Bannari Amman Spinning Mills Ltd

Consumer Cyclical — Textile Manufacturing · NSE

₹21.51+₹0.01 (+0.05%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:44 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bannari Amman Spinning Mills Ltd engages in the textile business in India and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees3,249

Annual revenue₹858 Cr

How does it make money?

Turns over ₹858 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 3,249 employees supports ₹26.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹26.4 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 10.7% 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 -17% while net margin moved -156% 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-17%

Margin effect-156%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.1% a year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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.

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

7.2x

1.3Y Median

22.2x

16 monthly readings · mean 20.2x · range 12.2x–26.5x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 67% below its 1.3y median of 22.2x. 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 90% below the peer median of 69.2x.

vs. its own history

Cheap

22.2x median over 16 months · -67%

vs. sector peers

Cheap

69.2x median of 4 peers · -90%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 2.6% to 9.9% over 3 years.
Debt is being paid down
Total debt is down 30% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -7.0% to 2.9%.
Return on capital is rising
ROCE has improved from -0.9% to 10.7%.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 high

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.6% to 9.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 30% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 67% 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.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.7x 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.

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

1EBITDA margin holds above 8%✓ 9.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹46 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 10.7%
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

5 good · 4 neutral · 2 weak

Market Cap

₹172 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.2x

Cheap

Cheap against the generic band

P/B Ratio

0.36x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.97

Profitable

Profitable on a per-share basis

ROE

2.9%

Weak

Weak capital efficiency

ROCE

10.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

-0.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

171.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.16%

Modest

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

Free Cash Flow

₹46 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

1.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.2%

Average

Average margins

Net Margin

2.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.06

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.71

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

22.8 / 24.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,036 Cr	₹914 Cr	₹872 Cr	₹858 Cr	-6.1%
EBITDA	₹27 Cr	₹52 Cr	₹65 Cr	₹85 Cr	+45.7%
EBITDA Margin	2.6%	5.7%	7.5%	9.9%	—
PAT (Net Profit)	-₹30 Cr	-₹22 Cr	₹7 Cr	₹14 Cr	—
EPS	₹-3.34	₹-1.07	₹1.14	₹1.76	—
ROE	-7.0%	-5.5%	1.7%	2.9%	—
ROCE	-0.9%	2.4%	6.8%	10.7%	—
Total Debt	₹566 Cr	₹507 Cr	₹467 Cr	₹397 Cr	-11.2%
Free Cash Flow	-₹44 Cr	₹108 Cr	-₹3 Cr	₹46 Cr	—

🔴 Revenue has shrunk at 6.1% a year over 3 years.

🟢 EBITDA has grown at 45.7% a year over 3 years.

🟢 EBITDA Margin has risen from 2.6% to 9.9% over 3 years (+7.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹30 Cr to ₹14 Cr.

🟢 EPS has turned positive, from ₹-3.34 to ₹1.76.

🟢 ROE has risen from -7.0% to 2.9% over 3 years (+9.9 pts).

🟢 ROCE has risen from -0.9% to 10.7% over 3 years (+11.5 pts).

🟢 Total Debt has shrunk at 11.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹44 Cr to ₹46 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹984 Cr

Total Liabilities

₹511 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹117 Cr

Capex

-₹71 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

49.6%

Corporate Actions

Dividend Rate

₹0.25

Ex-Dividend Date

03 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

1 positive5 general

Bannari Amman Spinning Mills (NSEI:BASML) - Stock Analysis

Simply Wall Street, 14 Oct

Bannari Amman Spinning Mills Stock Analysis

Kalkine India, 08 Oct

Bannari Amman Spinning Mills: 7 Stock Signals to Watch

Univest, 22 Sept

Bannari Amman Spinning Mills returns to profit in FY26

scanx.trade, 29 May

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

Value Research, 31 Aug

Bannari Amman Spinning Mills consolidated net profit rises 200.22% in the June 2026 quarter

Business Standard, 10 AugResults

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

Watch Items

Revenue growth is negative (-0.4%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Profitability

WeakGrowth · Risk

Points for each in the Score ↑

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. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑