Check Before You Invest : Universal Starch-Chem Allied Ltd

Q: Which industry/sub-sector does Universal Starch-Chem Allied Ltd belong to?

Universal Starch-Chem Allied Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.

Q: Is Universal Starch-Chem Allied Ltd a good quality company?

Universal Starch-Chem Allied 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: Is Universal Starch-Chem Allied Ltd undervalued or overvalued?

Universal Starch-Chem Allied Ltd appears Somewhat 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. Price to Earnings, Current: 10.34, Historic Median: 7.12. Price to Book, Current: 0.91, Historic Median: 1.09. Price to Sales, Current: 0.14, Historic Median: 0.14. EV to EBITDA, Current: 4.79, Historic Median: 4.99

Q: Is Universal Starch-Chem Allied Ltd a good buy now?

Universal Starch-Chem Allied 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

Q: Revenue growth of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd revenue growth is -6.9% for FY-2025, which is below its 5-year CAGR of 13.22%, indicating slower growth.

Q: Gross Profit margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.2% for FY-2025, which is below its 5-year median of 2.9%, indicating decreasing margins.

Q: Operating Profit Margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.74% for FY-2025, which is in line with its 5-year median of 3.82% indicating stable margins.

Q: Net Profit Margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Net Profit Margin is 0.65% for FY-2025, is below its 5-year median of 1.33%, indicating decreasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 2.2, Historic Median: 2.9. Operating Profit Margin (%), Current: 3.74, Historic Median: 3.82. Net Profit Margin (%), Current: 0.65, Historic Median: 1.33

Q: Return on Asset of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Return on Asset is 1.43%, which is below its 5-year historical median of 3.26%, indicating deteriorated asset utilization efficiency.

Q: Return on capital employed (ROCE) of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Return on capital employed is 9.42% for FY-2025, which is below its 5-year historical median of 13.04%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Snapshot

Q.1 Which industry/sub-sector does Universal Starch-Chem Allied Ltd belong to?

Universal Starch-Chem Allied Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.

Q.2 Is Universal Starch-Chem Allied Ltd a good quality company?

Universal Starch-Chem Allied 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 Universal Starch-Chem Allied Ltd undervalued or overvalued?

Universal Starch-Chem Allied Ltd appears Somewhat 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	10.34	7.12
Price to Book	0.91	1.09
Price to Sales	0.14	0.14
EV to EBITDA	4.79	4.99

Q.4 Is Universal Starch-Chem Allied Ltd a good buy now?

Universal Starch-Chem Allied 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 Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd revenue growth is -6.9% for FY-2025, which is below its 5-year CAGR of 13.22%, indicating slower growth.

Q.2 Gross Profit margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.2% for FY-2025, which is below its 5-year median of 2.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.74% for FY-2025, which is in line with its 5-year median of 3.82% indicating stable margins.

Q.4 Net Profit Margin of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Net Profit Margin is 0.65% for FY-2025, is below its 5-year median of 1.33%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	2.2	2.9
Operating Profit Margin (%)	3.74	3.82
Net Profit Margin (%)	0.65	1.33

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Return on Asset is 1.43%, which is below its 5-year historical median of 3.26%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Return on capital employed is 9.42% for FY-2025, which is below its 5-year historical median of 13.04%. 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 Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Return on equity is 4.71% for FY-2025, which is below its 5-year historical median of 11.19%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Cash conversion cycle is 20 days, above its 5-year historical median of 11 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)	2.18	2.46
ROE (%)	4.71	11.19
ROCE (%)	9.42	13.04
Cash Conversion Cycle	20 days	11 days

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

Q.9 Debt to Equity ratio of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Debt-to-Equity ratio is 1.14, which is above the industry average of 0.49, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Universal Starch-Chem Allied Ltd?

Universal Starch-Chem Allied Ltd Debt to cash flow from operations is 3.52, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Universal Starch-Chem Allied Ltd?

Q.1 Promoter shareholding and pledge status of Universal Starch-Chem Allied Ltd?

Promoters hold 53.86% of the Universal Starch-Chem Allied Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Universal Starch-Chem Allied Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Universal Starch-Chem Allied Ltd vs industry peers?

Universal Starch-Chem Allied Ltd revenue CAGR is 13.22%, compared to the industry median CAGR of 7.03%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	-6.9	7
Gross Profit Growth (%)	-29.7	13.3
Operating Profit Growth (%)	-8.8	12.6
Net Profit Growth (%)	-54.1	20.7

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	2.18	1.2
ROE (%)	4.71	7.22
ROCE (%)	9.42	11.34
Cash Conversion Cycle (days)	19.79	48

Valuation & price assessment

Q.1 Stock return of Universal Starch-Chem Allied 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%	13.9%	5.8%	-8%

Q.2 Valuation ratios of Universal Starch-Chem Allied Ltd vs historical?

The current P/E ratio of 10.34 is higher than its historical median of 7.12, 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	10.34	7.12	26.55
Price to Book	0.91	1.09	2.53
Price to Sales	0.14	0.14	1.43
EV to EBITDA	4.79	4.99	14.38

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