Carnation Industries Limited

Industrials — Metal Fabrication · BSE

₹103.15₹0.00 (0.00%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, 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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Carnation Industries Limited engages in the manufacture of foundry-based engineering goods. The company offers castings; ferrous and non-metals; iron and steel; and other products.

IndustryMetal Fabrication

SectorIndustrials

Employees7

Annual revenue₹2 Cr

How does it make money?

Turns over ₹2 Cr a year. Of every ₹100 of sales, about ₹-8 reaches shareholders as profit, with ₹44 left at the operating level before interest, tax and depreciation. Each of its 7 employees supports ₹24.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹24.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA 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 6.5% 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 ROE18.7%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 151.7x is demanding — it needs sustained high growth to justify
✗ P/E is 636% above its own historical median of 20.6x — expensive by its own standards
✗ P/B of 23.57x is a steep premium to book

Quality vs. Valuation

Company Quality

50/ 100

Average

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

Valuation

23/ 100

Expensive

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

151.7x

1.3Y Median

20.6x

16 monthly readings · mean 19.6x · range 7.9x–25.0x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 636% above its 1.3y median of 20.6x. 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 1147% above the peer median of 12.2x.

vs. its own history

Expensive

20.6x median over 16 months · +636%

vs. sector peers

Expensive

12.2x median of 4 peers · +1147%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

66.2x

PEG

—

Red Flags

7 items require attention · 5 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 679% over 3 years, from ₹2 Cr to ₹14 Cr.
🔴High leverageFinancial
Debt/Equity of 9.12x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 878.7x to 1.4x.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 463% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 18.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 636% 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.
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
5 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

1EBITDA margin holds above 42%✓ 43.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 18.4x
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✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 6.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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)
✗ 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 · 3 neutral · 6 weak

Market Cap

₹36 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

151.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

23.57x

Rich

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

EPS (TTM)

₹0.68

Profitable

Profitable on a per-share basis

ROE

16.6%

Strong

Strong capital efficiency

ROCE

6.5%

Weak

Low return on total capital employed

Debt/Equity

9.12x

High

High leverage

Revenue Growth (YoY)

Not available

No data

Source didn't return this field

Profit Growth (YoY)

-109.3%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

7.7%

Average

Average asset productivity

Operating Margin

87.5%

Good

Healthy core-business profitability

Net Margin

8.5%

Average

Average bottom-line conversion

Current Ratio

1.04

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.36

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

103.2 / 100.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

0.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
EBITDA	-₹0 Cr	-₹0 Cr	-₹0 Cr	₹1 Cr	—
PAT (Net Profit)	-₹1 Cr	-₹0 Cr	₹1 Cr	-₹0 Cr	—
EPS	₹-19.89	₹-1.43	₹4.12	₹-0.38	—
ROE	—	—	87.3%	-8.8%	—
ROCE	—	—	80.8%	6.5%	—
Total Debt	₹2 Cr	₹2 Cr	₹0 Cr	₹14 Cr	+98.3%
Free Cash Flow	-₹0 Cr	-₹0 Cr	-₹1 Cr	-₹1 Cr	—

🟢 EBITDA has turned positive, from -₹0 Cr to ₹1 Cr.

🔴 ROE has fallen from 87.3% to -8.8% over 3 years (-96.1 pts).

🔴 ROCE has fallen from 80.8% to 6.5% over 3 years (-74.3 pts).

🔴 Total Debt has grown at 98.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹17 Cr

Total Liabilities

₹15 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.4%

Corporate Actions

Ex-Dividend Date

14 Sept 2017

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 positive1 mixed4 general

Carnation Industries turns profitable with ₹52.83 lakh net profit in Q2FY27

scanx.trade, 18 Oct

Carnation Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Carnation Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Carnation Industries dispatches AGM notice for August 26 meeting

scanx.trade, 03 Aug

Filatex India consolidated net profit rises 19.33% in the June 2026 quarter

Business Standard, 31 JulResults

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

Q4 results 2026: L&T to Hero Motocorp among companies to declare Q4 results today

Livemint, 05 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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

StrongProfitability

MiddlingBusiness Quality · Growth

WeakFinancial Health · Valuation · 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. 5 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑