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INVESTMENT INSIGHTS

Check Before You Invest : Nitta Gelatin India Ltd

BSE: 506532 NSE: NITTAGELA ISIN: INE265B01019
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Chemicals

Snapshot

Q.1 Which industry/sub-sector does Nitta Gelatin India Ltd belong to?
Nitta Gelatin India Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Chemicals segment.
Q.2 Is Nitta Gelatin India Ltd a good quality company?
Nitta Gelatin India Ltd is a good quality company, based on a consistently good 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 Nitta Gelatin India Ltd undervalued or overvalued?
Nitta Gelatin India Ltd appears Overvalued, as its key valuation ratios are higher 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 10.46 10.47
Price to Book 2.34 2.00
Price to Sales 1.97 1.38
EV to EBITDA 6.12 6.58
Q.4 Is Nitta Gelatin India Ltd a good buy now?
Nitta Gelatin India 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

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 Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd revenue growth is 11.5% for FY-2025, which is below its 5-year CAGR of 12.36%, indicating slower growth.

Q.2 Gross Profit margin of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Gross profit margin which is the profit after deduction of direct costs, is 21% for FY-2025, which is above its 5-year median of 18.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 19.65% for FY-2025, which is in line with its 5-year median of 18.96% indicating stable margins.

Q.4 Net Profit Margin of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Net Profit Margin is 15.59% for FY-2025, is above its 5-year median of 12.07%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 21 18.7
Operating Profit Margin (%) 19.65 18.96
Net Profit Margin (%) 15.59 12.07

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Return on Asset is 18.44%, which is in line with its 5-year historical median of 18.32%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Return on capital employed is 28.81% for FY-2025, which is in line with its 5-year historical median of 28.81%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Return on equity is 23.22% for FY-2025, which is in line with its 5-year historical median of 23.22%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Cash conversion cycle is 99 days, in line with its 5-year historical median of 101 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.19 1.31
ROE (%) 23.22 23.22
ROCE (%) 28.81 28.81
Cash Conversion Cycle 99 days 101 days

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

Q.9 Debt to Equity ratio of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Debt-to-Equity ratio is 0.12, which is lower the industry average of 0.13, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Nitta Gelatin India Ltd?
Nitta Gelatin India Ltd Debt to cash flow from operations is 0.75, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Nitta Gelatin India Ltd?

Q.1 Promoter shareholding and pledge status of Nitta Gelatin India Ltd?
Promoters hold 74.48% of the Nitta Gelatin India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Nitta Gelatin India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Nitta Gelatin India Ltd vs industry peers?
Nitta Gelatin India Ltd revenue CAGR is 12.36%, compared to the industry median CAGR of 7.53%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 11.5 7.5
Gross Profit Growth (%) -10.5 12.1
Operating Profit Growth (%) -5.5 11.7
Net Profit Growth (%) - 9.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.19 0.93
ROE (%) 23.22 10.17
ROCE (%) 28.81 12.96
Cash Conversion Cycle (days) 98.98 62

Valuation & price assessment

Q.1 Stock return of Nitta Gelatin India Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 20.4% 44.6% 14.6% 72.2%
Q.2 Valuation ratios of Nitta Gelatin India Ltd vs historical?
The current P/E ratio of 10.46 is in line with than its historical median of 10.47, indicating that the stock is trading near 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 10.46 10.47 28.17
Price to Book 2.34 2.00 2.22
Price to Sales 1.97 1.38 1.93
EV to EBITDA 6.12 6.58 14.20

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