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Check Before You Invest : Bodal Chemicals Ltd

BSE: 524370 NSE: BODALCHEM ISIN: INE338D01028
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Dyes & Pigments

Snapshot

Q.1 Which industry/sub-sector does Bodal Chemicals Ltd belong to?
Bodal Chemicals Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Dyes & Pigments segment.
Q.2 Is Bodal Chemicals Ltd a good quality company?
Bodal Chemicals Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Bodal Chemicals Ltd undervalued or overvalued?
Bodal Chemicals Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 21.16 26.91
Price to Book 0.85 0.86
Price to Sales 0.5 0.61
EV to EBITDA 8.64 10.03
Q.4 Is Bodal Chemicals Ltd a good buy now?
Bodal Chemicals Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Bodal Chemicals Ltd?
Bodal Chemicals Ltd revenue growth is 24.3% for FY-2025, which is above its 5-year CAGR of 7.09%, indicating faster growth.

Q.2 Gross Profit margin of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.5% for FY-2025, which is below its 5-year median of 6.1%, indicating decreasing margins.

Q.3 Operating Profit Margin of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.78% for FY-2025, which is above its 5-year median of 8.36% indicating increasing margins.

Q.4 Net Profit Margin of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Net Profit Margin is 1.14% for FY-2025, is below its 5-year median of 2%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 5.5 6.1
Operating Profit Margin (%) 9.78 8.36
Net Profit Margin (%) 1.14 2

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Return on Asset is 0.83%, which is below its 5-year historical median of 1.45%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Return on capital employed is 5.22% for FY-2025, which is in line with its 5-year historical median of 5.22%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Return on equity is 1.71% for FY-2025, which is below its 5-year historical median of 2.8%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Cash conversion cycle is 93 days, below its 5-year historical median of 119 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.73 0.72
ROE (%) 1.71 2.8
ROCE (%) 5.22 5.22
Cash Conversion Cycle 93 days 119 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Debt-to-Equity ratio is 0.79, which is above the industry average of 0.23, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Bodal Chemicals Ltd?
Bodal Chemicals Ltd Debt to cash flow from operations is 8.56, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bodal Chemicals Ltd?

Q.1 Promoter shareholding and pledge status of Bodal Chemicals Ltd?
Promoters hold 57.00% of the Bodal Chemicals Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bodal Chemicals Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bodal Chemicals Ltd vs industry peers?
Bodal Chemicals Ltd revenue CAGR is 7.09%, compared to the industry median CAGR of 5.57%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 24.3 5.6
Gross Profit Growth (%) 33.8 3.5
Operating Profit Growth (%) 53.7 4.7
Net Profit Growth (%) 150 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.73 0.91
ROE (%) 1.71 7.16
ROCE (%) 5.22 9.19
Cash Conversion Cycle (days) 92.66 76

Valuation & price assessment

Q.1 Stock return of Bodal Chemicals Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -1.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-1.4% -4.9% 5.2% 2.9%
Q.2 Valuation ratios of Bodal Chemicals Ltd vs historical?
The current P/E ratio of 21.16 is lower than its historical median of 26.91, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 21.16 26.91 18.95
Price to Book 0.85 0.86 1.45
Price to Sales 0.5 0.61 1.23
EV to EBITDA 8.64 10.03 11.35

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