Check Before You Invest : Primo Chemicals Ltd

Snapshot

Q.1 Which industry/sub-sector does Primo Chemicals Ltd belong to?

Primo Chemicals Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Chemicals segment.

Q.2 Is Primo Chemicals Ltd a good quality company?

Primo Chemicals Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Primo Chemicals Ltd undervalued or overvalued?

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

Q.4 Is Primo Chemicals Ltd a good buy now?

Primo 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

Q.1 Revenue growth of Primo Chemicals Ltd?

Primo Chemicals Ltd revenue growth is 40% for FY-2025, which is above its 5-year CAGR of 13.85%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Primo Chemicals Ltd?

Primo Chemicals Ltd Return on capital employed is 7.4% for FY-2025, which is below its 5-year historical median of 42.21%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.3 Return on Asset of Primo Chemicals Ltd?

Primo Chemicals Ltd Return on Asset is 0.33%, which is below its 5-year historical median of 3.5%, indicating deteriorated asset utilization efficiency.

Q.4 Return on Equity (ROE) of Primo Chemicals Ltd?

Primo Chemicals Ltd Return on equity is 0.69% for FY-2025, which is below its 5-year historical median of 18.68%, indicating the business is making worse use of its shareholders capital.

Q.5 Cash conversion cycle of Primo Chemicals Ltd?

Primo Chemicals Ltd Cash conversion cycle is 10 days, above its 5-year historical median of -3 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	0.77	0.96
ROE	0.69	18.68
ROCE	7.4	42.21
Cash Conversion Cycle	10 days	-3 days

Q.6 Gross Profit margin of Primo Chemicals Ltd?

Primo Chemicals Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.9% for FY-2025, which is below its 5-year median of 16.5%, indicating decreasing margins.

Q.7 Operating Profit Margin of Primo Chemicals Ltd?

Primo Chemicals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.3% for FY-2025, which is in line with its 5-year median of 12.3% indicating stable margins.

Q.8 Net Profit Margin of Primo Chemicals Ltd?

Primo Chemicals Ltd Net Profit Margin is 0.42% for FY-2025, is below with its 5-year median of 3.64%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	11.9	16.5
Operating Profit Margin	12.3	12.3
Net Profit Margin	0.42	3.64

Q.9 Debt to Equity ratio of Primo Chemicals Ltd?

Primo Chemicals Ltd Debt-to-Equity ratio is 0.49, which is above with the industry average of 0.26, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Primo Chemicals Ltd?

Primo Chemicals Ltd Debt to cash flow from operations is 2.61, which is at a moderate level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Primo Chemicals Ltd?

Promoters hold 32.40% of the Primo Chemicals Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Primo Chemicals Ltd vs industry peers?

Primo Chemicals Ltd revenue CAGR is 13.85%, compared to the industry median CAGR of 9.62%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	40	9.6
Gross Profit Growth	725	14.3
Operating Profit Growth	871.4	12
Net Profit Growth	0	12.7

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.77	0.97
ROE	0.69	10.68
ROCE	7.4	13.26
Cash Conversion Cycle (days)	9.62	63

Valuation & price assessment

Q.1 Stock return of Primo Chemicals Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 26% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	26%	4.3%	-29.1%	4.8%

Q.3 Valuation ratios of Primo Chemicals Ltd vs historical?

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

Q.4 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	57.52	33.40	27.93
Price to Book	1.69	3.51	2.22
Price to Sales	1.08	2.27	1.93
EV to EBITDA	8.33	10.00	14.18

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