Candour Techtex Limited

Industrials — Specialty Industrial Machinery · BSE

₹61.19−₹1.24 (−1.99%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

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, 6:05 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 Candour Techtex Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Candour Techtex Limited engages in the manufacture and trading of textiles, plastics, and other items in India. The company operates through the Textile, Plastic, Trading, and Technical Textiles segments.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees10

Annual revenue₹58 Cr

How does it make money?

Turns over ₹58 Cr a year. Of every ₹100 of sales, about ₹-3 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 10 employees supports ₹5.81 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin9.8%

Net margin-2.5%

Revenue / employee₹5.81 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 0.7% 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.

ROCE0.7%

ROE-1.1%

Peer median ROE17.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -3% while net margin moved -165% 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-3%

Margin effect-165%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 9.2 points over the period

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

30/ 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

1.03x

EV/EBITDA

29.7x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 7.8% to 9.8% over 3 years.
Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention5

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 8.0% to -1.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 6.3% to 0.7% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 48% against revenue growth of -3% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 267% against revenue growth of -3% — stock may not be moving.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 0.5x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹1 Cr in the latest reported year.
🔴Receivables growing faster than salesFinancial
Receivables up 48% against revenue up -3% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 267% against revenue up -3% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.5x to 0.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹41 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 44% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.8% to 9.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 48% against revenue up -3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 8.0% to -1.1%. 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.

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

1EBITDA margin holds above 8%✓ 9.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹41 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.5x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 0.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

2 good · 2 neutral · 7 weak

Market Cap

₹149 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

1.03x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.66

Loss-making

Negative earnings per share — the business is losing money

ROE

-1.1%

Weak

Weak capital efficiency

ROCE

0.7%

Weak

Low return on total capital employed

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

-81.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-318.3%

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

-₹41 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹61.19

Operating Margin

-30.5%

Weak

Thin margins leave little room for error

Net Margin

-4.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.39

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

66.7 / 66.5

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

21.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹60 Cr	₹185 Cr	₹188 Cr	₹58 Cr	-0.9%
EBITDA	₹5 Cr	₹4 Cr	₹9 Cr	₹6 Cr	+7.1%
EBITDA Margin	7.8%	2.1%	4.7%	9.8%	—
PAT (Net Profit)	₹2 Cr	-₹1 Cr	₹1 Cr	-₹1 Cr	—
EPS	₹1.36	₹-0.62	₹0.04	₹-0.76	—
ROE	8.0%	-3.8%	1.7%	-1.1%	—
ROCE	6.3%	1.9%	6.8%	0.7%	—
Total Debt	₹21 Cr	₹38 Cr	₹29 Cr	₹23 Cr	+2.4%
Free Cash Flow	-₹19 Cr	-₹19 Cr	₹5 Cr	-₹41 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.9% a year).

🟢 EBITDA has grown at 7.1% a year over 3 years.

🟢 EBITDA Margin has risen from 7.8% to 9.8% over 3 years (+2.0 pts).

🔴 PAT (Net Profit) has turned negative, from ₹2 Cr to -₹1 Cr.

🔴 EPS has turned negative, from ₹1.36 to ₹-0.76.

🔴 ROE has fallen from 8.0% to -1.1% over 3 years (-9.2 pts).

🔴 ROCE has fallen from 6.3% to 0.7% over 3 years (-5.6 pts).

🔴 Total Debt has grown at 2.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹162 Cr

Total Liabilities

₹33 Cr

Total Debt

₹23 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹19 Cr

Capex

-₹23 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

50.4%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 mixed5 general

Candour Techtex Lower Circuit Streak: Day 10 Price and Data

Univest, 16 Oct

Candour Techtex Upper Circuit Streak: Day 2 Price and Data

Univest, 13 Oct

Mangal Keshav Capital Limited Discloses Share Acquisition in Candour Techtex Limited

scanx.trade, 02 MayM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Candour Techtex Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 30 Sept

Candour Techtex Share Price Near 52-Week Low, 4.81% Drop

Univest, 16 Sept

Candour Techtex: अमेरिकेच्या मार्केटमध्ये कंपनीचा मोठा धमाका, **₹4.65 कोटींची** मोठी ऑर्डर मिळाली

Whalesbook, 29 Sept

Watch Items

Revenue growth is negative (-81.9%) on the latest reported period — check if this is one-off or a trend.
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.
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

🔴Business QualityWeak4.7/20

🟡Financial HealthAdequate10.9/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak2.5/15

🟡ValuationFair7.1/15

🔴RiskHigh4/10

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 8%9.8%
✗Debt / EBITDA falls below 3x4.0x
✗Free cash flow remains positive-₹41 Cr
✗Interest cover stays above 3x0.5x
✗ROCE stays above 8%0.7%