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Check Before You Invest : Hindprakash Industries Ltd

BSE: 543645 NSE: HPIL ISIN: INE05X901010
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Dyes & Pigments

Snapshot

Q.1 Which industry/sub-sector does Hindprakash Industries Ltd belong to?
Hindprakash Industries Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Dyes & Pigments segment.
Q.2 Is Hindprakash Industries Ltd a good quality company?
Hindprakash 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 Hindprakash Industries Ltd undervalued or overvalued?
Hindprakash Industries Ltd appears Fair, as its key valuation ratios are in line with 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 137.62 55.38
Price to Book 2.87 2.87
Price to Sales 1.22 1.23
EV to EBITDA 33.61 26.95
Q.4 Is Hindprakash Industries Ltd a good buy now?
Hindprakash 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 Hindprakash Industries Ltd?
Hindprakash Industries Ltd revenue growth is 2.3% for FY-2025, which is above its 5-year CAGR of -0.62%, indicating faster growth.

Q.2 Gross Profit margin of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.6% for FY-2025, which is below its 5-year median of 3.8%, indicating decreasing margins.

Q.3 Operating Profit Margin of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.63% for FY-2025, which is below its 5-year median of 3.58% indicating decreasing margins.

Q.4 Net Profit Margin of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Net Profit Margin is 1.61% for FY-2025, is below its 5-year median of 2.44%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.6 3.8
Operating Profit Margin (%) 2.63 3.58
Net Profit Margin (%) 1.61 2.44

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Return on Asset is 1.85%, which is below its 5-year historical median of 3.63%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Return on capital employed is 6.36% for FY-2025, which is below its 5-year historical median of 9.19%. 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 Hindprakash Industries Ltd?
Hindprakash Industries Ltd Return on equity is 3.23% for FY-2025, which is below its 5-year historical median of 6.23%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Cash conversion cycle is 136 days, above its 5-year historical median of 126 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) 1.15 1.49
ROE (%) 3.23 6.23
ROCE (%) 6.36 9.19
Cash Conversion Cycle 136 days 126 days

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

Q.9 Debt to Equity ratio of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Debt-to-Equity ratio is 0.58, which is above the industry average of 0.23, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Hindprakash Industries Ltd?
Hindprakash Industries Ltd Debt to cash flow from operations is -6.87, which is at a unhealthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Hindprakash Industries Ltd?
Promoters hold 74.85% of the Hindprakash Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Hindprakash Industries Ltd vs industry peers?
Hindprakash Industries Ltd revenue CAGR is -0.62%, compared to the industry median CAGR of 5.57%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2.3 5.6
Gross Profit Growth (%) - 3.5
Operating Profit Growth (%) -25 4.7
Net Profit Growth (%) - 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.15 0.91
ROE (%) 3.23 7.16
ROCE (%) 6.36 9.19
Cash Conversion Cycle (days) 135.88 76

Valuation & price assessment

Q.1 Stock return of Hindprakash Industries Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 22.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 22.6% 14.2% 4.1%
Q.2 Valuation ratios of Hindprakash Industries Ltd vs historical?
The current P/E ratio of 137.62 is higher than its historical median of 55.38, 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 137.62 55.38 18.95
Price to Book 2.87 2.87 1.45
Price to Sales 1.22 1.23 1.23
EV to EBITDA 33.61 26.95 11.35

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