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Check Before You Invest : Ducol Organics & Colours Ltd

BSE: 0 NSE: DUCOL ISIN: INE0LZO01015
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Dyes & Pigments

Snapshot

Q.1 Which industry/sub-sector does Ducol Organics & Colours Ltd belong to?
Ducol Organics & Colours Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Dyes & Pigments segment.
Q.2 Is Ducol Organics & Colours Ltd a good quality company?
Ducol Organics & Colours 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 Ducol Organics & Colours Ltd undervalued or overvalued?
Ducol Organics & Colours Ltd appears Fair, as its key valuation ratios are in line with 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 44.91 40.00
Price to Book 2.02 2.90
Price to Sales 2.17 2.38
EV to EBITDA 13.43 17.08
Q.4 Is Ducol Organics & Colours Ltd a good buy now?
Ducol Organics & Colours Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd revenue growth is 2.6% for FY-2025, which is above its 5-year CAGR of 1.12%, indicating faster growth.

Q.2 Gross Profit margin of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.4% for FY-2025, which is in line with its 5-year median of 11.4%, indicating stable margins.

Q.3 Operating Profit Margin of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.67% for FY-2025, which is in line with its 5-year median of 9.53% indicating stable margins.

Q.4 Net Profit Margin of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Net Profit Margin is 5.98% for FY-2025, is in line with its 5-year median of 5.98%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 11.4 11.4
Operating Profit Margin (%) 9.67 9.53
Net Profit Margin (%) 5.98 5.98

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Return on Asset is 3.92%, which is below its 5-year historical median of 5.03%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Return on capital employed is 8.53% for FY-2025, which is below its 5-year historical median of 18%. 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 Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Return on equity is 5.99% for FY-2025, which is below its 5-year historical median of 15%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Cash conversion cycle is 86 days, above its 5-year historical median of 60 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.66 1.16
ROE (%) 5.99 15
ROCE (%) 8.53 18
Cash Conversion Cycle 86 days 60 days

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

Q.9 Debt to Equity ratio of Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Debt-to-Equity ratio is 0.30, 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 Ducol Organics & Colours Ltd?
Ducol Organics & Colours Ltd Debt to cash flow from operations is 1.47, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Ducol Organics & Colours Ltd?

Q.1 Promoter shareholding and pledge status of Ducol Organics & Colours Ltd?
Promoters hold 51.33% of the Ducol Organics & Colours Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Ducol Organics & Colours Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Ducol Organics & Colours Ltd vs industry peers?
Ducol Organics & Colours Ltd revenue CAGR is 1.12%, compared to the industry median CAGR of 5.57%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2.6 5.6
Gross Profit Growth (%) - 3.5
Operating Profit Growth (%) - 4.7
Net Profit Growth (%) - 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.66 0.91
ROE (%) 5.99 7.16
ROCE (%) 8.53 9.19
Cash Conversion Cycle (days) 86 76

Valuation & price assessment

Q.1 Stock return of Ducol Organics & Colours Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of -1.98% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - -2% -1.8%
Q.2 Valuation ratios of Ducol Organics & Colours Ltd vs historical?
The current P/E ratio of 44.91 is higher than its historical median of 40.00, indicating that the stock is trading above 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 44.91 40.00 18.95
Price to Book 2.02 2.90 1.45
Price to Sales 2.17 2.38 1.23
EV to EBITDA 13.43 17.08 11.35

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