ALKYLAMINE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 3.2

📊 Core Financials:

- Profitability: PAT declined from 49.4 Cr. to 42.9 Cr. (-9.52% QoQ), showing earnings pressure.

- Margins: ROCE at 18.7% and ROE at 14.0% indicate moderate efficiency.

- Debt: Debt-to-equity at 0.00 → debt-free balance sheet, strong financial discipline.

- EPS: 35.6 ₹, modest earnings relative to valuation.

💹 Valuation Indicators:

- P/E: 45.2 vs Industry PE of 26.6 → significantly overvalued.

- P/B: 1,609 ₹ / 282 ₹ ≈ 5.7, trading at a steep premium.

- PEG Ratio: -7.50 → negative, reflecting weak growth alignment with valuation.

- Intrinsic Value: Estimated fair value ~1,450–1,500 ₹, suggesting mild overvaluation at current price.

🏢 Business Model & Competitive Advantage:

Alkyl Amines operates in specialty chemicals, focusing on amines and derivatives used in pharmaceuticals, agrochemicals, and industrial applications. Competitive advantage lies in niche product expertise, strong industry relationships, and debt-free operations. However, profitability pressures and high valuations limit near-term attractiveness.

📈 Entry Zone & Long-Term Guidance:

- Entry Zone: Attractive accumulation range between 1,450–1,500 ₹.

- Long-Term Holding: Suitable for cautious investors; debt-free balance sheet is a positive, but earnings volatility and stretched valuations warrant patience.

Positive

• Debt-free balance sheet ensures financial stability.
• ROCE (18.7%) and ROE (14.0%) reflect moderate efficiency.
• Dividend yield of 0.64% provides shareholder returns.
• Institutional support: FII (+0.18%) and DII (+0.28%) holdings increased.

Limitation

• Quarterly PAT declined (-9.52%), showing earnings weakness.
• High P/E ratio (45.2) compared to industry average (26.6).
• Negative PEG ratio (-7.50) indicates poor valuation relative to growth.
• Trading below DMA 50 (1,752 ₹) and DMA 200 (1,906 ₹), showing weak technical momentum.

Company Negative News

• Decline in quarterly PAT from 49.4 Cr. to 42.9 Cr.
• Technical indicators (MACD -56.2, RSI 22.5) reflect bearish sentiment and oversold conditions.
• Premium valuation despite earnings pressure.

Company Positive News

• Debt-free balance sheet enhances financial resilience.
• Dividend yield provides consistent shareholder returns.
• Institutional investors (FII & DII) increased stakes.

Industry

• Specialty chemicals sector supported by demand in pharmaceuticals, agrochemicals, and industrial applications.
• Industry PE at 26.6 indicates moderate valuation compared to Alkyl Amine’s premium.
• Sector growth driven by global demand for niche chemical products.

Conclusion

⚖️ Alkyl Amines shows moderate fundamentals with debt-free status and niche industry positioning, but earnings decline and high valuation limit attractiveness. Investors should wait for correction towards 1,450–1,500 ₹ before considering entry. Long-term holding is viable only for cautious investors seeking exposure to specialty chemicals with controlled risk.