Anand Rayons Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹33.42−₹1.58 (−4.51%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Anand Rayons Limited engages in yarns and threads businesses in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees30

Annual revenue₹433 Cr

How does it make money?

Turns over ₹433 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 30 employees supports ₹14.43 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹14.43 Cr

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 11.3% 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 +29% while net margin moved +79% 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+29%

Margin effect+79%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROE of 7.1% is weak

Quality vs. Valuation

Company Quality

57/ 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

6.6x

3Y Median

25.3x

40 monthly readings · mean 67.9x · range 9.9x–239.9x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 74% below its 3y median of 25.3x. 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 90% below the peer median of 69.2x.

vs. its own history

Cheap

25.3x median over 40 months · -74%

vs. sector peers

Cheap

69.2x median of 4 peers · -90%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.3x

PEG

0.21

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 16.4% to 11.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹14 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 63% against revenue up 29% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 43% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 74% 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 90% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 63% against revenue up 29%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 1%✓ 2.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 3.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹14 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 7% a year✓ 8.8% CAGR
Latest reported year was 25.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✓ 11.3%
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

6 good · 3 neutral · 2 weak

Market Cap

₹73 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.6x

Cheap

Cheap against the generic band

P/B Ratio

0.70x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.08

Profitable

Profitable on a per-share basis

ROE

7.1%

Weak

Weak capital efficiency

ROCE

11.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

25.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

92.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

2.3%

Weak

Thin margins leave little room for error

Net Margin

1.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.96

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

35.8 / 39.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹337 Cr	₹344 Cr	₹314 Cr	₹433 Cr	+8.8%
EBITDA	₹7 Cr	₹7 Cr	₹7 Cr	₹12 Cr	+20.1%
EBITDA Margin	2.1%	2.1%	2.2%	2.8%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	₹3 Cr	₹7 Cr	+32.0%
EPS	₹2.1	₹2.09	₹1.89	₹3.38	+17.2%
ROE	9.5%	8.6%	4.5%	7.1%	—
ROCE	16.4%	16.4%	8.3%	11.3%	—
Total Debt	₹34 Cr	₹29 Cr	₹16 Cr	₹36 Cr	+1.9%
Free Cash Flow	₹7 Cr	₹5 Cr	₹10 Cr	-₹14 Cr	—

🟢 Revenue has grown at 8.8% a year over 3 years.

🟢 EBITDA has grown at 20.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 2.8% over 3 years.

🟢 PAT (Net Profit) has grown at 32.0% a year over 3 years.

🟢 EPS has grown at 17.2% a year over 3 years.

🔴 ROE has fallen from 9.5% to 7.1% over 3 years (-2.4 pts).

🔴 ROCE has fallen from 16.4% to 11.3% over 3 years (-5.1 pts).

🟡 Total Debt has been broadly flat over 3 years (1.9% a year).

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹14 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹153 Cr

Total Liabilities

₹51 Cr

Cash & Equivalents

₹34 Cr

Operating Cash Flow

-₹11 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

54.7%

Corporate Actions

Ex-Dividend Date

20 Sept 2019

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

1 positive5 general

Anand Rayons Q1 Results: Net profit surges 97% YoY to ₹2.3 crore

scanx.trade, 11 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Compare with

Equitymaster, 10 Oct

Anand Rayons promoter Anand Bakshi buys 10,377 equity shares

scanx.trade, 02 Oct

ARL Stock Price and Chart — BSE:ARL

TradingView, 05 Jul

Anand Rayons Limited Share Price - Live ARL Stock Price & Chart

Upstox, 22 Oct

Anand Rayons (BSE:542721) - Stock Analysis

Simply Wall Street, 05 Jul

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

WeakBusiness Quality · Profitability · Risk

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 — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑