Adhata Global Limited

Basic Materials — Lumber & Wood Production · BSE

₹22.62+₹1.07 (+4.97%)

DalalBaazaar Score

33 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, negative free cash flow, the company is currently loss-making.

In simple words: The company is currently losing money, 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, 6:07 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 Adhata Global Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Adhata Global Limited engages in the wholesale of wood and textile products. It offers raw wood, plywood and processed wood products, and timber; and cotton, yarns, fibre, wool, nylon, jute and jute products, and other allied products.

IndustryLumber & Wood Production

SectorBasic Materials

Annual revenue₹3 Cr

How does it make money?

Turns over ₹3 Cr a year. Of every ₹100 of sales, about ₹-50 reaches shareholders as profit, with ₹-42 left at the operating level before interest, tax and depreciation.

EBITDA margin-41.6%

Net margin-49.6%

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?Little sign of one

Returns on capital of -58.8% 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.

ROCE-58.8%

ROE-67.8%

Peer median ROE22.3%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -69% while net margin moved +21% 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-69%

Margin effect+21%

DalalBaazaar Score

33/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ No meaningful P/E — the company is lossmaking

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

20/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

—

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 49% over 3 years.
Return on equity is rising
ROE has improved from -157.8% to -67.8%.
Return on capital is rising
ROCE has improved from -94.7% to -58.8%.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from -36.8% to -41.6% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 41% against revenue growth of -69% — stock may not be moving.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -6.5x — little room if earnings dip.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹2 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 41% against revenue up -69% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 0.4x to -6.5x.
🟡Margins are compressingFinancial
EBITDA margin is down 4.8 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 49% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from -36.8% to -41.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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
4 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 -44%✓ -41.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -6.5x
How much operating profit can fall before interest stops being comfortably covered.
4ROCE stays above 8%✗ -58.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

0 good · 4 neutral · 7 weak

Market Cap

₹11 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹-3.49

Loss-making

Negative earnings per share — the business is losing money

ROE

-67.8%

Weak

Weak capital efficiency

ROCE

-58.8%

Weak

Low return on total capital employed

Debt/Equity

0.93x

Moderate

Moderate leverage

Revenue Growth (YoY)

-39.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-942.8%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹22.62

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.11

Adequate

Adequate, but no real cushion

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

21.1 / 22.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

89.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹5 Cr	₹5 Cr	₹3 Cr	-32.4%
EBITDA	-₹4 Cr	-₹0 Cr	₹1 Cr	-₹1 Cr	—
EBITDA Margin	-36.8%	-9.1%	11.3%	-41.6%	—
PAT (Net Profit)	-₹4 Cr	-₹1 Cr	-₹0 Cr	-₹2 Cr	—
EPS	₹-9.11	₹-1.96	₹-0.33	₹-3.4	—
ROE	-157.8%	-51.5%	-9.4%	-67.8%	—
ROCE	-94.7%	-16.6%	2.9%	-58.8%	—
Total Debt	₹4 Cr	₹3 Cr	₹3 Cr	₹2 Cr	-19.9%
Free Cash Flow	-₹0 Cr	-₹0 Cr	-₹1 Cr	-₹1 Cr	—

🔴 Revenue has shrunk at 32.4% a year over 3 years.

🔴 EBITDA Margin has fallen from -36.8% to -41.6% over 3 years (-4.8 pts).

🟢 ROE has risen from -157.8% to -67.8% over 3 years (+90.0 pts).

🟢 ROCE has risen from -94.7% to -58.8% over 3 years (+35.9 pts).

🟢 Total Debt has shrunk at 19.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹13 Cr

Total Liabilities

₹10 Cr

Total Debt

₹2 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.3%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 mixed5 general

Compare with

Equitymaster, 08 Oct

Compare with

Equitymaster, 09 Oct

Compare with NEELKANTH TECH.

Equitymaster, 09 Oct

Adhata Global Appoints M/s. Manas Ghosh & Co. as Internal Auditor for FY 2026-27

scanx.trade, 11 May

Mahindra’s Nanda steps down after 50 years

The Times of India, 26 Apr

Q2 Results Today: Hero MotoCorp, Lemon Tree Hotels, HAL, Glenmark Pharma among 1181 companies to post earnings on Nov 14

Livemint, 14 NovResults

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

Watch Items

Revenue growth is negative (-39.5%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak6.2/15

🔴ValuationDemanding1.5/15

🔴RiskHigh2.5/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -44%-41.6%
✗Free cash flow remains positive-₹1 Cr
✗Interest cover stays above 3x-6.5x
✗ROCE stays above 8%-58.8%