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Check Before You Invest : Novateor Research Laboratories Ltd

BSE: 542771 NSE: ISIN: INE08JY01013
  |   Sector:  FMCG   |   Industry:  Household & Personal Products

Snapshot

Q.1 Which industry/sub-sector does Novateor Research Laboratories Ltd belong to?
Novateor Research Laboratories Ltd belongs to the FMCG sector, operating specifically within the Household & Personal Products segment.
Q.2 Is Novateor Research Laboratories Ltd a good quality company?
Novateor Research Laboratories Ltd is a quality company, based on a 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 Novateor Research Laboratories Ltd undervalued or overvalued?
Novateor Research Laboratories 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 240.98 386.29
Price to Book 1.78 1.70
Price to Sales 7.12 14.92
EV to EBITDA 58.97 56.45
Q.4 Is Novateor Research Laboratories Ltd a good buy now?
Novateor Research Laboratories 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 Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd revenue growth is 129.8% for FY-2025, which is above its 5-year CAGR of 48.11%, indicating faster growth.

Q.2 Gross Profit margin of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Gross profit margin which is the profit after deduction of direct costs, is 9.9% for FY-2025, which is in line with its 5-year median of 9.9%, indicating stable margins.

Q.3 Operating Profit Margin of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -4.7% for FY-2025, which is above its 5-year median of -27.62% indicating increasing margins.

Q.4 Net Profit Margin of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Net Profit Margin is 2.95% for FY-2025, is in line with its 5-year median of 2.91%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 9.9 9.9
Operating Profit Margin (%) -4.7 -27.62
Net Profit Margin (%) 2.95 2.91

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Return on Asset is 0.71%, which is above its 5-year historical median of 0.3%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Return on capital employed is 1.78% for FY-2025, which is above its 5-year historical median of 0.7%. 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 Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Return on equity is 1.07% for FY-2025, which is above its 5-year historical median of 0.39%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Cash conversion cycle is 216 days, below its 5-year historical median of 381 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) 0.24 0.12
ROE (%) 1.07 0.39
ROCE (%) 1.78 0.7
Cash Conversion Cycle 216 days 381 days

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

Q.9 Debt to Equity ratio of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Debt-to-Equity ratio is 0.12, which is above the industry average of 0.10, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Novateor Research Laboratories Ltd?
Novateor Research Laboratories Ltd Debt to cash flow from operations is -0.88, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Novateor Research Laboratories Ltd?

Q.1 Promoter shareholding and pledge status of Novateor Research Laboratories Ltd?
Promoters hold 50.75% of the Novateor Research Laboratories Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Novateor Research Laboratories Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Novateor Research Laboratories Ltd vs industry peers?
Novateor Research Laboratories Ltd revenue CAGR is 48.11%, compared to the industry median CAGR of 2.59%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 129.8 2.6
Gross Profit Growth (%) 107.7 16.2
Operating Profit Growth (%) 0 11.8
Net Profit Growth (%) 166.7 19
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.24 0.88
ROE (%) 1.07 8.9
ROCE (%) 1.78 10.3
Cash Conversion Cycle (days) 216.12 59

Valuation & price assessment

Q.1 Stock return of Novateor Research Laboratories Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 34.75% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 34.8% 10.8% -43.2%
Q.2 Valuation ratios of Novateor Research Laboratories Ltd vs historical?
The current P/E ratio of 240.98 is lower than its historical median of 386.29, 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 240.98 386.29 44.15
Price to Book 1.78 1.70 3.71
Price to Sales 7.12 14.92 4.58
EV to EBITDA 58.97 56.45 23.48

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