The recent financial data for Zuari Agro Chemicals reveals an outstanding performance in the quarter ending September 2025. Operating cash flow for the year reached ₹511.47 crores, while the return on capital employed (ROCE) for the half-year stood at 20.80%, marking a peak in the company’s recent history. The debt-equity ratio for the half-year is at a low 0.24 times, indicating a conservative capital structure. Quarterly net sales hit ₹1,422.63 crores, with profit before depreciation, interest, and taxes (PBDIT) at ₹173.76 crores. Operating profit to net sales ratio was recorded at 12.21%, and profit after tax (PAT) for the quarter was ₹145.56 crores. Earnings per share (EPS) also reached a high of ₹191.67. However, cash and cash equivalents for the half-year were at ₹64.07 crores, the lowest in recent periods, suggesting a tighter liquidity position.
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From a valuation standpoint, Zuari Agro Chemicals presents a very attractive profile. The company’s ROCE of 11.8% aligns with a favourable enterprise value to capital employed ratio of 0.6, positioning it at a discount relative to its peers’ historical averages. Over the past year, the stock has generated a return of 31.01%, significantly outperforming the BSE500 index return of 8.30%. Profit growth over the same period was 78.2%, with a price/earnings to growth (PEG) ratio of 0.1, indicating potential value for investors seeking growth at a reasonable valuation. Despite this, the company’s long-term fundamentals show some constraints, with net sales growing at an annual rate of 8.83% over the last five years and an average debt-to-equity ratio of 2.72 times, reflecting a higher leverage profile. The average return on capital employed over this period was 9.58%, suggesting moderate profitability per unit of capital.
Technically, Zuari Agro Chemicals has experienced a shift from a bullish to a mildly bullish trend. Weekly and monthly technical indicators present a mixed picture: the Moving Average Convergence Divergence (MACD) is mildly bearish on a weekly basis but bullish monthly, while the Relative Strength Index (RSI) shows no clear signal. Bollinger Bands indicate sideways movement weekly and bullish momentum monthly. Daily moving averages remain bullish, but the KST indicator is mildly bearish weekly and bullish monthly. Dow Theory signals no clear weekly trend and a mildly bearish monthly trend. On-balance volume (OBV) is mildly bullish on both weekly and monthly charts. These mixed signals suggest a cautious technical outlook amid recent price fluctuations, with the stock currently trading at ₹282.20, down 3.19% from the previous close of ₹291.50. The 52-week price range spans ₹155.05 to ₹394.65.
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Zuari Agro Chemicals’ market performance over various time frames has been notable. The stock returned 1.86% over the past week and 8.66% over the last month, both outperforming the Sensex returns of 0.96% and 0.86% respectively. Year-to-date returns stand at 31.93%, compared to the Sensex’s 8.36%. Over one year, the stock’s return was 31.01%, significantly above the Sensex’s 9.48%. Longer-term returns over three and five years are 81.13% and 227.00%, respectively, both exceeding the Sensex’s 37.31% and 91.65%. However, the ten-year return of 87.01% trails the Sensex’s 232.28%, indicating a more moderate long-term growth trajectory.
Despite the company’s size and market presence, domestic mutual funds hold no stake in Zuari Agro Chemicals. This absence may reflect a cautious stance by institutional investors, possibly due to valuation concerns or business fundamentals. The company has declared positive results for two consecutive quarters, with net profit growth of 1108.86% in the recent quarter, underscoring a strong short-term financial trend. However, the high debt levels and moderate long-term growth metrics suggest a need for careful monitoring.
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