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INVESTMENT INSIGHTS

Check Before You Invest : Vadilal Industries Ltd

BSE: 519156 NSE: VADILALIND ISIN: INE694D01016
  |   Sector:  FMCG   |   Industry:  Consumer Food

Snapshot

Q.1 Which industry/sub-sector does Vadilal Industries Ltd belong to?
Vadilal Industries Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.
Q.2 Is Vadilal Industries Ltd a good quality company?
Vadilal Industries 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 Vadilal Industries Ltd undervalued or overvalued?
Vadilal Industries 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 43.24 28.89
Price to Book 6.76 8.05
Price to Sales 2.96 2.49
EV to EBITDA 23.61 19.36
Q.4 Is Vadilal Industries Ltd a good buy now?
Vadilal Industries 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 Vadilal Industries Ltd?
Vadilal Industries Ltd revenue growth is 10.8% for FY-2025, which is below its 5-year CAGR of 14.38%, indicating slower growth.

Q.2 Gross Profit margin of Vadilal Industries Ltd?
Vadilal Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.6% for FY-2025, which is above its 5-year median of 13%, indicating increasing margins.

Q.3 Operating Profit Margin of Vadilal Industries Ltd?
Vadilal Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.81% for FY-2025, which is above its 5-year median of 13.11% indicating increasing margins.

Q.4 Net Profit Margin of Vadilal Industries Ltd?
Vadilal Industries Ltd Net Profit Margin is 11.26% for FY-2025, is above its 5-year median of 8.02%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 17.6 13
Operating Profit Margin (%) 16.81 13.11
Net Profit Margin (%) 11.26 8.02

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Vadilal Industries Ltd?
Vadilal Industries Ltd Return on Asset is 16.24%, which is above its 5-year historical median of 12.64%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Vadilal Industries Ltd?
Vadilal Industries Ltd Return on capital employed is 35.19% for FY-2025, which is above its 5-year historical median of 30.14%. 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 Vadilal Industries Ltd?
Vadilal Industries Ltd Return on equity is 31.33% for FY-2025, which is in line with its 5-year historical median of 31.33%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Vadilal Industries Ltd?
Vadilal Industries Ltd Cash conversion cycle is 65 days, in line with its 5-year historical median of 63 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) 1.44 1.44
ROE (%) 31.33 31.33
ROCE (%) 35.19 30.14
Cash Conversion Cycle 65 days 63 days

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

Q.9 Debt to Equity ratio of Vadilal Industries Ltd?
Vadilal Industries Ltd Debt-to-Equity ratio is 0.19, which is lower the industry average of 0.49, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Vadilal Industries Ltd?
Vadilal Industries Ltd Debt to cash flow from operations is 1, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Vadilal Industries Ltd?

Q.1 Promoter shareholding and pledge status of Vadilal Industries Ltd?
Promoters hold 64.72% of the Vadilal Industries Ltd, with 7.57% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Vadilal Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Vadilal Industries Ltd vs industry peers?
Vadilal Industries Ltd revenue CAGR is 14.38%, compared to the industry median CAGR of 7.03%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 10.8 7
Gross Profit Growth (%) 17.8 13.3
Operating Profit Growth (%) 11.2 12.6
Net Profit Growth (%) 18.8 20.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.44 1.2
ROE (%) 31.33 7.22
ROCE (%) 35.19 11.34
Cash Conversion Cycle (days) 65.04 48

Valuation & price assessment

Q.1 Stock return of Vadilal Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 20% 34.5% 22.2% -28%
Q.2 Valuation ratios of Vadilal Industries Ltd vs historical?
The current P/E ratio of 43.24 is higher than its historical median of 28.89, 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 43.24 28.89 26.55
Price to Book 6.76 8.05 2.53
Price to Sales 2.96 2.49 1.43
EV to EBITDA 23.61 19.36 14.38

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