7NR Retail Limited

Consumer Cyclical — Apparel Retail · BSE

₹7.10+₹0.06 (+0.85%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of 7NR Retail Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

7NR Retail Limited engages in the wholesale and retail of textile products in India. It offers readymade garments, suiting-shirting, fabrics, and other textile products. 7NR Retail Limited was incorporated in 2012 and is based in Ahmedabad, India.

IndustryApparel Retail

SectorConsumer Cyclical

Annual revenue₹13 Cr

How does it make money?

Turns over ₹13 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation.

EBITDA margin7.4%

Net margin1.2%

Who are its competitors?

The closest listed comparisons in its industry are TRENT LTD, TITAN COMPANY LIMITED, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TRENT LTDP/E 87.2x · ROE 25.9%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 0.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE0.6%

ROE0.5%

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -73% while net margin moved +135% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-73%

Margin effect+135%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 35.8% a year
✗ Profit has declined at 14.6% a year
✗ Latest-year revenue growth of -42.4% is below the longer-term trend — momentum is fading
✗ Profit fell 54.4% in the latest year

Quality vs. Valuation

Company Quality

42/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

14.2x

3Y Median

552.2x

40 monthly readings · mean 403.7x · range 25.2x–902.2x

Sector Median

69.9x

median of 3 sector peers

🟢Current valuation is approximately 97% below its 3y median of 552.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 80% below the peer median of 69.9x.

vs. its own history

Cheap

552.2x median over 40 months · -97%

vs. sector peers

Cheap

69.9x median of 3 peers · -80%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

14.2x

P/B

0.68x

EV/EBITDA

94.2x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 1.3% to 7.4% over 3 years.
Valuation below its historical average
At 14.2x the stock trades 97% below its own median of 552.2x.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention3

Debt is rising
Total debt is up 119% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 53% against revenue growth of -73% — stock may not be moving.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 119% over 3 years, from ₹2 Cr to ₹5 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.3x — little room if earnings dip.
🔴Inventory building faster than salesFinancial
Inventory up 53% against revenue up -73% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.5x to 1.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 38% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.3% to 7.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 97% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 80% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 5.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 5%✓ 7.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 0.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 2 neutral · 5 weak

Market Cap

₹84 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.2x

Cheap

Cheap against the generic band

P/B Ratio

0.68x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.5

Profitable

Profitable on a per-share basis

ROE

0.5%

Weak

Weak capital efficiency

ROCE

0.6%

Weak

Low return on total capital employed

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

-42.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

-54.4%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹7.1

Operating Margin

51.4%

Good

Healthy core-business profitability

Net Margin

13.1%

Good

Strong bottom-line conversion

Current Ratio

5.96

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.57

Defensive

Steadier than the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

6.8 / 6.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

62.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹48 Cr	₹12 Cr	₹21 Cr	₹13 Cr	-35.8%
EBITDA	₹1 Cr	-₹1 Cr	₹1 Cr	₹1 Cr	+16.1%
EBITDA Margin	1.3%	-6.5%	6.9%	7.4%	—
PAT (Net Profit)	₹0 Cr	-₹1 Cr	₹0 Cr	₹0 Cr	-14.6%
EPS	₹0.01	₹-0.4	₹0.12	₹0.05	+77.1%
ROE	0.8%	-3.9%	1.1%	0.5%	—
ROCE	1.2%	-3.5%	2.1%	0.6%	—
Total Debt	₹2 Cr	₹6 Cr	₹5 Cr	₹5 Cr	+29.9%
Free Cash Flow	-₹19 Cr	-₹3 Cr	₹4 Cr	-₹2 Cr	—

🔴 Revenue has shrunk at 35.8% a year over 3 years.

🟢 EBITDA has grown at 16.1% a year over 3 years.

🟢 EBITDA Margin has risen from 1.3% to 7.4% over 3 years (+6.1 pts).

🔴 PAT (Net Profit) has shrunk at 14.6% a year over 3 years.

🟢 EPS has grown at 77.1% a year over 3 years.

🟡 ROE has held roughly flat at 0.5% over 3 years.

🟡 ROCE has held roughly flat at 0.6% over 3 years.

🔴 Total Debt has grown at 29.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹40 Cr

Total Liabilities

₹11 Cr

Total Debt

₹5 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹2 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.1%

Corporate Actions

Ex-Dividend Date

19 Sept 2019

Peer Comparison

Company	P/E	ROE
TRENT LTD	87.2x	25.9%
TITAN COMPANY LIMITED	68.5x	36.7%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

3 mixed3 general

7NR Retail Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Compare BISLERI GUJARAT with

Equitymaster, 11 Oct

7NR Retail board to consider acquisition of Cultureantique Jewellery

scanx.trade, 03 JulM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

7NR Retail to Acquire Cultureantique Jewellery Via 9 Crore Share Swap

Whalesbook, 01 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

7NR Retail reports standalone net profit of Rs 1.13 crore in the June 2026 quarter

Business Standard, 30 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

7NR Retail Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Watch Items

Revenue growth is negative (-42.4%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak4.1/20

🟡ProfitabilityModerate7.9/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 5%7.4%
✗Debt / EBITDA falls below 3x5.1x
✗Free cash flow remains positive-₹2 Cr
✗Interest cover stays above 3x1.3x
✗ROCE stays above 8%0.6%