HP Adhesives Ltd. (HPAL) AI Stock Analysis

• Market Cap: ₹3.73B
• Dividend Yield: 0.94%
• Average Volume (3M): 11.38K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 1.23
• Revenue Growth: 13.33%
• EPS Growth: -21.39%
• Country: IN
• Employees: 614
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.39
• Shares Outstanding: 91,874,730
• 10 Day Avg. Volume: 4,812
• 30 Day Avg. Volume: 11,377
• PEG Ratio: -2.31
• Price to Book (P/B): 2.55
• Price to Sales (P/S): 1.86
• P/FCF Ratio: -114.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: ₹46.00 ▲(7.70% Upside)

HP Adhesives Ltd. has a solid financial foundation with strong revenue growth and improved gross margins. However, declining net profit margins and negative cash flow are significant concerns. The technical analysis indicates a bearish trend with weak momentum, while the valuation suggests moderate pricing. These factors collectively result in a cautious outlook for the stock.

Positive Factors

Revenue Growth

Consistent revenue growth indicates the company's expanding market presence and effective sales strategies, which can drive long-term business success.

Gross Margin Improvement

Improved gross margins suggest effective cost management and pricing strategies, enhancing profitability and competitive positioning over time.

Equity Growth

Growth in equity reflects financial stability and provides a solid foundation for future investments and expansion opportunities.

Negative Factors

Net Profit Margin Decline

Declining net profit margins may indicate challenges in maintaining profitability, which could impact long-term financial health if not addressed.

Negative Free Cash Flow

Consistent negative free cash flow raises concerns about the company's ability to generate cash, potentially limiting growth and investment capacity.

Rising Liabilities

An increase in liabilities could strain financial resources and limit operational flexibility, affecting long-term sustainability if not managed properly.

HP Adhesives Ltd. Business Overview & Revenue Model

Company Description

HP Adhesives Limited manufactures and markets consumer adhesives and sealants products in India. Its products include PVC, cPVC and uPVC, solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants, and PVC pipe lubricant. The company also offer ancillary products, such as ball valves, thread seal, and other tapes and FRP products for drainage and architectural solutions. It sells its products through a network of distributors in India; and exports its products through a network of distributors and direct customers. The company was founded in 1987 and is based in Mumbai, India.

How the Company Makes Money

HP Adhesives Ltd. generates revenue primarily through the sale of its adhesive products to a diverse customer base across multiple industries. The company's revenue streams include direct sales to manufacturers in sectors like construction, woodworking, and automotive, as well as distribution through a network of wholesalers and retailers. A significant portion of HPAL's earnings comes from its ability to innovate and offer specialized adhesive solutions that cater to specific industry needs. Additionally, strategic partnerships and collaborations with other companies and research institutions play a vital role in enhancing product offerings and expanding market reach, thereby contributing to HPAL's overall profitability.

HP Adhesives Ltd. Financial Statement Overview

Summary

HP Adhesives Ltd. shows strong revenue growth and improved gross profit margins, indicating effective cost management. However, the decline in net profit margin and negative free cash flow in 2025 highlight potential profitability and cash generation challenges. The balance sheet is robust with increased equity, but rising liabilities could pose future risks.

Income Statement

HP Adhesives Ltd. demonstrates strong revenue growth momentum with a notable increase in total revenue from 2020 to 2025. Gross profit and net profit margins have shown improvement, with the gross profit margin increasing from 32.24% in 2020 to 37.12% in 2025, indicating enhanced cost management. However, the net profit margin has seen a slight decline in 2025 compared to 2024, reflecting potential challenges in maintaining profitability. Overall, the income statement reflects positive growth trends, but there are signals of potential profitability pressure.

Balance Sheet

HP Adhesives Ltd.'s balance sheet indicates robust growth in stockholders' equity, which has risen significantly from 2020 to 2025, showcasing financial stability. The debt-to-equity ratio has improved over the years, reflecting better leverage management, although total liabilities have increased. The equity ratio remains strong, highlighting a solid foundation of equity financing. Despite these strengths, the increase in liabilities could pose future risks if not managed effectively.

Cash Flow

The cash flow statement of HP Adhesives Ltd. reveals fluctuations in free cash flow, with negative free cash flow in 2025 after a positive figure in 2024. Operating cash flow has decreased substantially from 2024 to 2025, raising concerns about cash generation capabilities. While the company has managed capital expenditures, consistent negative free cash flow in recent years suggests challenges in sustainable cash generation. The operating cash flow to net income ratio indicates that cash generation might not be keeping pace with reported earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.59B	2.53B	2.36B	2.33B	1.65B	1.18B
Gross Profit	948.46M	938.45M	864.78M	647.41M	399.77M	342.42M
EBITDA	276.02M	305.98M	331.69M	205.61M	141.27M	176.15M
Net Income	168.29M	182.44M	205.68M	108.58M	60.06M	100.60M
Balance Sheet
Total Assets	0.00	2.28B	1.98B	1.85B	1.95B	897.79M
Cash, Cash Equivalents and Short-Term Investments	293.79M	293.79M	302.80M	29.40M	490.79M	12.32M
Total Debt	0.00	77.03M	31.64M	85.28M	185.59M	425.92M
Total Liabilities	-1.84B	437.95M	289.17M	363.64M	580.80M	771.20M
Stockholders Equity	1.84B	1.84B	1.69B	1.48B	1.37B	126.59M
Cash Flow
Free Cash Flow	0.00	-40.88M	63.31M	-210.54M	-276.09M	51.26M
Operating Cash Flow	0.00	99.39M	227.84M	-50.47M	-102.12M	215.29M
Investing Cash Flow	0.00	-91.06M	-151.44M	75.44M	-293.44M	-162.27M
Financing Cash Flow	0.00	15.25M	-72.43M	-123.24M	864.05M	50.41M

HP Adhesives Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 42.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:HPAL, the sentiment is Negative. The current price of 42.71 is above the 20-day moving average (MA) of 42.03, below the 50-day MA of 44.74, and below the 200-day MA of 48.35, indicating a bearish trend. The MACD of -1.05 indicates Positive momentum. The RSI at 31.73 is Neutral, neither overbought nor oversold. The STOCH value of 12.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:HPAL.

HP Adhesives Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHEMBOND	70 Outperform	₹2.12B	9.28	―	1.11%	-37.34%	-45.55%
PREMIERPOL	70 Neutral	₹4.35B	15.06	―	0.37%	3.39%	6.48%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
DICIND	59 Neutral	₹4.30B	21.56	―	0.82%	1.34%	283.51%
HPAL	56 Neutral	₹3.73B	23.06	―	0.94%	13.33%	-21.39%
VIKASECO	52 Neutral	₹2.87B	29.33	―	―	7.61%	-50.76%
SEYAIND	44 Neutral	₹477.74M	-6.12	―	―	―	―