🔍 At a Glance
Bharat Rasayan is the hidden sniper of the agrochemical sector — low-key, high-margin, and always premium priced. But over the last five years, something’s bugged the bug-killer. Revenues fell, profits shrank, and working capital went into a coma. Yet the stock still trades at a rich 34x PE. What’s the story?
📊 5-Year Financial Snapshot (Standalone)
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) | ROCE % |
|---|---|---|---|---|---|
| 2021 | 1,091 | 164 | 22% | ₹387.11 | 31% |
| 2022 | 1,301 | 177 | 19% | ₹426.27 | 28% |
| 2023 | 1,234 | 131 | 16% | ₹314.85 | 20% |
| 2024 | 1,044 | 82 | 11% | ₹196.40 | 11% |
| 2025 | 1,173 | 125 | 15% | ₹301.06 | 15% |
📉 5Y Revenue CAGR: +1.5% (barely alive)
📉 5Y Profit CAGR: -5.3%
📉 5Y ROCE Fall: 31% → 15%
The company went from “elite operator” to “mid-cap struggler” real fast.
🧪 What Bharat Rasayan Actually Sells
🧴 Technical-grade pesticides & intermediates. Think:
- Lambda Cyhalothrin
- Thiamethoxam
- Fipronil
- Metribuzine
- Metaphenoxy Benzaldehyde
🆕 New launches:
- Fluxametamide
- Diuron Technical
- Tolfenpyrad Technical
66% of sales come from the top 10 products. Basically, it’s a tight SKU game with strong specialization.
Sounds cool. But in the last 3 years, this formula has run into global demand headwinds.
📉 Quarterly Results – FY25 Breakdown
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % |
|---|---|---|---|
| Q1 | 282 | 27 | 14% |
| Q2 | 328 | 40 | 17% |
| Q3 | 256 | 30 | 16% |
| Q4 | 307 | 28 | 13% |
🔻 Q1 FY24 OPM was 2% 🤯
🛠️ Recovery has happened… but not fully.
⚠️ FY24-FY25 revenue still below FY22 levels.
💰 Balance Sheet Overview – FY25
| Metric | Value |
|---|---|
| Equity Capital | ₹4 Cr |
| Reserves | ₹1,102 Cr |
| Total Assets | ₹1,385 Cr |
| Debt | ₹85 Cr |
| D/E | 0.08 (almost debt-free) |
| Investments | ₹275 Cr (grew 3x in 3 years) |
| ROCE | 15% |
| Cash from Ops (FY25) | ₹172 Cr |
So, what’s the problem?
🔻 Working Capital Days: 268 (insane)
🔻 Cash Conversion Cycle: 200 days
🛢️ Inventory Days: 136
📄 Debtor Days: 130
This isn’t just slow-moving. This is freeze-dried cash flow.
📉 Why the Fall?
- 🌎 Global agrochemical destocking since FY22
- 📦 High inventory = bad product mix or demand mismatch
- 🛠️ OPM squeezed due to raw material volatility
- 📉 Q1 FY24 saw 2% margins — that’s not normal
- 🧠 Management reworked portfolio in FY25, helping OPM inch back to 15%
🤝 Shareholding Pattern – Rock Solid, but Low Float
| Holder | Mar 2025 |
|---|---|
| Promoters | 74.99% |
| FIIs | 0.49% |
| DIIs | 2.75% |
| Public | 21.77% |
👀 No major institutional presence.
👨👩👧👦 Mostly controlled by insiders and ultra-high-net-worth retail.
📉 Liquidity tight → Volatility high
🧾 Peer Comparison
| Company | PE | ROCE | Sales Growth (5Y) | OPM |
|---|---|---|---|---|
| PI Industries | 38x | 22% | 10% | 21% |
| UPL | 48x | 7% | 9% | 18% |
| Sumitomo Chem | 49x | 25% | 13% | 20% |
| Dhanuka | 26x | 29% | 5% | 16% |
| Bharat Rasayan | 34.6x | 15% | -1% | 15% |
🔍 High PE, Low Growth, Mid ROCE — not a great combo.
💸 Valuation Check
| Metric | Value |
|---|---|
| CMP | ₹10,424 |
| EPS (TTM) | ₹301 |
| P/E | 34.6x |
| Book Value | ₹2,663 |
| P/B | 3.9x |
| Dividend Yield | 0.01% (laughable) |
Let’s sanity check with 2 models:
🧠 Fair Value Estimate – Edu Style
Method 1: EPS x Justified PE
- EPS = ₹301
- Reasonable PE for 1% revenue growth, 15% ROCE: 18x – 24x
🎯 FV = ₹5,418 – ₹7,224
Method 2: ROCE-based P/B Multiple
- ROCE = 15%
- Book = ₹2,663
- P/B range = 2.2x – 3.0x
🎯 FV = ₹5,858 – ₹7,989
🎯 Fair Value Range = ₹5,400 – ₹8,000
📉 CMP = ₹10,424
🚨 Overvalued by 30–50%
🤓 TL;DR
✅ Speciality chem player, deep tech portfolio
✅ Margins improving in FY25 (from a low base)
✅ Debt-free, conservative mgmt
❌ Sales CAGR: NEGATIVE over 5 years
❌ ROCE & EPS declining
❌ Huge working capital bloat
❌ 0.01% dividend → No income return
🧠 EduInvesting Verdict
Bharat Rasayan is that stock which once deserved its ₹10K+ price…
…but now looks more like it’s coasting on old glory and tight float.
If you’re betting on a sectoral agro revival, sure — this could revive.
But don’t confuse silence with strategy — this company is playing defense, not offence.
👀 For now, we wait — not to buy the dip…
…but to see if margins, volumes, and ROCE recover together.
✍️ Written by Prashant | 📅 18 June 2025
Tags: Bharat Rasayan, Agrochemical Stocks, Specialty Chemicals, Working Capital, EduInvesting Recap, Fair Value Analysis
