ShreeOswal Seeds and Chemicals Limited produces, processes, and sells various agricultural seeds in India. Its product portfolio includes wheat seeds, soya bean seeds, mustard seeds, black gram, maize, mung, and isabgol. The company trades in agricultural produce. It is also involved in exporting activities. The company markets its products under the Oswal Gold, OSM-77, OSYM-55, Oswal Seeds, and 3 Star brand names. ShreeOswal Seeds and Chemicals Limited was founded in 2002 and is based in Neemuch, India.

India

ShreeOswal Seeds and Chemicals Limited

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

OSWALSEEDS.NS reported revenue of INR 9 268mn in the last 12 months, up 268% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. 

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 33ppts and its growth decelerated by 17ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -0.6% in the last 12 months, a decline from 2.4% in FY23. 

Historically, OSWALSEEDS.NS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 5.4%, a growth from -0.3% in FY23. 

ShreeOswal Seeds and Chemicals Limited reported a return on equity (RoE) of 124.7% in the last 12 months, up from -2.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 80.8% in the last 12 months, an increase from -0.7% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 245.0%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 7.7 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

OSWALSEEDS.NS has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, solid return on capital, low margin volatility, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, inadequate interest coverage, and poor cash flow generation.

In highly turbulent market conditions, OSWALSEEDS.NS is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, OSWALSEEDS.NS is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to notable. We would also like to highlight the average intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is slightly overpriced compared to similar stocks. In particular, the stock is underpriced on P/E, overvalued on P/FC. 

ShreeOswal Seeds and Chemicals Limited

₹ 13.66

2

ShreeOswal Seeds and Chemicals Limited

₹ 13.66

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 13.66

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