Arabian Petroleum Ltd. (ARABIAN)
SME CapPower stocks · SME cap · NSE
Established in 2006, Arabian Petroleum Ltd is a manufacturer of industrial and automotive lubricants, headquartered in Mumbai, India. The company develops and supplies specialized lubrication solutions across automotive, engineering, manufacturing, infrastructure, and other industrial sectors, focusing on high-performance products.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Investable fundamentals, management trust is acceptable, price trend supports entry, and recent execution is mixed.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Excellent · 77/100Rev +61% YoY · PAT +67% YoY · +27% QoQ · operating leverage · margin compression
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹232 Cr | +61.1% | +27.5% |
| EBITDA | ₹9 Cr | +12.5% | +0.0% |
| Operating margin | 3.7% | -230 bps | -130 bps |
| PAT | ₹5 Cr | +66.7% | -16.7% |
| PAT margin | 2.2% | -58 bps | -114 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
Arabian Petroleum reported strong FY26 consolidated revenue growth of 44.88% YoY to ₹41,327.37 lakhs, with PAT increasing 23.47% YoY to ₹1,121.66 lakhs, despite a significant decline in EBITDA margin.
The company, a lubricants manufacturer, reported strong top-line growth but significant margin compression in FY26. While strategic expansions and order wins are positive, the decline in EBITDA and PAT margins raises concerns about profitability sustainability. The provided 'Power' sector lens is not applicable; analysis uses a manufacturing lens.
APL's Volume Contribution by Segment (FY26)
Latest issuer-disclosed distribution across 2 reported categories.
Strategic Subsidiaries
Arzol Petroleum Trading FZE (Dubai) and Lavisa Technologies Pvt. Ltd. (Specialty Metalworking) commenced revenue generation in H2 FY26.
Defense Sector Positioning
DRDO Technology Transfer for Universal Recoil Fluids and Low Temperature Coolants provides near-monopoly positioning.
Food-Grade & Pharma Market Entry
NSF (US FDA) approval for food-grade lubricants unlocks entry into the high-compliance Pharma sector.
Transformer Oil Segment
BIS Certification for transformer oil segment unlocks major revenue pathways for government tenders and OEM procurement.
De-bottlenecking & Capacity Expansion
M.O.U. signed for interim expansion, actively resolving bottlenecks in small pack SKU filling.
Backward Integration
Fatty Acid Amides production commenced December 2025, reducing import dependency and laying foundation for esterification.
Global Market Access
Arzol Petroleum Trading FZE in Dubai strengthens access to the 'Mecca of the oil market' and adds 4 new countries.
High-Margin Specialty Segments
Lavisa Technologies focuses on value-added specialty metalworking lubricants, expected to enhance portfolio and margins.
Defense Sector Technology Advantage
Only a few national players hold similar technology for DRDO-transferred defense products, ensuring long-term recurring revenue.
Margin Compression
Consolidated EBITDA margin declined by 20.19% YoY and PAT margin by 14.78% YoY in FY26.
Increased Liabilities
Current liabilities more than doubled YoY from ₹4,637.95 lakhs to ₹10,122.72 lakhs as of March 31, 2026.
Subsidiary Losses
Lavisa Technologies Pvt. Ltd. reported a loss of ₹6.53 lakhs for FY26.
Competitive Dynamics
Forward-looking statements are subject to risks including competitive dynamics in the lubricants and greases industry.
Raw Material Price Volatility
Backward integration efforts aim to reduce import dependency on key raw material inputs, indicating exposure to price fluctuations.
Operational Challenges
The Company may face operational challenges and risks that could impact its growth and expansion plans.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
Full-year YoY provides a macro view of growth and overall financial health, while H2 FY26 vs H1 FY26 (QoQ equivalent) shows sequential momentum and the impact of recent strategic initiatives and subsidiary contributions.
Revenue Growth
FY26 Revenue from Operations was ₹41,327.37 lakhs, up 44.88% YoY from ₹28,524.66 lakhs in FY25.
Production Capacity
Current production capacity per annum is 48,000 KL.
Order Pipeline
Secured a 2-year BHEL contract, new rate contracts from MOIL & BEML, and a second repeat order from BRO Bhutan in H2 FY26.
EBITDA Margin
Consolidated EBITDA margin declined to 4.87% in FY26 from 6.10% in FY25, a 20.19% YoY decrease.
Subsidiary Profitability
Arzol FZE is expected to achieve profitability from FY27.
Margin Enhancement
Lavisa Technologies is expected to enhance the specialty product portfolio and improve margins.
Future Volume Growth
Post de-bottlenecking, utilization headroom will be created for the next phase of volume growth.
High-Value Tender Targeting
Larger high-value defense tenders are targeted for July–August.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| EBITDA Margin | 4.87% (FY26) | Reversal of margin compression and improvement towards previous levels (6.10% in FY25). |
| Subsidiary Performance | Arzol FZE profitable (₹3.14 lakhs PAT), Lavisa loss-making (₹6.53 lakhs loss) in FY26. | Arzol FZE achieving expected profitability from FY27 and Lavisa turning profitable. |
| Order Book Conversion | Active contracts with BHEL, MOIL, BEML, BRO Bhutan, ONGC. | Conversion of targeted high-value defense tenders and sustained growth in institutional orders. |
| Capacity Utilization | De-bottlenecking underway for small pack SKU filling. | Increased utilization rates post-expansion and sustained volume growth. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
77Bullishfull bull SMA stack · SMA20 +22.0% / mo · MACD −
Technical chart
ARABIANdaily · 1Y · AUTO+16.3%Daily technical trend read
Bullish setupTrend is constructive — long-term trend unclear. RSI 59.
- SMA20 rising (~18.0% over last month) — short-term momentum positive.
- RSI(14) at 59 — rising, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 9% off 52W high · 36% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation & score drivers
U-Score 60 · UNDERVALUED · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 60 · UNDERVALUED · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
UNDERVALUEDWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Fair-value margin of safety is positive at 66.3%.
- Valuation contributes 26/30 to the score.
- Growth contributes 18/25 to the score.
Main drags
- Penalty bucket subtracts 8 points.
- Cash flow is weaker at 0/10; verify the latest quarterly trend.
- Quality is weaker at 11/20; verify the latest quarterly trend.
Cyclical valuation: normalized earnings, not just trailing PE
Cyclical companies can look cheapest near peak profits, so IndiaPulse flags value-trap risk separately.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: -1 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 35th percentile of the scored universe and 35th percentile within Power. Main check: cash conversion is weak at 28/100.
Healthy Trust Lite: Promoter holding is 73.5%. Key concern: Operating cash flow is negative at ₹-15 Cr.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Power: 35th pctile, median 65 · SME: 41st pctile, median 64
5 documents have extracted text, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter holding is 73.5%.
- ▸Promoter pledge is zero.
- ▸OPM spread across recent quarters is 2.3%.
Trust risks
- ▸Operating cash flow is negative at ₹-15 Cr.
- ▸Only 1 years of positive FCF.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 8.37
- P/B
- 1.36
- EV/EBITDA
- 7.47
- Market Cap
- 93.90Cr
Profitability
- ROE
- 17.60%
- ROCE
- 18.40%
- ROA
- 6.40%
- Dividend Y
- —
Growth (CAGR)
- Revenue 5Y
- 25.55%
- EPS 5Y
- 25.36%
- Revenue 3Y
- 17.00%
- EPS 3Y
- 17.00%
Balance Sheet
- Debt/Equity
- 0.70
- Interest Coverage
- 4.50×
- Altman Z
- 3.91
- Book Value
- 63.60
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 1/5
- OCF
- -15.00 Cr
- EPS TTM
- 10.30
Shareholding
- Promoter Hold
- 73.45%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 74%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable names in Power, ranked by similarity
Peers
Business-comparable names in Power, ranked by similarity
Peers
Business-comparable peers in Power — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.