Vasundhara Rasayans Limited

Basic Materials — Chemicals · BSE

₹142.60+₹3.55 (+2.55%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Vasundhara Rasayans Limited engages in the manufacture and sale of antacids therapeutic category of active pharmaceutical ingredients (API) in India.

IndustryChemicals

SectorBasic Materials

Employees42

Annual revenue₹36 Cr

How does it make money?

Turns over ₹36 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation. Each of its 42 employees supports ₹85.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹85.1 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 20.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 14.2% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 -6% while net margin moved +10% 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-6%

Margin effect+10%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 2.0% a year
✗ Profit CAGR of only 1.2%
✗ Latest-year revenue growth of -8.3% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

77/ 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

7.7x

3Y Median

12.5x

40 monthly readings · mean 12.3x · range 7.7x–17.3x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 38% below its 3y median of 12.5x. 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 77% below the peer median of 33.8x.

vs. its own history

Cheap

12.5x median over 40 months · -38%

vs. sector peers

Cheap

33.8x median of 3 peers · -77%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.1x

PEG

6.57

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 18.0% to 24.6% over 3 years.
Debt is being paid down
Total debt is down 55% over 3 years.
High return on capital employed
ROCE of 20.0% 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 Attention2

Return on equity is falling
ROE has dropped from 20.8% to 14.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 28.6% to 20.0% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 4.43x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.0% 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.
Margin expansion has further to run
EBITDA margin has risen from 18.0% to 24.6%. 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 55% 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 38% 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 77% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 4.43x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 20.8% to 14.2%. 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 23%✓ 24.6%
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.
3Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 17%✓ 20.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 12.5x✓ 7.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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 · 3 neutral · 3 weak

Market Cap

₹45 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.7x

Cheap

Cheap against the generic band

P/B Ratio

1.11x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹18.58

Profitable

Profitable on a per-share basis

ROE

14.2%

Moderate

Moderate capital efficiency

ROCE

20.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

4.43x

High

High leverage

Revenue Growth (YoY)

-8.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

13.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.40%

Modest

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

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.0%

Average

Average margins

Net Margin

16.7%

Good

Strong bottom-line conversion

Current Ratio

6.87

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

149.5 / 156.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹38 Cr	₹37 Cr	₹34 Cr	₹36 Cr	-2.0%
EBITDA	₹7 Cr	₹8 Cr	₹6 Cr	₹9 Cr	+8.6%
EBITDA Margin	18.0%	22.1%	18.8%	24.6%	—
PAT (Net Profit)	₹6 Cr	₹6 Cr	₹4 Cr	₹6 Cr	+1.2%
EPS	₹17.59	₹18.44	₹13.36	₹18.22	+1.2%
ROE	20.8%	18.3%	11.9%	14.2%	—
ROCE	28.6%	24.6%	16.7%	20.0%	—
Total Debt	₹4 Cr	₹2 Cr	₹4 Cr	₹2 Cr	-23.4%
Free Cash Flow	-₹7 Cr	₹4 Cr	-₹6 Cr	-₹2 Cr	—

🟡 Revenue has been broadly flat over 3 years (-2.0% a year).

🟢 EBITDA has grown at 8.6% a year over 3 years.

🟢 EBITDA Margin has risen from 18.0% to 24.6% over 3 years (+6.5 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.2% a year).

🟡 EPS has been broadly flat over 3 years (1.2% a year).

🔴 ROE has fallen from 20.8% to 14.2% over 3 years (-6.7 pts).

🔴 ROCE has fallen from 28.6% to 20.0% over 3 years (-8.6 pts).

🟢 Total Debt has shrunk at 23.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹48 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

67.0%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

18 Aug 2026

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

3 positive3 general

Compare with

Equitymaster, 12 Oct

Vasundhara Rasayans sets Aug 25 AGM for ₹2 dividend, board votes

scanx.trade, 03 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Vasundhara Rasayans Q1 Results: Net profit up 13% YoY to ₹64.8 crore

scanx.trade, 16 AugResults

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

Corporate Actions This Week: Mazagon Dock, Sun TV, Mahanagar Gas, Jindal Steel & More In Focus — Full List

NDTV Profit, 16 Aug

Top stocks in news: Paytm, Milky Mist, Netweb, Manipal Health, Indo-MIM, Jyoti CNC, Nelco, DCX Systems

Business Today, 18 Aug

Dividend Stocks: IGL, Dixon Tech, Mazagon Dock, among others to trade ex-dividend next week — Check details here

Livemint, 14 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Revenue growth is negative (-8.3%) 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

StrongBusiness Quality · Valuation

MiddlingFinancial Health · Profitability · Risk

WeakGrowth

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑