on sheer momentum

Moneycontrol.com, 27 Aug

Vikas Ecotech Limited's (NSE:VIKASECO) Business Is Trailing The Market But Its Shares Aren't

Simply Wall Street, 20 Nov

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.

DalalBaazaar Thesis

MiddlingFinancial Health

WeakBusiness Quality · Growth · 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. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑