Chambal Fertilisers & Chemicals Ltd Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics Signal Enhanced Price Appeal

As of early January 2026, Chambal Fertilisers trades at a price of ₹480.00, slightly down 0.43% from the previous close of ₹482.05. The stock’s 52-week range spans from ₹410.15 to ₹742.45, indicating a significant retracement from its peak levels. The recent valuation upgrade is primarily driven by a Price to Earnings (P/E) ratio of 10.33, which is considerably lower than many of its fertiliser sector peers, signalling a more attractive entry point for investors.

The Price to Book Value (P/BV) stands at 1.95, which, while not the lowest in the sector, remains reasonable given the company’s robust return metrics. The Enterprise Value to EBITDA (EV/EBITDA) ratio of 7.24 further supports the notion of undervaluation, especially when compared to peers such as Paradeep Phosphates and Deepak Fertilisers, which trade at EV/EBITDA multiples of 11.15 and 9.96 respectively.

Comparative Peer Analysis

Within the fertiliser industry, Chambal Fertilisers’ valuation is now categorised as attractive by MarketsMOJO, a notable upgrade from its previous sell rating as of 22 December 2025. This upgrade reflects a Mojo Score of 55.0 and a Mojo Grade of Hold, indicating a cautious but positive outlook. The company’s valuation compares favourably against other sector players such as RCF (P/E 26.05), GSFC (P/E 10.88), and National Fertilizers, which trades at a much higher P/E of 42.11 and is rated only fair.

More attractively valued peers include Zuari Agro Chemicals and SPIC, with P/E ratios of 4.35 and 9.14 respectively, both rated very attractive. However, Chambal’s balance of valuation and operational metrics such as Return on Capital Employed (ROCE) and Return on Equity (ROE) provides a compelling investment case.

Operational Efficiency and Profitability Metrics

Chambal Fertilisers boasts a ROCE of 24.47% and an ROE of 18.93%, underscoring efficient capital utilisation and strong profitability. These figures are critical in justifying the current valuation, as they indicate the company’s ability to generate healthy returns on invested capital, a key consideration for long-term investors.

The company’s PEG ratio of 0.49 further highlights its undervaluation relative to earnings growth, suggesting that the stock is trading at less than half the price justified by its growth prospects. This contrasts with some peers like Mangalore Chemicals, which, despite a higher P/E of 22.64, carries a risky PEG of 2.82, signalling overvaluation relative to growth.

Stock Performance Relative to Sensex

Chambal Fertilisers’ recent stock performance presents a mixed picture. Year-to-date, the stock has declined marginally by 0.43%, slightly underperforming the Sensex’s 0.04% dip. Over the past year, Chambal’s stock has fallen 4.5%, contrasting with the Sensex’s robust 8.51% gain. However, the longer-term performance is impressive, with a three-year return of 54.71% outpacing the Sensex’s 40.02%, and a five-year return of 110.85% significantly exceeding the benchmark’s 77.96%.

Most notably, over a decade, Chambal Fertilisers has delivered a staggering 665.55% return, nearly tripling the Sensex’s 225.63% gain. This long-term outperformance underscores the company’s resilience and growth potential despite short-term market fluctuations.

Market Capitalisation and Trading Range

Chambal Fertilisers holds a Market Cap Grade of 3, reflecting its mid-cap status within the fertiliser sector. The stock’s trading range over the past year, from ₹410.15 to ₹742.45, indicates significant volatility, likely influenced by commodity price swings and regulatory factors impacting fertiliser companies.

Today’s trading range between ₹476.10 and ₹486.00 suggests a relatively stable price band, with a minor day change of -0.43%. This stability, combined with attractive valuation metrics, may appeal to investors seeking value in a sector often subject to cyclical pressures.

Investment Outlook and Ratings

MarketsMOJO’s upgrade of Chambal Fertilisers from a Sell to a Hold rating on 22 December 2025 reflects a cautious optimism. The Mojo Score of 55.0, while moderate, indicates improving fundamentals and valuation appeal. Investors should note that while the valuation has become attractive, the stock is not yet rated a strong buy, signalling the need for continued monitoring of sector dynamics and company performance.

Key risks include commodity price volatility, government policy changes on fertiliser subsidies, and input cost inflation, which could impact margins. However, the company’s strong ROCE and ROE provide a buffer against such headwinds.

Conclusion: Valuation Shift Enhances Investment Appeal

Chambal Fertilisers & Chemicals Ltd’s recent valuation upgrade from fair to attractive marks a significant development for investors seeking value in the fertiliser sector. With a P/E ratio of 10.33, EV/EBITDA of 7.24, and a PEG ratio below 0.5, the stock offers a compelling price proposition relative to its peers and historical averages.

Strong profitability metrics, including a ROCE of 24.47% and ROE of 18.93%, underpin the company’s operational strength and justify the improved valuation. While short-term price movements have been subdued, the stock’s long-term performance remains impressive, outpacing the Sensex by a wide margin over five and ten years.

Investors should weigh the company’s attractive valuation against sector risks and monitor ongoing developments. The current Hold rating and Mojo Score of 55.0 reflect a balanced view, suggesting that Chambal Fertilisers is well-positioned for potential appreciation, albeit with some caution warranted.

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