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Check Before You Invest : Ambica Agarbathies & Aroma Industries Ltd

BSE: 532335 NSE: AMBICAAGAR ISIN: INE792B01012
  |   Sector:  FMCG   |   Industry:  Household & Personal Products

Snapshot

Q.1 Which industry/sub-sector does Ambica Agarbathies & Aroma Industries Ltd belong to?
Ambica Agarbathies & Aroma Industries Ltd belongs to the FMCG sector, operating specifically within the Household & Personal Products segment.
Q.2 Is Ambica Agarbathies & Aroma Industries Ltd a good quality company?
Ambica Agarbathies & Aroma Industries 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 Ambica Agarbathies & Aroma Industries Ltd undervalued or overvalued?
Ambica Agarbathies & Aroma Industries 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 57.95 16.47
Price to Book 0.36 0.45
Price to Sales 0.27 0.41
EV to EBITDA 7.28 8.16
Q.4 Is Ambica Agarbathies & Aroma Industries Ltd a good buy now?
Ambica Agarbathies & Aroma 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 Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd revenue growth is 26.3% for FY-2025, which is above its 5-year CAGR of -5.89%, indicating faster growth.

Q.2 Gross Profit margin of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.8% for FY-2025, which is above its 5-year median of 3.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.29% for FY-2025, which is above its 5-year median of 6.98% indicating increasing margins.

Q.4 Net Profit Margin of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Net Profit Margin is 0.4% for FY-2025, is below its 5-year median of 1.91%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3.8 3.3
Operating Profit Margin (%) 8.29 6.98
Net Profit Margin (%) 0.4 1.91

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Return on Asset is 0.22%, which is below its 5-year historical median of 1.12%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Return on capital employed is 7.69% for FY-2025, which is above its 5-year historical median of 7.01%. 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 Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Return on equity is 0.46% for FY-2025, which is below its 5-year historical median of 2.37%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Cash conversion cycle is 22 days, below its 5-year historical median of 33 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) 0.57 0.55
ROE (%) 0.46 2.37
ROCE (%) 7.69 7.01
Cash Conversion Cycle 22 days 33 days

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

Q.9 Debt to Equity ratio of Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Debt-to-Equity ratio is 0.69, 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 Ambica Agarbathies & Aroma Industries Ltd?
Ambica Agarbathies & Aroma Industries Ltd Debt to cash flow from operations is 52.91, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Ambica Agarbathies & Aroma Industries Ltd?

Q.1 Promoter shareholding and pledge status of Ambica Agarbathies & Aroma Industries Ltd?
Promoters hold 43.41% of the Ambica Agarbathies & Aroma Industries Ltd, with 0.03% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Ambica Agarbathies & Aroma Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Ambica Agarbathies & Aroma Industries Ltd vs industry peers?
Ambica Agarbathies & Aroma Industries Ltd revenue CAGR is -5.89%, compared to the industry median CAGR of 2.59%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 26.3 2.6
Gross Profit Growth (%) 0 16.2
Operating Profit Growth (%) 106.2 11.8
Net Profit Growth (%) 0 19
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.57 0.88
ROE (%) 0.46 8.9
ROCE (%) 7.69 10.3
Cash Conversion Cycle (days) 21.65 59

Valuation & price assessment

Q.1 Stock return of Ambica Agarbathies & Aroma Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 19.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
19.5% -3.3% -0.8% -22.2%
Q.2 Valuation ratios of Ambica Agarbathies & Aroma Industries Ltd vs historical?
The current P/E ratio of 57.95 is higher than its historical median of 16.47, 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 57.95 16.47 44.15
Price to Book 0.36 0.45 3.71
Price to Sales 0.27 0.41 4.58
EV to EBITDA 7.28 8.16 23.48

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