Damodar Industries Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹27.01+₹0.46 (+1.73%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Damodar Industries Limited manufactures and sells synthetic blended yarns in India. It exports its products to various countries across Europe, South Africa, South America, Australia, Korea, Belgium, Singapore, Italy, Egypt, and the Gulf countries.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees507

Annual revenue₹430 Cr

How does it make money?

Turns over ₹430 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 507 employees supports ₹84.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin9.0%

Net margin1.2%

Revenue / employee₹84.8 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.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 11.6% 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.

ROCE11.6%

ROE3.6%

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 -37% while net margin moved +971% 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-37%

Margin effect+971%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 3.6% is weak

Quality vs. Valuation

Company Quality

48/ 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

11.0x

3Y Median

16.2x

40 monthly readings · mean 54.4x · range 8.6x–168.2x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 16.2x. 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 84% below the peer median of 69.2x.

vs. its own history

Cheap

16.2x median over 40 months · -32%

vs. sector peers

Cheap

69.2x median of 4 peers · -84%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.0x

P/B

0.43x

EV/EBITDA

5.9x

PEG

0.12

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.0% to 9.0% over 3 years.
Debt is being paid down
Total debt is down 44% over 3 years.
Valuation below its historical average
At 11.0x the stock trades 32% below its own median of 16.2x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 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 1.4x — little room if earnings dip.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.0% to 9.0%. 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 44% 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 32% 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 84% 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 debt load needs earnings to hold up
Debt is 4.3x 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 7%✓ 9.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.3x
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✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹33 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 9%✓ 11.6%
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 · 4 neutral · 1 weak

Market Cap

₹63 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.0x

Cheap

Cheap against the generic band

P/B Ratio

0.43x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.45

Profitable

Profitable on a per-share basis

ROE

3.6%

Weak

Weak capital efficiency

ROCE

11.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.13x

Moderate

Moderate leverage

Revenue Growth (YoY)

47.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.0%

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

₹33 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹27.01

Operating Margin

4.4%

Weak

Thin margins leave little room for error

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.41

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.92

Market-like

Moves roughly in line with the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

27.4 / 27.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹683 Cr	₹715 Cr	₹421 Cr	₹430 Cr	-14.3%
EBITDA	₹48 Cr	₹53 Cr	₹30 Cr	₹39 Cr	-6.8%
EBITDA Margin	7.0%	7.4%	7.2%	9.0%	—
PAT (Net Profit)	₹1 Cr	₹5 Cr	₹5 Cr	₹5 Cr	+88.9%
EPS	₹0.34	₹2.24	₹2.32	₹2.31	+89.4%
ROE	0.7%	4.4%	3.8%	3.6%	—
ROCE	10.1%	15.2%	11.2%	11.6%	—
Total Debt	₹298 Cr	₹266 Cr	₹188 Cr	₹168 Cr	-17.5%
Free Cash Flow	₹43 Cr	₹59 Cr	₹35 Cr	₹33 Cr	-8.5%

🔴 Revenue has shrunk at 14.3% a year over 3 years.

🔴 EBITDA has shrunk at 6.8% a year over 3 years.

🟢 EBITDA Margin has risen from 7.0% to 9.0% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 88.9% a year over 3 years.

🟢 EPS has grown at 89.4% a year over 3 years.

🟢 ROE has risen from 0.7% to 3.6% over 3 years (+2.9 pts).

🟢 ROCE has risen from 10.1% to 11.6% over 3 years (+1.5 pts).

🟢 Total Debt has shrunk at 17.5% a year over 3 years.

🔴 Free Cash Flow has shrunk at 8.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹342 Cr

Total Liabilities

₹194 Cr

Total Debt

₹168 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹46 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.6%

Corporate Actions

Ex-Dividend Date

15 Jul 2022

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

6 general

Damodar Industries promoter Arun Kumar Biyani raises stake to 35.127%

scanx.trade, 30 Sept

Damodar Industries vs Nifty 50: Share Price Performance Compared

Univest, 15 Sept

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

Value Research, 04 Sept

Damodar Industries Ltd is Rated Sell

MarketsMojo, 06 Oct

Damodar Industries promoter Manju Biyani stake rises to 18.58%

scanx.trade, 30 Sept

Damodar Industries Ltd. Peer Comparison – Compare with Others

Value Research, 27 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate11.6/20

🟡GrowthModest10.5/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.6/10

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.

This thesis breaks if

✓EBITDA margin holds above 7%9.0%
✗Debt / EBITDA falls below 3x4.3x
✗Interest cover stays above 3x1.4x
✓Free cash flow remains positive₹33 Cr
✓ROCE stays above 9%11.6%