Yuvraaj Hygiene Products Ltd 531663

Summary

Yuvraaj Hygiene Products is a Navi Mumbai company, listed only on the BSE. It sells cleaning products under the HIC name (the company's website is hic.in): scrub pads, floor and toilet cleaners, and surface disinfectants. It also sells insecticides, mainly mosquito repellents and sprays. In FY25 it added a third line, which it calls "warehousing storage products" (storage racks, containers and dividers). The FY26 annual report says the company manufactures these items. The MD's profile filed with the BSE in February 2026 describes the same move as "diversification into the wholesale of plastic-related products". In Q1 FY27 that line was 77% of revenue. The founding couple, Vishal Kampani (Managing Director) and Benu Kampani (Whole-time Director), hold 52.86% between them. The company had 40 permanent employees at March 2026, down from 60 a year earlier.

The financial record is short and uneven. The company lost money in every year from FY15 to FY24. Revenue then jumped to ₹46.3 crore in FY25 with a ₹5.87 crore profit. The new storage line produced 90% of that year's segment profit. In FY26 revenue fell 16% to ₹38.7 crore and profit fell 44% to ₹3.31 crore, because storage-products revenue dropped from ₹25.8 crore to ₹16.5 crore. Q1 FY27 brought another surge, to ₹16.2 crore of revenue and ₹1.93 crore of profit, with ₹12.4 crore of the revenue from the storage line. Operating cash flow went from +₹5.67 crore in FY25 to −₹3.09 crore in FY26. The gap was filled by the MD: interest-free loans from him stood at ₹11.0 crore at March 2026, up from ₹1.46 crore, and no loan agreement was executed for them.

The share price has been even more volatile. It reached ₹20.41 on 25 August 2025, three days after the MD sold 1 crore shares (11% of the company) on the open market. It then fell 82% to ₹3.75 by 1 April 2026, and has since recovered to ₹9.23. At that price the market value is ₹83.7 crore, or 18.5x trailing earnings, close to Jyothy Labs' 18.9x. Jyothy owns Ujala and Maxo and earns ₹370 crore a year.

Our rating is SELL. The consumer business, cleaning and insecticides, is small and competitive. It earned ₹1.55 crore of segment profit on ₹22.3 crore of revenue in FY26, about 7%. The profit that matters comes from the storage line, whose customers, contracts and repeatability are not disclosed. One customer we can identify is a related party: ₹6.13 crore of FY26 sales, 16% of revenue, went to Midas Hygiene Industries Pvt Ltd, an entity the annual report lists as controlled or significantly influenced by key management or their family. The auditor drew attention to a material going-concern uncertainty in the FY25 audit, the Q3 FY26 review and the FY26 audit. A fair multiple for this profile is well below what a branded FMCG company commands. Our base case is ₹6.70.

• The market is paying a branded-FMCG multiple for a lumpy B2B product line. At 18.5x trailing earnings, Yuvraaj is priced almost exactly in line with Jyothy Labs (18.9x). Jyothy has decades of profits, an 84% share in fabric whiteners and a 24.6% ROCE on ₹2,847 crore of sales. Most of Yuvraaj's profit comes from warehousing storage products, which earned ₹4.09 crore of the ₹5.65 crore FY26 segment profit before interest and depreciation (72%), and 90% in FY25. A line with undisclosed customers and revenue that swung from ₹13.3 crore in one quarter to ₹3.7 crore a year later should not get a consumer-brand multiple.
• Q1 FY27 is being treated as a new run-rate, but the record says otherwise. The ₹16.2 crore quarter looks a lot like Q3 FY25 (₹18.7 crore), which was followed by four quarters averaging ₹8.9 crore. Nothing disclosed (no order book, customer list or capacity figure) lets an outsider tell whether Q1 FY27 repeats. At ₹9.23 the stock needs about ₹5.6 crore of annual profit to justify even a 15x multiple. That is 23% above trailing earnings and 69% above FY26.
• Cash and ownership tell a different story from the profit and loss account. FY26 reported a ₹3.31 crore profit but ₹3.09 crore of operating cash outflow. Receivable days went from 19 to 71, inventory days from 64 to 176, and the gap was funded with interest-free loans from the MD. The promoters sold roughly 22 percentage points of the company between January and August 2025, and the auditor flagged going-concern uncertainty in the FY25 audit, the Q3 FY26 review and the FY26 audit. None of this proves a problem. It does mean the burden of proof should sit with the company, and at today's price it does not.

Source: FY26 annual report, Note 42 (audited); Q1 FY27 results, 13 August 2026, via multibagg.ai. All revenue is domestic. Assets and liabilities are not allocated to segments. FY26 segment profit before interest, tax and depreciation: storage ₹4.09cr, cleaning ₹1.21cr, insecticides ₹0.35cr (FY25: ₹6.17cr / ₹0.56cr / ₹0.15cr).

How the money is made. There are two different businesses here. The first is the consumer one: small-ticket cleaning products and insecticides (the latter added in FY25) sold through distributors, institutional buyers and online channels. Combined, it produced ₹22.3 crore of revenue in FY26, a little above the whole company's ₹18–19 crore in FY22–FY24, when it was losing money. The second is the storage-products line, which management launched in FY25 to sell storage racks, containers, dividers and accessories to "industrial and logistics sector clients". The shareholders approved a change to the company's objects clause in June 2025 to cover products made from plastics, steel and wood, including furniture. It is lumpy: ₹13.3 crore in Q3 FY25, ₹3.7–3.9 crore a quarter in Q2–Q3 FY26, then ₹12.4 crore in Q1 FY27. On the company's own segment figures, it is where most of the profit comes from. In Q3 FY26, cleaning products made a segment loss of ₹0.16 crore while warehousing products earned ₹1.00 crore.

Made or traded? The company describes this line in two ways. The FY26 accounts say it "manufactures… storage containers and dividers". The P&L has no purchases of stock-in-trade line, and material consumption is shown as "materials procured for production of finished goods" (₹18.9 crore). The MD's February 2026 profile, however, calls it "wholesale of plastic-related products". Plant and machinery has a net book value of only ₹2.4 crore, and the company owns no immovable property. Our reading is that it is at most a light-assembly operation, but the disclosures do not settle this.

One caveat applies to all segment margins. Note 2 to the quarterly results says material costs are allocated to segments "based on the annual ratio of material consumed by each segment". Quarterly segment profit is therefore partly an accounting allocation rather than a measured figure.

Moat: we could not find one.

• No pricing power in cleaning or insecticides. These categories are dominated by companies such as Jyothy Labs (Maxo holds 23.8% of the mosquito-coil market). The company's own FY25 MD&A cites "a decline in demand for hygiene and cleaning products" after the pandemic and competition from "domestic and multinational brands". HIC has no disclosed market share.
• No visible barrier in storage products. Racks, containers and dividers are widely made and easy to source. The company discloses no long-term supply contracts, exclusive rights or proprietary products in this line. The auditor's going-concern note itself points to "the current level of orders on hand" as a factor in whether profitability lasts.
• Scale works against it. With 40 employees and ₹39–47 crore of revenue, the company has none of the procurement or distribution scale its branded competitors have. The FY25 MD&A lists "high raw material and inventory costs" as a risk.

*Cost of capital of ~15% is a Dart Consultants assumption for an unrated BSE micro-cap, not a sourced figure. All other figures are from screener.in and company filings.

Margins and earnings quality. The jump from losses to a ~15% EBITDA margin came with the storage line, not from improvement in the old business. Discounts also rose sharply in FY26, from ₹1.18 crore (2.5% of gross sales) to ₹3.70 crore (8.7%). Depreciation doubled from ₹0.96 crore to ₹1.91 crore. Of the ₹2.40 crore spent on fixed assets in FY26, ₹1.33 crore went on motor vehicles. Interest is very low (₹0.16 crore) because the MD's ₹11.0 crore loan is interest-free. The finance cost is a car loan and leases. Profit would be lower if the company had to borrow at market rates. The tax line will also normalise. The company paid no tax in FY25 because of accumulated losses, and its effective rate is now rising, which will cut net profit even if operating profit holds.

Cash. FY25 looked healthy: operating cash flow of ₹5.67 crore was close to profit. FY26 reversed it. Revenue fell, but receivables and inventory both rose sharply, operating cash flow went negative, and financing brought in ₹4.7 crore net. Most of the inventory build was raw materials (₹8.74 crore, up from ₹3.61 crore). In fairness, the receivables are recent: 97% were under six months old at March 2026. That fits the company stocking up for the larger Q1 FY27 orders rather than carrying bad debt. The FY27 cash-flow statement will show whether it converts.

Near-term catalysts (6–12 months)

• Q2 FY27 results (the September quarter). The most important test is whether the storage line stays near Q1's ₹12.4 crore or drops back toward the ₹3.7–3.9 crore it ran at in Q2–Q3 FY26.
• H1 FY27 balance sheet and cash flow. A turn back to positive operating cash flow, and a fall in receivable and inventory days, would remove the main earnings-quality concern.
• Removal of the going-concern paragraph from the auditor's report. This would need sustained profitability and probably a larger net worth.

Longer-term catalysts (2–3 years)

• Disclosure of named customers or contracts for the warehousing line, which would make the revenue easier to value.
• Growth in insecticides, the smallest segment (+38% in FY26, from a small base).
• Equity capital or retained profit that rebuilds net worth. That would also bring the company back under the full SEBI corporate-governance regime (Reg 17–27), from which it was exempt for FY26 because of its small size.

• The annual reports describe the business in ways that do not match the numbers. The FY25 MD&A called the warehousing business "still at an early stage" with "modest" revenue, while the segment table showed it as the largest segment (₹25.8 crore, 56% of revenue). The FY26 MD&A repeats that wording almost unchanged. It even says the company "entered the insecticide segment during the year", a year after it did. Several other statements in the FY26 report conflict with the accounts:
  • Note 64 says a preferential allotment was made during the year, but share capital is unchanged and the auditor's CARO report says none was made.
  • The CARO report says the company "has not obtained any loans or other borrowings", against ₹11.6 crore on the balance sheet.
  • The CARO report cites a ₹87.72 lakh cash loss in FY25, a year with a ₹5.87 crore profit.
  Each is probably carried-over drafting rather than substance. Together they lower our confidence in the documents.
• A related party is a material customer. Sales to Midas Hygiene Industries Pvt Ltd were ₹6.13 crore in FY26 (16% of revenue), up from ₹3.81 crore, with ₹0.98 crore still owed at year-end. The company states that all related-party transactions were at arm's length and in the ordinary course of business. Because it is exempt from LODR Regulation 23, it did not need shareholder approval or half-yearly reporting for them.
• Profit has not turned into cash. FY26 operating cash flow was −₹3.09 crore against ₹3.31 crore of profit, and the company's working-capital days went from 14 to 98.
• The auditor has added an "other matter" paragraph, and two further notes. In both the Q3 FY26 review and the FY26 audit, the auditor said balances of receivables, payables, deposits and advances "are subject to confirmation from respective parties". Revenue recognition was a key audit matter, citing the risk of revenue being recognised before control passes. The CARO report also notes that ESIC for contracted factory labour was "neither provided nor paid" for FY26.
• Family pay takes a large share of profit. In FY26 the MD was paid ₹1.08 crore (+46%) and the WTD ₹0.36 crore (+33%), together 43% of net profit. Two of the MD's sons, both employees, drew ₹24 lakh each, which brings the family total to ₹1.92 crore, or 58% of net profit. Pay for non-managerial staff rose 11%. From April 2026 the cap is ₹10 lakh a month each for the MD and WTD.
• Imports are rising, and small suppliers are paid late. Raw-material imports were ₹3.99 crore in FY26 (15% of material purchases), and FX outgo rose to ₹3.95 crore with no export earnings. Separately, ₹6.02 crore was paid to MSME suppliers after the due date in FY26 (₹6.19 crore in FY25). No interest was shown as due on those late payments.

Multiples. There is no broker coverage, no management guidance and no directly comparable listed company. We use Jyothy Labs as the reference point for the consumer businesses because it overlaps in insecticides and household cleaning. It is a far larger and better-established company, which is the point of the comparison. We could not find Yuvraaj's own historical average multiple; for most of the last ten years it had no earnings, so a P/E history would mean little.

*EV = market cap plus net debt of ₹10.9cr (borrowings ₹11.63cr less cash ₹0.77cr, 31 March 2026, excluding lease liabilities). Jyothy figures are from screener.in, 9 October 2026 close.

Method 1: forward P/E scenarios (FY27E). Depreciation is held at about ₹2.3 crore (the Q4 FY26 run-rate) and interest at about ₹0.25 crore. The tax rate rises to 18–20% as loss carry-forwards run out. EPS uses 9.07 crore shares. These are our assumptions, not company guidance (there is none).

Base revenue is Q1 FY27 (₹16.2cr) plus three quarters at ~₹11cr, slightly above the Q2–Q4 FY26 average of ₹10.4cr. The bull case assumes Q1 is the new normal. The bear case assumes FY27 matches FY26. A 15x base multiple is a ~20% discount to Jyothy Labs, reflecting the going-concern note, the reliance on a lumpy B2B line, the related-party sales, negative FY26 cash flow and the absence of any institutional holders. The bull case's 18x is roughly Jyothy's multiple.

Method 2: EV/EBITDA cross-check. Applying 10x to base-case FY27 EBITDA of ₹7.35 crore gives an enterprise value of ₹73.5 crore. That is below today's ~13.3x trailing, because we think trailing EBITDA includes a peak quarter. Subtracting net debt of ₹10.9 crore (borrowings less cash at March 2026) gives equity of ₹62.6 crore, or ₹6.91 per share. We treat the MD's interest-free loan as debt: it has no repayment terms, but it is still a claim ahead of shareholders.

Why there is no full DCF. With a two-year profit record, negative FY26 free cash flow, no guidance and one segment whose revenue swings threefold between quarters, any five-year cash-flow forecast would rest almost entirely on our own guesses. It would also look more precise than it is. Instead we asked what the current price implies. At ₹9.23 the market value is ₹83.7 crore. At 15x that requires ₹5.6 crore of sustainable profit, and at Jyothy's 18.9x it requires ₹4.4 crore, which is about where trailing profit already is, including the strongest quarter in the company's history. In other words, the price assumes Q1 FY27 was not unusual and applies a large-cap consumer multiple to it.

Target. The average of the two base cases (₹6.51 and ₹6.91) is ₹6.71, which we round to ₹6.70, 27.4% below the current price. This is ₹0.10 higher than our first version of this report, because the annual report gave exact cash and borrowing figures. Under Dart's rating bands this is a clear SELL. The bull case of ₹12.47 is plausible if Q1 repeats, so the call depends heavily on the Q2 FY27 result. In a stock this small and thinly held, the price can also move a long way regardless of fundamentals.

• 1. Q1 FY27 turns out to be the new normal (upside risk). If the storage line keeps producing ₹12 crore or more a quarter, FY27 revenue reaches ₹60–65 crore and our bull case of ₹12.47 applies. Management has not said this will happen, but it has not said otherwise either.
• 2. Small-cap price behaviour (risk in both directions). With no institutional holders, 7,218 shareholders and a stock that moved between ₹3.75 and ₹20.41 within seven months, the price can drift a long way from any valuation for long periods. A fundamental SELL here says nothing reliable about timing.
• 3. Funding stress (downside risk). If the storage line slows while receivables and inventory stay high, the company would need more promoter loans or outside debt. The auditor's going-concern note already depends on the promoters' commitment to provide that support.

Sources: Yuvraaj Hygiene Products Annual Report 2025-26 (filed with BSE on 4 September 2026), covering the Board's report, MD&A, the secretarial audit, the auditor's report and CARO annexure, and notes 1–74 of the financial statements; company BSE filings (Q3 FY26 board outcome and limited review report, 13 February 2026, read from the filed PDF; FY26 results, 28 May 2026; Q1 FY27 results, 13 August 2026; MD stake-sale disclosure, 25 August 2025; postal ballot results, 6 April 2026); FY25 directors' report and MD&A via indiainfoline.com; screener.in, indmoney, trendlyne, scanx.trade, MarketsMojo, multibagg.ai, whalesbook.com, investywise.com and 5paisa for prices and secondary summaries. All accessed 11 October 2026.