Shivalik Rasayan Ltd Valuation Shifts to Attractive Amidst Market Downturn

Valuation Metrics: A Closer Look

As of 17 Feb 2026, Shivalik Rasayan’s price-to-earnings (P/E) ratio stands at 36.93, a figure that, while elevated compared to traditional benchmarks, is considerably lower than several of its peers in the pesticides and agrochemicals industry. For instance, Stallion India and Sanstar trade at P/E ratios of 56.28 and 84.2 respectively, indicating that Shivalik Rasayan’s shares are relatively more reasonably priced within the sector context.

The price-to-book value (P/BV) ratio of 0.72 further underscores the stock’s attractive valuation. Trading below book value often signals undervaluation or market scepticism about asset quality or earnings prospects. However, in Shivalik Rasayan’s case, this low P/BV ratio may reflect the market’s cautious stance given the company’s subdued return metrics.

Enterprise value to EBITDA (EV/EBITDA) at 12.21 is moderate, suggesting that the company is not excessively expensive on an operational cash flow basis. This contrasts with peers like Stallion India (36.41) and Sanstar (85.4), where valuations appear stretched. The EV to EBIT ratio of 22.00, however, indicates some premium relative to earnings before interest and tax, reflecting the company’s lower profitability margins.

Financial Performance and Returns

Shivalik Rasayan’s latest return on capital employed (ROCE) and return on equity (ROE) stand at 3.89% and 2.40% respectively, figures that are modest and point to operational inefficiencies or competitive pressures within the sector. These returns are well below industry averages, which typically range higher for more efficient agrochemical companies.

Dividend yield remains minimal at 0.19%, indicating limited cash returns to shareholders and possibly a reinvestment strategy or cash flow constraints. The PEG ratio is reported as zero, which may be due to negligible or negative earnings growth expectations, further complicating valuation assessments.

Stock Price Performance and Market Context

Shivalik Rasayan’s stock price has experienced a steep decline over the past year and longer-term periods. The current price of ₹269.15 is near its 52-week low of ₹265.35, a stark contrast to its 52-week high of ₹744.20. Year-to-date, the stock has fallen by 24.36%, significantly underperforming the Sensex’s modest 2.28% decline over the same period.

Over the last one year, the stock has plummeted by 58%, while the Sensex has gained 9.66%. Even over a five-year horizon, Shivalik Rasayan’s returns are deeply negative at -59.22%, compared to the Sensex’s robust 59.83% gain. This divergence highlights the company’s struggles amid broader market strength.

However, the ten-year return of 723.09% versus Sensex’s 259.08% indicates that the stock has delivered exceptional long-term gains, albeit with significant volatility and recent setbacks.

Comparative Valuation: Peers and Sector Dynamics

Within the pesticides and agrochemicals sector, Shivalik Rasayan’s valuation stands out as attractive relative to many peers. Companies such as Platinum Industr and Jyoti Resins are classified as expensive, with P/E ratios of 29.45 and 15.39 respectively, but with higher EV/EBITDA multiples indicating stronger operational cash flow valuations.

Other firms like Titan Biotech and Stallion India are deemed very expensive, trading at P/E multiples of 39.57 and 56.28, and EV/EBITDA multiples exceeding 30. This suggests that Shivalik Rasayan’s shares may offer better value for investors willing to accept the risks associated with its lower profitability and recent price weakness.

Interestingly, some companies such as I G Petrochems and Gulshan Polyols are rated very attractive, with I G Petrochems being loss-making but trading at low EV/EBITDA multiples, and Gulshan Polyols showing a P/E of 23.46 with a PEG ratio of 0.11, indicating modest growth expectations.

Market Capitalisation and Mojo Score Insights

Shivalik Rasayan’s market capitalisation grade is rated 4, reflecting its micro-cap status and associated liquidity and risk considerations. The company’s Mojo Score has recently deteriorated from Sell to Strong Sell, with a current score of 28.0 as of 16 Feb 2026. This downgrade signals increased caution from analysts, likely driven by weak financial metrics and disappointing stock performance.

Despite the improved valuation grade from very attractive to attractive, the overall sentiment remains bearish, underscoring the need for investors to weigh valuation appeal against fundamental weaknesses and sector headwinds.

Investment Considerations and Outlook

Investors considering Shivalik Rasayan must balance the improved valuation attractiveness against the company’s operational challenges and weak returns. The low ROCE and ROE figures suggest that the company has yet to demonstrate efficient capital utilisation or strong profitability, which are critical for sustainable growth in the competitive agrochemical industry.

The stock’s recent price weakness and underperformance relative to the Sensex highlight market scepticism, possibly due to sector cyclicality, input cost pressures, or company-specific issues. However, the valuation metrics imply that much of the negative sentiment may already be priced in, offering a potential entry point for value-oriented investors with a higher risk tolerance.

Given the company’s micro-cap status and the downgrade to a Strong Sell Mojo Grade, a cautious approach is warranted. Monitoring operational improvements, earnings growth, and sector tailwinds will be essential before considering a position in Shivalik Rasayan.

Historical Performance Context

While the stock has delivered extraordinary returns over the past decade, the recent multi-year downtrend has erased much of those gains. This volatility underscores the importance of timing and valuation in investment decisions. The current P/E and P/BV ratios suggest that the stock is trading at a discount relative to its historical highs, but the lack of robust earnings growth and profitability remains a concern.

Investors should also consider the broader sector environment, including regulatory changes, commodity price fluctuations, and demand dynamics in the agrochemical space, which can materially impact Shivalik Rasayan’s future prospects.

Conclusion

Shivalik Rasayan Ltd’s shift from a very attractive to an attractive valuation grade reflects a nuanced change in market perception. While the stock’s valuation metrics are comparatively appealing within its sector, the company’s weak financial performance and recent stock price declines temper enthusiasm. The downgrade to a Strong Sell Mojo Grade further signals caution.

For investors with a long-term horizon and a tolerance for risk, the current valuation may present a selective opportunity, provided there is evidence of operational turnaround and earnings improvement. Otherwise, exploring superior alternatives within the pesticides and agrochemicals sector or other segments may be prudent.

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