At a Glance
Bharat Rasayan is a premium-priced, niche agrochemical stock with technical dominance in products like Lambda Cyhalothrin and Metaphenoxy Benzaldehyde. But despite its rich ₹11,000+ price tag, the company’s sales have barely moved in 5 years, ROE has slipped, and its cash flow game is shaky. Is this a silent compounder or an overvalued relic?
1. 🧠 WTF Do They Even Do?
- Bharat Rasayan manufactures technical-grade pesticides and intermediates used in agrochemical formulations.
- Key products: Lambda Cyhalothrin, Metribuzin, Fipronil, Thiamethoxam, etc.
- Top 10 products make up 66% of total sales. So, concentration risk is high. Basically, if one molecule gets banned, R&D team ka band bajega.
- They supply to other agrochemical players – think of them as the “ingredient supplier to the pesticide dons.”
2. 📊 Financials: Flat Chart Syndrome 🫠
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Sales (₹ Cr) | 1,091 | 1,301 | 1,234 | 1,044 | 1,173 |
| Net Profit (₹ Cr) | 164 | 177 | 131 | 82 | 125 |
| OPM % | 22% | 19% | 16% | 11% | 15% |
| ROCE % | 31% | 28% | 20% | 11% | 15% |
| ROE % | 24% | 23% | 17% | 12% | 12% |
📉 Sales growth 5Y CAGR = -1%
📉 Profit growth 5Y CAGR = -5%
🧪 Verdict: Financials are limping like a pesticide-laced snail.
3. 💸 Valuation: Too Pricey for a Flatline?
- CMP: ₹11,068
- P/E: 36.8
- Book Value: ₹2,663
- P/B: 4.15
- Market Cap: ₹4,600 Cr
- Dividend Yield: 0.01% (basically charity)
🧮 Fair Value Range (EduModel™):
- If we give it 25x P/E on normalized EPS of ₹250 (past avg):
👉 FV = ₹6,250 - If we stretch to 30x (for niche, high-margin biz):
👉 FV = ₹7,500
🎯 FV Range: ₹6,250 – ₹7,500
(Current Price = Overvalued AF, unless sales growth suddenly resurrects)
4. 🔥 What’s Cooking?
- No major acquisitions, capex or buzz. Even SEBI clarification was due to “volume movement”, not fundamentals.
- 15% dividend was declared (but that’s ₹1.5 on ₹10 face value – barely chai-paani).
- No major R&D breakthrough or capacity expansion reported.
🫥 Silent compounder? Or sleepy portfolio filler?
5. 🧾 Balance Sheet – Clean, But Not Sexy
| Metric | FY25 |
|---|---|
| Equity | ₹4 Cr |
| Reserves | ₹1,102 Cr |
| Debt | ₹85 Cr |
| Investments | ₹275 Cr |
| Fixed Assets | ₹230 Cr |
| Total Assets | ₹1,385 Cr |
👍 Positives:
- Almost debt-free – leverage isn’t a risk.
- Healthy reserves and investments.
- Fixed asset base is not ballooning unnecessarily.
But where’s the growth engine?
6. 💰 Cash Flow – “Sab Number Game Hai”
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net |
|---|---|---|---|---|
| FY23 | 213 | -43 | -152 | +18 |
| FY24 | 41 | -76 | +49 | +14 |
| FY25 | 172 | -157 | -1 | +14 |
⚠️ CFO is inconsistent, especially with frequent working capital blockages (Inventory + Receivables)
Cash Conversion Cycle = 200 days!
– That’s like a pregnancy and postpartum cycle. Insane.
7. 📈 Ratios – Stressy Is the New Sexy?
| Metric | FY25 |
|---|---|
| ROE | 12% |
| ROCE | 15% |
| OPM | 15% |
| EPS | ₹301 |
| Inventory Days | 136 |
| Debtor Days | 130 |
🔴 3-Year Profit CAGR = -11%
🔴 Working Capital Days = 268
This ain’t screaming efficiency.
8. 💸 P&L Breakdown – Show Me the Money
- Operating Margins used to hover at ~22%, now have fallen to 11–15%.
- Profits halved in 2 years, while sales are stuck in ₹1,000–1,300 Cr zone.
- FY25 profit = ₹125 Cr (vs ₹177 Cr in FY22).
They’ve grown horizontally… on charts, not financially.
9. 🧪 Peer Comparison
| Company | P/E | ROCE | OPM | Sales Growth (5Y) |
|---|---|---|---|---|
| PI Industries | 38 | 22.6% | 27.3% | 📈 Strong |
| Sumitomo | 51 | 25.1% | 20.1% | Moderate |
| Bayer | 50 | 24.7% | 12.6% | Decent |
| Dhanuka | 26 | 28.7% | 20.4% | Healthy |
| Bharat Rasayan | 36.8 | 15.4% | 14.9% | ❌ Negative |
👉 Bharat Rasayan has similar valuation multiples to higher-growth peers, despite weaker performance. That’s called pricing in “vintage reputation.”
10. 🎭 Miscellaneous
- Promoter Holding: 74.99% (Rock solid)
- FIIs/DIIs: Minimal. They don’t love niche midcaps with flatline numbers.
- Shareholders count is falling – went from 17,384 (Jun ‘22) to 15,036 (Mar ‘25)
📉 No love from institutions. No buzz in retail either. Holding is strong but lonely.
11. 🧠 EduInvesting Verdict™
Bharat Rasayan is like that old IIT topper who peaked in 2018, and now does consulting with declining motivation. Still respected. Still intelligent. But hasn’t grown in years.
Pros:
✅ Clean balance sheet
✅ High-quality niche products
✅ Legacy leadership in tech-grade pesticides
Cons:
❌ Flat sales, falling margins
❌ High working capital drag
❌ Expensive valuation vs peers
Verdict: If you’re looking for growth, move on. If you want safety in pesticides, watch from afar. Or wait for a derating.
✍️ Written by Prashant | 📅 July 1, 2025
Tags: Bharat Rasayan, agrochemicals, niche chemicals, pesticide stocks, specialty chemicals, undervalued stocks, screener data, 5 year financials, flat revenue growth, technical pesticide manufacturers,
