Check Before You Invest : Mehul Colours Ltd

Snapshot

Q.1 Which industry/sub-sector does Mehul Colours Ltd belong to?

Mehul Colours Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Dyes & Pigments segment.

Q.2 Is Mehul Colours Ltd a good quality company?

Mehul Colours Ltd is a quality company, based on a 4-year financial track record.

Q.3 Is Mehul Colours Ltd undervalued or overvalued?

Mehul Colours Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Mehul Colours Ltd a good buy now?

Mehul Colours Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Mehul Colours Ltd?

Mehul Colours Ltd revenue growth is 4% for FY-2025, which is below its 3-year CAGR of 4.05%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Mehul Colours Ltd?

Mehul Colours Ltd Return on capital employed is 51.45% for FY-2025, which is in line with its 3-year historical median of 51.45%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.3 Return on Asset of Mehul Colours Ltd?

Mehul Colours Ltd Return on Asset is 33.51%, which is above its 3-year historical median of 28.87%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of Mehul Colours Ltd?

Mehul Colours Ltd Return on equity is 38.46% for FY-2025, which is in line with its 3-year historical median of 38.46%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Mehul Colours Ltd?

Mehul Colours Ltd Cash conversion cycle is 91 days, above its 3-year historical median of 70 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	3-year Historic Median
Asset Turnover	1.39	1.75
ROE	38.46	38.46
ROCE	51.45	51.45
Cash Conversion Cycle	91 days	70 days

Q.6 Gross Profit margin of Mehul Colours Ltd?

Mehul Colours Ltd Gross profit margin which is the profit after deduction of direct costs, is 34% for FY-2025, which is above its 3-year median of 21.3%, indicating increasing margins.

Q.7 Operating Profit Margin of Mehul Colours Ltd?

Mehul Colours Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 30.29% for FY-2025, which is above its 3-year median of 19.87% indicating increasing margins.

Q.8 Net Profit Margin of Mehul Colours Ltd?

Mehul Colours Ltd Net Profit Margin is 24.11% for FY-2025, is above with its 3-year median of 14.67%, indicating increasing margins.

	Current Level	3-year Historic Median
Gross Profit Margin	34	21.3
Operating Profit Margin	30.29	19.87
Net Profit Margin	24.11	14.67

Q.9 Debt to Equity ratio of Mehul Colours Ltd?

Mehul Colours Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.31, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Mehul Colours Ltd?

Mehul Colours Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Mehul Colours Ltd?

Promoters hold 71.60% of the Mehul Colours Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Mehul Colours Ltd vs industry peers?

Mehul Colours Ltd revenue CAGR is 4.05%, compared to the industry median CAGR of 2.73%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	3-year Industry Median
Revenue Growth	4	2.7
Gross Profit Growth	66	2.9
Operating Profit Growth	72.8	-2
Net Profit Growth	70.8	1.8

Operating Efficiency

	Current Level	3-year Industry Median
Asset Turnover	1.39	0.87
ROE	38.46	4.97
ROCE	51.45	7.66
Cash Conversion Cycle (days)	91.2	87

Valuation & price assessment

Q.1 Stock return of Mehul Colours Ltd over the last decade?

Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-

Q.3 Valuation ratios of Mehul Colours Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 3-year historical median and industry numbers?

Valuation Ratios	Current	3-year Historic Median	3-year Industry Median
Price to Earnings	11.69	14.47	22.20
Price to Book	1.66	2.09	1.50
Price to Sales	2.82	3.49	1.37
EV to EBITDA	8.08	10.04	12.03

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