Amarjothi Spinning Mills Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹155.88+₹3.88 (+2.55%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Amarjothi Spinning Mills Limited manufactures and processes yarns and fibers in India. The company provides cotton, viscose, polyester, slub, neps, fancy, grindle, and cut thread melange yarn. It generates wind power through windmills.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees241

Annual revenue₹222 Cr

How does it make money?

Turns over ₹222 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 241 employees supports ₹91.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹91.9 lakh

Who are its competitors?

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

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 8.3% 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.

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 +6% while net margin moved -13% 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+6%

Margin effect-13%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.0% — barely ahead of inflation
✗ Profit has declined at 2.6% a year

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

88/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

8.2x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 88% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.1x

PEG

0.34

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 11% over 3 years.
Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Inventory building faster than salesFinancial
Inventory up 92% against revenue up 6% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 43% against revenue up 6% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹5 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 43% against revenue up 6%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 2.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.

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

1EBITDA margin holds above 12%✓ 13.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 3.0x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✗ 2.0% CAGR
Latest reported year was 43.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹5 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

7 / 10 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

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹105 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.2x

Cheap

Cheap against the generic band

P/B Ratio

0.53x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹19.08

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

8.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

43.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

24.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.41%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹5 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

8.1%

Average

Average margins

Net Margin

4.1%

Average

Average bottom-line conversion

Current Ratio

5.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.26

Defensive

Steadier than the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

RSI (14)

57.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹209 Cr	₹202 Cr	₹229 Cr	₹222 Cr	+2.0%
EBITDA	₹32 Cr	₹30 Cr	₹33 Cr	₹30 Cr	-1.2%
EBITDA Margin	15.1%	14.6%	14.2%	13.8%	—
PAT (Net Profit)	₹10 Cr	₹8 Cr	₹11 Cr	₹10 Cr	-2.6%
EPS	₹15.25	₹12.12	₹16.81	₹14.11	-2.6%
ROE	5.8%	4.2%	5.9%	4.8%	—
ROCE	10.0%	8.5%	9.6%	8.3%	—
Total Debt	₹63 Cr	₹65 Cr	₹52 Cr	₹56 Cr	-3.8%
Free Cash Flow	₹31 Cr	₹6 Cr	₹13 Cr	₹5 Cr	-44.6%

🟡 Revenue has been broadly flat over 3 years (2.0% a year).

🟡 EBITDA has been broadly flat over 3 years (-1.2% a year).

🔴 EBITDA Margin has fallen from 15.1% to 13.8% over 3 years (-1.4 pts).

🔴 PAT (Net Profit) has shrunk at 2.6% a year over 3 years.

🔴 EPS has shrunk at 2.6% a year over 3 years.

🔴 ROE has fallen from 5.8% to 4.8% over 3 years (-1.1 pts).

🔴 ROCE has fallen from 10.0% to 8.3% over 3 years (-1.8 pts).

🟢 Total Debt has shrunk at 3.8% a year over 3 years.

🔴 Free Cash Flow has shrunk at 44.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹309 Cr

Total Liabilities

₹110 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹9 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.4%

Corporate Actions

Dividend Rate

₹2.2

Ex-Dividend Date

21 Aug 2026

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 positive1 negative3 general

Amarjothi Spinning Mills launches Saksham Niveshak campaign for KYC updates and dividend protection

scanx.trade, 18 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Amarjothi Spinning Mills Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Amarjothi Spinning Mills sets Aug 28 for 38th AGM

scanx.trade, 28 Aug

Amarjothi Spinning Mills Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Amarjothi Spinning Mills fixes record date for 22% dividend

scanx.trade, 29 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Amarjothi Spinning Mills Ltd Downgraded to Strong Sell Amid Technical Weakness and Flat Financials

MarketsMojo, 16 OctAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Risk

WeakGrowth · Profitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑