At a Glance
Yug Decor Ltd is a ₹35 Cr microcap that makes specialty adhesives, but it’s clinging to a 508x P/E ratio like Fevicol on plywood. Despite consistent sales growth, profits are either microscopic or missing. The company recently raised funds via a rights issue and bonus shares but faces serious margin pressure and rising working capital woes.
1. 🎯 Introduction with Hook
You know a stock is niche when even Screener shows “High / Low: ₹47 / 0.00” 🤡.
Welcome to Yug Decor Ltd – where the adhesives are sticky, but profits aren’t. This SME trades at a P/E of 508, which is basically a polite way of saying “don’t try to calculate it unless you enjoy pain.”
Their products bond wood, rubber, shoes, and maybe even investor hope… but the financials? Not so much.
2. 🏭 WTF Do They Even Do?
Yug Decor manufactures and trades various types of adhesives. Think Fevicol’s third cousin with a Gujarati business card.
Product Lines:
- Synthetic Rubber Adhesives (Yug-Col SR series)
- Synthetic Resin Adhesives (Yug-Col Ultra, Good Bond)
- Natural Rubber Adhesives (NR-107)
- Footwear Adhesives (PU-2009, PU-2012 etc.)
- B2B Focus: Furniture, construction, footwear, laminates
- Also trades computer hardware (wait what?) through a separate entity
Basically, if it sticks, they make it. If it makes money… well, not always.
3. 💸 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹33.2 Cr | ₹27.6 Cr | ₹30.9 Cr |
| PAT | ₹0.07 Cr | ₹1.3 Cr | ₹1.14 Cr |
| OPM | 5.4% | 8.9% | 7.1% |
| ROE | 0.7% | 1.0% | 6.5% |
🧪 Growth? Yes.
🧾 Profits? Not reliably.
🫠 ROE? If it were any lower, it’d be negative.
Also, cash flow from operations: -₹6.5 Cr in FY25. That’s not cash burn. That’s a bonfire.
4. 📉 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 508x 😭
- P/B: 3.07x
- Market Cap: ₹35.6 Cr
- Fair Value Range Estimate: ₹10–₹14 based on normalized EPS of ₹0.2–₹0.4 and P/E 25–35x (generous SME premium)
This valuation makes zero sense unless you’re also investing in manifestation.
Let’s be honest: this looks like a speculative trade disguised as a business.
5. 🍛 What’s Cooking – News, Triggers, Drama
- ✅ Bonus Issue: 15:100 in Oct 2023 (dilution alert)
- ✅ Rights Issue: Raised ₹~10 Cr in Apr 2024
- 🛑 Plywood Unit Sale: Signaled exit from one vertical in July 2024
- ❌ Compliance Officer Quit: Aug 2024
- 🪙 Dividend: Declared, but at 3% yield… on paper-thin profits
So they raised equity, sold an asset, and lost a CS – all within a year. Busy much?
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Debt | ₹13.05 Cr (up 6x) |
| Equity Capital | ₹10.79 Cr |
| Reserves | ₹0.80 Cr |
| Net Worth | ₹11.6 Cr |
| Debt/Equity | 1.12x (was 0.2x a year ago 😨) |
So… they raised rights capital, and somehow ended up with more debt. How does that even work?
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY25 | -₹6.46 Cr | -₹6.9 Cr | ₹13.5 Cr | ₹0.15 Cr |
The entire operations are burning cash. If this was a kitchen, even the fridge would be on fire.
8. 📐 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 5.87% |
| ROE | 0.71% |
| Interest Coverage | < 2x |
| Working Capital Days | 177 😬 |
| Cash Conversion Cycle | 195 days (stickier than their adhesives) |
This is a lesson in how to grow sales but kill efficiency. OPMs have dropped, receivables are ballooning, and inventory is sitting like unsold Diwali crackers.
9. 📊 P&L Breakdown – Show Me the Money
- FY25 Sales: ₹33.2 Cr
- Operating Profit: ₹1.8 Cr
- Net Profit: ₹0.07 Cr
- PAT Margin: 0.21% 🤷
- EPS: ₹0.06
Even a kirana store in Dombivli would post a better net margin.
10. 🧠 Peer Comparison – Who Else in the Game?
| Company | ROE | OPM | P/E | MCap |
|---|---|---|---|---|
| Pidilite | 23% | 22.9% | 74x | ₹1.55 L Cr |
| Deepak Nitrite | 13.7% | 13.2% | 38.8x | ₹27K Cr |
| Vinati Organics | 15.7% | 26% | 49x | ₹20K Cr |
| Yug Decor | 0.7% | 5.4% | 508x | ₹35 Cr |
This is like comparing a Nano with a Porsche and wondering why the Nano doesn’t have a sunroof.
11. 📦 Miscellaneous – Shareholding, Promoters
- Promoter Holding: Stable at 69.5%
- Public Holding: 30.5%
- Shareholders count: Up from 114 → 361 in 2 years
Hmm. More retail participation post bonus/rights. Exit liquidity anyone?
Also, no institutional holding. No analyst coverage. No one asking “When moon?”
12. 🧑⚖️ EduInvesting Verdict™
Yug Decor Ltd is the classic “microcap keeda” – you spot it at ₹12, ride it to ₹47, and then wonder where the liquidity went.
The core adhesive business has legs, but the profitability has knees made of jelly.
Margins are weak, debt has jumped, and working capital is a blackhole.
🎯 FV Range: ₹10–₹14
Unless margins double and debt halves, anything above that feels like a trader’s delight, not an investor’s dream.
✍️ Written by Prashant | 📅 July 11, 2025
Tags: Yug Decor, SME stock, adhesives business, microcap India, rights issue, bonus shares, undervaluation, stock analysis, EduInvesting
