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Check Before You Invest : Kothari Products Ltd

BSE: 530299 NSE: KOTHARIPRO ISIN: INE823A01017
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Kothari Products Ltd belong to?
Kothari Products Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Kothari Products Ltd a good quality company?
Kothari Products Ltd is a weak quality company, based on a inconsistent 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 Kothari Products Ltd undervalued or overvalued?
Kothari Products 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 8.39 44.45
Price to Book 0.42 0.39
Price to Sales 1.47 1.24
EV to EBITDA 8.27 20.49
Q.4 Is Kothari Products Ltd a good buy now?
Kothari Products Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Kothari Products Ltd?
Kothari Products Ltd revenue growth is 6.4% for FY-2025, which is above its 5-year CAGR of -33.78%, indicating faster growth.

Q.2 Gross Profit margin of Kothari Products Ltd?
Kothari Products Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.5% for FY-2025, which is above its 5-year median of 1.8%, indicating increasing margins.

Q.3 Operating Profit Margin of Kothari Products Ltd?
Kothari Products Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -11.26% for FY-2025, which is below its 5-year median of -2.02% indicating decreasing margins.

Q.4 Net Profit Margin of Kothari Products Ltd?
Kothari Products Ltd Net Profit Margin is 17.55% for FY-2025, is above its 5-year median of 0.55%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 19.5 1.8
Operating Profit Margin (%) -11.26 -2.02
Net Profit Margin (%) 17.55 0.55

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Kothari Products Ltd?
Kothari Products Ltd Return on Asset is 4.71%, which is above its 5-year historical median of 0.59%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Kothari Products Ltd?
Kothari Products Ltd Return on capital employed is 5.78% for FY-2025, which is above its 5-year historical median of 2.63%. 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 Kothari Products Ltd?
Kothari Products Ltd Return on equity is 5.39% for FY-2025, which is above its 5-year historical median of 1.01%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Kothari Products Ltd?
Kothari Products Ltd Cash conversion cycle is 116 days, below its 5-year historical median of 204 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) 0.27 0.27
ROE (%) 5.39 1.01
ROCE (%) 5.78 2.63
Cash Conversion Cycle 116 days 204 days

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

Q.9 Debt to Equity ratio of Kothari Products Ltd?
Kothari Products Ltd Debt-to-Equity ratio is 0.13, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Kothari Products Ltd?
Kothari Products Ltd Debt to cash flow from operations is -5.75, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Kothari Products Ltd?

Q.1 Promoter shareholding and pledge status of Kothari Products Ltd?
Promoters hold 74.99% of the Kothari Products Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Kothari Products Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Kothari Products Ltd vs industry peers?
Kothari Products Ltd revenue CAGR is -33.78%, compared to the industry median CAGR of 0%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 6.4 -
Gross Profit Growth (%) 293.3 17.7
Operating Profit Growth (%) 0 16.1
Net Profit Growth (%) 341.7 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.27 0.52
ROE (%) 5.39 2.05
ROCE (%) 5.78 3.6
Cash Conversion Cycle (days) 115.66 46

Valuation & price assessment

Q.1 Stock return of Kothari Products Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -1.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-1.2% 12.1% 8.9% -7.5%
Q.2 Valuation ratios of Kothari Products Ltd vs historical?
The current P/E ratio of 8.39 is lower than its historical median of 44.45, 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 8.39 44.45 33.62
Price to Book 0.42 0.39 1.57
Price to Sales 1.47 1.24 2.21
EV to EBITDA 8.27 20.49 14.09

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