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Check Before You Invest : Emmbi Industries Ltd

BSE: 533161 NSE: EMMBI ISIN: INE753K01015
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Plastic Products

Snapshot

Q.1 Which industry/sub-sector does Emmbi Industries Ltd belong to?
Emmbi Industries Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Plastic Products segment.
Q.2 Is Emmbi Industries Ltd a good quality company?
Emmbi Industries 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 Emmbi Industries Ltd undervalued or overvalued?
Emmbi 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 21.32 19.67
Price to Book 0.8 1.10
Price to Sales 0.36 0.47
EV to EBITDA 7.47 8.53
Q.4 Is Emmbi Industries Ltd a good buy now?
Emmbi Industries 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 Emmbi Industries Ltd?
Emmbi Industries Ltd revenue growth is 7.1% for FY-2025, which is above its 5-year CAGR of 5.87%, indicating faster growth.

Q.2 Gross Profit margin of Emmbi Industries Ltd?
Emmbi Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.4% for FY-2025, which is below its 5-year median of 5%, indicating decreasing margins.

Q.3 Operating Profit Margin of Emmbi Industries Ltd?
Emmbi Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.54% for FY-2025, which is in line with its 5-year median of 8.94% indicating stable margins.

Q.4 Net Profit Margin of Emmbi Industries Ltd?
Emmbi Industries Ltd Net Profit Margin is 1.64% for FY-2025, is below its 5-year median of 2.64%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.4 5
Operating Profit Margin (%) 8.54 8.94
Net Profit Margin (%) 1.64 2.64

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Emmbi Industries Ltd?
Emmbi Industries Ltd Return on Asset is 1.65%, which is below its 5-year historical median of 2.46%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Emmbi Industries Ltd?
Emmbi Industries Ltd Return on capital employed is 8.03% for FY-2025, which is in line with its 5-year historical median of 8.42%. 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 Emmbi Industries Ltd?
Emmbi Industries Ltd Return on equity is 3.73% for FY-2025, which is below its 5-year historical median of 5.82%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Emmbi Industries Ltd?
Emmbi Industries Ltd Cash conversion cycle is 108 days, in line with its 5-year historical median of 108 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) 1.18 1.18
ROE (%) 3.73 5.82
ROCE (%) 8.03 8.42
Cash Conversion Cycle 108 days 108 days

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

Q.9 Debt to Equity ratio of Emmbi Industries Ltd?
Emmbi Industries Ltd Debt-to-Equity ratio is 0.86, which is above the industry average of 0.25, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Emmbi Industries Ltd?
Emmbi Industries Ltd Debt to cash flow from operations is 6.4, which is at a unhealthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Emmbi Industries Ltd?
Promoters hold 62.95% of the Emmbi Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Emmbi Industries Ltd vs industry peers?
Emmbi Industries Ltd revenue CAGR is 5.87%, compared to the industry median CAGR of 4.71%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7.1 4.7
Gross Profit Growth (%) - 14.3
Operating Profit Growth (%) - 10.1
Net Profit Growth (%) -30 18.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.18 1.06
ROE (%) 3.73 5.91
ROCE (%) 8.03 8.75
Cash Conversion Cycle (days) 108.49 77

Valuation & price assessment

Q.1 Stock return of Emmbi Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -1.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-1.7% -4.3% -3.2% -28.9%
Q.2 Valuation ratios of Emmbi Industries Ltd vs historical?
The current P/E ratio of 21.32 is higher than its historical median of 19.67, 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 21.32 19.67 22.05
Price to Book 0.8 1.10 1.89
Price to Sales 0.36 0.47 1.33
EV to EBITDA 7.47 8.53 10.86

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