Avax Apparels and Ornaments Limited

Consumer Cyclical — Apparel Manufacturing · BSE

₹58.28+₹2.77 (+4.99%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, 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, 6:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Avax Apparels and Ornaments Limited engages in the wholesale trading and manufacturing of knitted cloth in India.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Employees17

Annual revenue₹42 Cr

How does it make money?

Turns over ₹42 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 17 employees supports ₹2.44 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.44 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 45.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 36.7% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE25.9%

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 +182% while net margin moved +51% 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+182%

Margin effect+51%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

59/ 100

Fair

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

16.3x

2Y Median

12.2x

23 monthly readings · mean 13.7x · range 5.6x–23.6x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 34% above its 2y median of 12.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 76% below the peer median of 69.2x.

vs. its own history

Expensive

12.2x median over 23 months · +34%

vs. sector peers

Cheap

69.2x median of 4 peers · -76%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.0x

PEG

0.26

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 6.7% to 11.4% over 3 years.
High return on capital employed
ROCE of 45.2% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 39.3% to 31.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 54.7% to 45.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴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.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 383% against revenue up 182% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 45.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 6.7% to 11.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 76% 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?

The price already assumes success
The stock trades 34% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 39.3% to 31.0%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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

1Revenue growth stays above 31% a year✓ 41.4% CAGR
Latest reported year was 10.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 42%✓ 45.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

₹48 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.3x

Fair

Fairly valued against the generic band

P/B Ratio

5.06x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹3.57

Profitable

Profitable on a per-share basis

ROE

36.7%

Strong

Strong capital efficiency

ROCE

45.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

10.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

107.9%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

23.0%

Good

Assets are working hard

Operating Margin

12.4%

Average

Average margins

Net Margin

7.1%

Average

Average bottom-line conversion

Current Ratio

2.57

Comfortable

Healthy short-term liquidity

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

40.2 / 41.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

100.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹15 Cr	₹22 Cr	₹34 Cr	₹42 Cr	+41.4%
EBITDA	₹1 Cr	₹2 Cr	₹3 Cr	₹5 Cr	+68.1%
EBITDA Margin	6.7%	9.5%	8.0%	11.4%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹2 Cr	₹3 Cr	+62.3%
EPS	₹0.84	₹1.66	₹2.47	—	—
ROE	39.3%	43.9%	24.7%	31.0%	—
ROCE	54.7%	63.7%	36.6%	45.2%	—
Total Debt	—	₹1 Cr	₹1 Cr	₹4 Cr	—
Free Cash Flow	-₹1 Cr	-₹1 Cr	-₹2 Cr	-₹3 Cr	—

🟢 Revenue has grown at 41.4% a year over 3 years.

🟢 EBITDA has grown at 68.1% a year over 3 years.

🟢 EBITDA Margin has risen from 6.7% to 11.4% over 3 years (+4.6 pts).

🟢 PAT (Net Profit) has grown at 62.3% a year over 3 years.

🔴 ROE has fallen from 39.3% to 31.0% over 3 years (-8.4 pts).

🔴 ROCE has fallen from 54.7% to 45.2% over 3 years (-9.5 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹15 Cr

Total Liabilities

₹5 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.3%

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 positive4 general

Avax Apparels And Ornaments Ltd Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Avax Apparels and Ornaments (BSE: AVAX) Profit Rises 142%: Sales, ROCE and P/E Explained

Kalkine India, 02 OctResults

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

Avax Apparels and Ornaments Li Share Price

Upstox, 30 Mar

Avax Apparels shareholders approve name change to Avax Limited

scanx.trade, 18 Sept

3:1 Bonus Share & 1:2 Stock Split: Multibagger SME Stock Hit an All-Time High on February 18

Dalal Street Investment Journal, 18 FebCapital return

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

141% jump in 6 months: This multibagger stock will turn ex-bonus today

Business Today, 07 Apr

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Profitability

WeakValuation · 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. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑