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Check Before You Invest : Nagarjuna Fertilizers and Chemicals Ltd

BSE: 539917 NSE: NAGAFERT ISIN: INE454M01024
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Fertilizers

Snapshot

Q.1 Which industry/sub-sector does Nagarjuna Fertilizers and Chemicals Ltd belong to?
Nagarjuna Fertilizers and Chemicals Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Fertilizers segment.
Q.2 Is Nagarjuna Fertilizers and Chemicals Ltd a good quality company?
Nagarjuna Fertilizers and Chemicals 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 Nagarjuna Fertilizers and Chemicals Ltd undervalued or overvalued?
Nagarjuna Fertilizers and Chemicals Ltd appears Overvalued, as its key valuation ratios are higher 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 - -
Price to Book -0.25 -0.30
Price to Sales - 0.14
EV to EBITDA -10.09 -2.98
Q.4 Is Nagarjuna Fertilizers and Chemicals Ltd a good buy now?
Nagarjuna Fertilizers and Chemicals 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 Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd revenue growth is -85.2% for FY-2025, which is below its 5-year CAGR of -16.23%, indicating slower growth.

Q.2 Gross Profit margin of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Gross profit margin which is the profit after deduction of direct costs, is 347.4% for FY-2025, which is above its 5-year median of -19.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -12.61% for FY-2025, which is below its 5-year median of -10.5% indicating decreasing margins.

Q.4 Net Profit Margin of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Net Profit Margin is 344.84% for FY-2025, is above its 5-year median of -25.59%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 347.4 -19.7
Operating Profit Margin (%) -12.61 -10.5
Net Profit Margin (%) 344.84 -25.59

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Return on Asset is 263.49%, which is above its 5-year historical median of -25.31%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Return on capital employed is 0% for FY-2025, which is above its 5-year historical median of -17.53%. 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 Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Return on equity is 0% for FY-2025, which is above its 5-year historical median of -10.56%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Cash conversion cycle is -507 days, below its 5-year historical median of -36 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) 0.76 0.99
ROE (%) - -10.56
ROCE (%) - -17.53
Cash Conversion Cycle -507 days -36 days

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

Q.9 Debt to Equity ratio of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Debt-to-Equity ratio is -0.02, which is lower the industry average of 0.41, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Nagarjuna Fertilizers and Chemicals Ltd?
Nagarjuna Fertilizers and Chemicals Ltd Debt to cash flow from operations is -0.08, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Nagarjuna Fertilizers and Chemicals Ltd?

Q.1 Promoter shareholding and pledge status of Nagarjuna Fertilizers and Chemicals Ltd?
Promoters hold 51.77% of the Nagarjuna Fertilizers and Chemicals Ltd, with 37.58% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Nagarjuna Fertilizers and Chemicals Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Nagarjuna Fertilizers and Chemicals Ltd vs industry peers?
Nagarjuna Fertilizers and Chemicals Ltd revenue CAGR is -16.23%, compared to the industry median CAGR of 8.22%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -85.2 8.2
Gross Profit Growth (%) 0 13.5
Operating Profit Growth (%) 0 7
Net Profit Growth (%) 0 14.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.76 1.19
ROE (%) - 7.02
ROCE (%) - 9.34
Cash Conversion Cycle (days) -507.22 68

Valuation & price assessment

Q.1 Stock return of Nagarjuna Fertilizers and Chemicals Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of -12.86% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- -12.9% -29.2% -7.8%
Q.2 Valuation ratios of Nagarjuna Fertilizers and Chemicals Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near 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 - - 13.55
Price to Book -0.25 -0.30 1.43
Price to Sales - 0.14 0.63
EV to EBITDA -10.09 -2.98 7.82

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