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Check Before You Invest : Agarwal Industrial Corporation Ltd

BSE: 531921 NSE: AGARIND ISIN: INE204E01012
  |   Sector:  Oil & Gas   |   Industry:  Petrochemicals

Snapshot

Q.1 Which industry/sub-sector does Agarwal Industrial Corporation Ltd belong to?
Agarwal Industrial Corporation Ltd belongs to the Oil & Gas sector, operating specifically within the Petrochemicals segment.
Q.2 Is Agarwal Industrial Corporation Ltd a good quality company?
Agarwal Industrial Corporation Ltd is a average quality company, based on a somewhat consistent 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 Agarwal Industrial Corporation Ltd undervalued or overvalued?
Agarwal Industrial Corporation Ltd appears Somewhat 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 17.51 23.49
Price to Book 1.67 3.52
Price to Sales 0.39 0.65
EV to EBITDA 10.71 13.20
Q.4 Is Agarwal Industrial Corporation Ltd a good buy now?
Agarwal Industrial Corporation Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd revenue growth is 11.7% for FY-2025, which is below its 5-year CAGR of 21.66%, indicating slower growth.

Q.2 Gross Profit margin of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.2% for FY-2025, which is below its 5-year median of 4.5%, indicating decreasing margins.

Q.3 Operating Profit Margin of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.11% for FY-2025, which is below its 5-year median of 4.47% indicating decreasing margins.

Q.4 Net Profit Margin of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Net Profit Margin is 2.68% for FY-2025, is in line with its 5-year median of 2.74%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.2 4.5
Operating Profit Margin (%) 4.11 4.47
Net Profit Margin (%) 2.68 2.74

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Return on Asset is 8.03%, which is below its 5-year historical median of 8.96%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Return on capital employed is 16.5% for FY-2025, which is below its 5-year historical median of 19.32%. 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 Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Return on equity is 14.57% for FY-2025, which is below its 5-year historical median of 15.47%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Cash conversion cycle is 48 days, above its 5-year historical median of 41 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 (x) 3 3.24
ROE (%) 14.57 15.47
ROCE (%) 16.5 19.32
Cash Conversion Cycle 48 days 41 days

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

Q.9 Debt to Equity ratio of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Debt-to-Equity ratio is 0.46, which is lower the industry average of 0.46, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Agarwal Industrial Corporation Ltd?
Agarwal Industrial Corporation Ltd Debt to cash flow from operations is -6.21, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Agarwal Industrial Corporation Ltd?

Q.1 Promoter shareholding and pledge status of Agarwal Industrial Corporation Ltd?
Promoters hold 57.20% of the Agarwal Industrial Corporation Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Agarwal Industrial Corporation Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Agarwal Industrial Corporation Ltd vs industry peers?
Agarwal Industrial Corporation Ltd revenue CAGR is 21.66%, compared to the industry median CAGR of 9.22%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 11.7 9.2
Gross Profit Growth (%) 7.7 5.3
Operating Profit Growth (%) 2.5 10.7
Net Profit Growth (%) 8 6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 3 1.3
ROE (%) 14.57 10.1
ROCE (%) 16.5 13.45
Cash Conversion Cycle (days) 47.58 41

Valuation & price assessment

Q.1 Stock return of Agarwal Industrial Corporation Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
13.2% 18.7% -10.1% -51.3%
Q.2 Valuation ratios of Agarwal Industrial Corporation Ltd vs historical?
The current P/E ratio of 17.51 is lower than its historical median of 23.49, 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 17.51 23.49 14.30
Price to Book 1.67 3.52 2.05
Price to Sales 0.39 0.65 1.35
EV to EBITDA 10.71 13.20 9.88

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