🧠 1. At a Glance
Paragon Fine looked like a solid B2B chemical play until FY24—margin expansion, debt reduction, and IPO buzz. But FY25 just exposed its Achilles heel: profit down 59%, cash flow red, inventory bloated, and price down 64% from IPO highs. So is it still “fine” or already “forgotten”?
🎬 2. Hook – “Chloranil + Dichlone ≠ Multibagger”
This isn’t your average dyes & pigments business. Paragon makes niche stuff—chloranil and dichlone—used in agro and pigments. It also takes on custom synthesis projects in pharma and cosmetics intermediates. But even niche players need pricing power, and Paragon’s latest numbers say… “nah.”
🏭 3. WTF Do They Even Do?
Paragon makes:
- Core Products: Chloranil (for pigments) and Dichlone (for agro chemicals)
- Custom Intermediates: For pharma, dyes, pigments, cosmetics
- Capabilities: Complex synthesis, ISO certified, multi-product plant
Their strength is differentiated chemistry. But their Achilles heel? Scale.
📊 4. Financials – Stability or Slippage?
| Metric (FY25) | Value |
|---|---|
| Revenue | ₹116 Cr |
| Net Profit | ₹6 Cr |
| Operating Margin | 7% |
| ROE | 6.85% |
| ROCE | 9.16% |
| EPS | ₹3.03 |
🔻 Sales down from ₹121 Cr (FY24) to ₹116 Cr (FY25)
🔻 Net Profit down from ₹14 Cr → ₹6 Cr
📉 TTM Profit Growth: -59%
📉 TTM Sales Growth: -4%
💰 5. Valuation – Cheap, Meh, or Crack?
- CMP: ₹64
- P/E: 21.2x
- Price/Book: 1.40x
- Book Value: ₹45.7
EduFair Value Range™:
- FY25 EPS = ₹3.03
- Apply 15–18x multiple → ₹45 – ₹54
- FV Range = ₹45 – ₹55
➡️ CMP of ₹64 = still expensive given FY25 collapse
🔥 6. What’s Cooking – News, Triggers, Drama
- IPO was in FY24: ₹51.6 Cr raised, 91.6% already used
- FY25 EPS halved, OPM dropped from 16% → 7%
- No new product announcements or large order wins
- Inventory Days still high at 124, up from 77
👎 Not much “cooking” except slow demand and margin pressure
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Metric | Value |
|---|---|
| Debt | ₹3 Cr |
| Equity + Reserves | ₹90 Cr |
| D/E Ratio | 0.03x ✅ |
| Cash | Near Zero |
| Assets | ₹104 Cr |
Debt-free, but not cash-rich either. IPO funds almost fully deployed.
💸 8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF? |
|---|---|---|
| FY23 | -2 | ❌ |
| FY24 | 0 | ❌ |
| FY25 | -6 | ❌ |
Three years of negative or zero cash flow from operations. The trend is not fine.
📐 9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 6.85% |
| ROCE | 9.16% |
| Inventory Days | 124 |
| CCC | 206 days (🚨) |
| Dividend Yield | 0.00% |
Sexy margins? Nah.
Sexy working capital? Definitely not.
💵 10. P&L Breakdown – Show Me the Money
| FY | Revenue (₹ Cr) | PAT (₹ Cr) | OPM % |
|---|---|---|---|
| FY23 | ₹104 | ₹10 | 14% |
| FY24 | ₹121 | ₹14 | 16% |
| FY25 | ₹116 | ₹6 | 7% |
That’s not a correction. That’s a crash.
🤼 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROE % | OPM % | CMP/BV |
|---|---|---|---|---|
| Sh. Pushkar Chem | 19.5 | 11.6 | 10.4 | 2.13 |
| Bhageria Industries | 24.2 | 7.2 | 13.7 | 1.71 |
| Bodal Chemicals | 49.2 | 1.8 | 9.1 | 0.87 |
| Paragon Fine | 21.2 | 6.8 | 7.3 | 1.40 |
➡️ Fairly valued vs peers, but lower margins and smaller scale hurt positioning.
🧬 12. Misc – Shareholding, Promoters
- Promoter Holding: 74.87% (✅ Stable)
- FII/DII: <5% combined
- Public float: ~23%
- No pledging.
- Listed on NSE-SME
Good governance, but low liquidity = high volatility.
🧠 13. EduInvesting Verdict™
Paragon’s chemicals may be “fine,” but the FY25 numbers are not.
✅ Niche chemistry with custom synthesis potential
✅ Debt-free, stable promoter holding
🚫 Cash flows red
🚫 Margins halved
🚫 Sales growth flat
🚫 Stock down 64% from high of ₹179 to ₹64
📊 Edu FV Range: ₹45–₹55
At CMP ₹64, it’s pricing in an unlikely margin rebound.
So unless you love holding volatile SME stocks with flat topline and yo-yo margins, this one is better left in the lab for now.
✍️ Written by Prashant | 📅 July 1, 2025
Tags: Paragon Fine, SME IPO, specialty chemicals, agro intermediates, pigment stocks, SME crash, ROCE 9%, EduInvesting
