by Prashant Marathe | EduInvesting.in | 22 May 2025
🧠 At a Glance:
Sirca Paints dropped another masterpiece in Q4 — not just on walls, but on spreadsheets too.
- 🟢 Revenue: ₹373.9 Cr
- 🟢 Profit: ₹49.1 Cr
- 🟢 EPS: ₹8.96
- 🟢 Debt: Zero
- 🔴 Inventory: ₹1,080 Cr (Umm… how big is their godown?)
📍 CMP: ₹300
With this combo of growth and hygiene, you’d think this is India’s next Asian Paints. But the balance sheet, oh boy, it’s a full-blown painted puzzle.
Let’s crack the code.
🏢 About the Company
Sirca Paints India Ltd deals in wood coatings, PU paints, and decorative finishes. Basically, if you’ve seen that classy Italian finish on a ₹4 crore villa in Delhi, odds are it’s a Sirca job.
They import, manufacture, and distribute paints across the country — B2B + B2C + interior designers’ favourite cousin.
🙇♂️ Key Managerial Personnel (KMP)
- MD: Sanjay Agarwal (earned ₹74.6 lakh in FY25)
- CEO: Apoorv Agarwal (₹47 lakh package)
- Independent Directors: Clearly attending meetings for ₹15,000 sitting fees (yes, disclosed 😄)
- Auditor: Rajesh Kukreja & Associates – gave an unmodified opinion (we still have questions 👀)
📊 Q4 & FY25 Financials Snapshot
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) |
|---|---|---|---|
| Q1 FY25 | 80.10 | 10.21 | 1.86 |
| Q2 FY25 | 106.33 | 13.28 | 2.42 |
| Q3 FY25 | 90.61 | 11.45 | 2.09 |
| Q4 FY25 | 102.10 | 14.15 | 2.58 |
| FY25 | 373.99 | 49.10 | 8.96 |
🚀 EPS Growth: 38% YoY
🧠 Net Profit Margin: 13% — pretty high for paints
🛠️ PBT Margin: 17.5% — thanks to low finance cost (zero debt)
🔮 Forward-Looking Fair Value (FV) Estimate
- CMP: ₹300
- EPS FY25: ₹8.96
- Paint Industry P/E (Asian Paints, Berger): 40–60x
- Let’s assign conservative 32x P/E
🧮 FV = 8.96 × 32 = ₹286.72
⚖️ Verdict: Stock is slightly overvalued — unless they sustain >30% profit growth for another year.
Upside Room: Limited, unless margins expand or revenue crosses ₹500 Cr mark.
🧾 Balance Sheet Audit – EduInvesting Style
We now act like SEBI’s nosiest auditor (but funnier).
🧊 1. Zero Debt, ₹432 Cr in Cash 💰
No term loans. No short-term debt.
Just pure cash worth ₹432 Cr sitting pretty on the books.
Interpretation: Company is debt-averse, highly liquid, and can self-finance growth. Rare combo in SME-Midcap India.
📦 2. Inventories – ₹1,080 Cr 😳
Wait… WHAT?
That’s almost 3x their annual revenue.
❗ Either they’re building a mega warehouse or planning for WW3 supply-chain shock.
Even big players like Asian Paints keep 2–3 months of stock. Here, inventory turnover is highly questionable.
💳 3. Trade Receivables – ₹932 Cr
This means customers owe them almost the entire year’s revenue.
🚩 That’s borderline problematic.
Receivables + Inventory = ₹2,012 Cr
That’s 5.4x FY25 profit, locked up and not generating cash.
🏦 4. Net Current Assets: ₹2,785 Cr
Extremely healthy buffer.
But it’s trapped capital. Unless receivables are collected faster and inventory is sold, ROCE will suffer.
⚠️ 5. Other Non-Current Liabilities: ₹422 Cr
Labeled under “Other Noncurrent Financial Liabilities” with no breakdown.
This could be:
- Lease obligations
- Deferred vendor payments
- Or structured debt-like arrangements
👀 We’ll keep a close watch.
💥 6. Capex – ₹1,069 Cr spent on assets this year
That’s massive for a ₹373 Cr revenue company.
Could be plant expansion or warehousing upgrades — but this is a bold, aggressive move. Either this fuels future growth, or becomes Sirca’s Satyam moment.
💰 Cash Flow Check
| Category | FY25 (₹ Cr) |
|---|---|
| Operating | +₹542.69 |
| Investing | -₹453.25 |
| Financing | -₹83.95 |
| Net Change | +₹5.49 |
✅ Operating cash flow is solid
❌ Capex-heavy year — understandable, but needs matching growth in FY26
🧠 EduInvesting Take
Sirca Paints has:
- Debt-free model
- Consistent profits
- Ambitious expansion
- And bookkeeping that’s clean…ish
But it’s also hoarding stock like it’s preparing for a zombie apocalypse.
EPS is decent, cash is flowing, but ₹1,080 Cr inventory needs answers.
Would we buy? Yes — but only if FY26 revenue crosses ₹500 Cr, and inventories normalize.
⚠️ Risks & Red Flags
| Red Flag | Details |
|---|---|
| 🎨 Overloaded Inventory | ₹1,080 Cr = 3x revenue |
| 🧾 Receivables | ₹932 Cr outstanding |
| 🔍 Unexplained Liabilities | ₹422 Cr in “Other Noncurrent Financial Liabilities” |
| 📦 Capex Spike | ₹1,069 Cr spent — bet on future or burnout? |
🧪 Final Verdict: Buy on Dips, Not on Hype
Sirca isn’t a scam. But it’s also not a “multibagger blind buy.”
📈 Buy only if:
- They deliver ₹500 Cr+ revenue in FY26
- Inventory reduces or matches sales
- Receivables are collected efficiently
Otherwise, you’re investing in warehouses — not paints.
Tags: Sirca Paints FY25 results, zero debt stocks, inventory buildup red flag, SME multibagger or trap, paint sector India, EduInvesting analysis, balance sheet anomaly, high receivables risk
