Dhanlaxmi Cotex Limited

Financial Services — Capital Markets · BSE

₹110.40+₹0.05 (+0.05%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Dhanlaxmi Cotex Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dhanlaxmi Cotex Limited engages in buying and selling of quoted shares in India. It is also involved in textiles and investment business, as well as money market activities. The company was incorporated in 1987 and is based in Mumbai, India.

IndustryCapital Markets

SectorFinancial Services

Employees4

Annual revenue₹15 Cr

How does it make money?

Turns over ₹15 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 4 employees supports ₹3.67 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin2.4%

Net margin0.6%

Revenue / employee₹3.67 Cr

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC LIFE INS CO LTD, SBI LIFE INSURANCE CO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC LIFE INS CO LTDP/E 58.4x · ROE 11.3%

SBI LIFE INSURANCE CO LTDP/E 63.9x · ROE 13.7%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE0.1%

ROE0.1%

Peer median ROE13.7%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -41% while net margin moved -40% 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-41%

Margin effect-40%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 16.1% a year
✗ Profit has declined at 29.3% a year
✗ Profit fell 98.6% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

29/ 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.

Historical Valuation

Current P/E

77.7x

3Y Median

36.4x

40 monthly readings · mean 128.5x · range 6.2x–870.6x

Sector Median

58.4x

median of 3 sector peers

⚠️Current valuation is approximately 114% above its 3y median of 36.4x. 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 33% above the peer median of 58.4x.

vs. its own history

Expensive

36.4x median over 40 months · +114%

vs. sector peers

Expensive

58.4x median of 3 peers · +33%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

77.7x

P/B

0.77x

EV/EBITDA

151.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 0.8% to 2.4% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Receivables growing faster than sales
Receivables are up 191% against revenue growth of -41% — customers are taking longer to pay.
Valuation above its historical average
At 77.7x the stock trades 114% above its own median of 36.4x.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 65% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 0.8% to 2.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 114% 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.

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

1EBITDA margin holds above 0%✓ 2.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 0.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 36.4x✗ 77.7x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

4 / 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

4 good · 2 neutral · 5 weak

Market Cap

₹54 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

77.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.77x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.42

Profitable

Profitable on a per-share basis

ROE

0.1%

Weak

Weak capital efficiency

ROCE

0.1%

Weak

Low return on total capital employed

Debt/Equity

0.40x

Low

Conservative leverage

Revenue Growth (YoY)

340.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-98.6%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹110.4

Operating Margin

-8.6%

Weak

Thin margins leave little room for error

Net Margin

1.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

275.82

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.57

Defensive

Steadier than the market

52W Range Position

44%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

131.3 / 138.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

0.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹25 Cr	₹28 Cr	₹21 Cr	₹15 Cr	-16.1%
EBITDA	₹0 Cr	₹3 Cr	₹7 Cr	₹0 Cr	+20.2%
EBITDA Margin	0.8%	11.6%	34.5%	2.4%	—
PAT (Net Profit)	₹0 Cr	₹3 Cr	₹6 Cr	₹0 Cr	-29.3%
EPS	₹0.49	₹5.92	₹11.9	₹0.17	-29.7%
ROE	0.5%	4.0%	7.9%	0.1%	—
ROCE	0.7%	4.8%	9.7%	0.1%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+216.9%
Free Cash Flow	-₹4 Cr	₹14 Cr	₹1 Cr	-₹5 Cr	—

🔴 Revenue has shrunk at 16.1% a year over 3 years.

🟢 EBITDA has grown at 20.2% a year over 3 years.

🟢 EBITDA Margin has risen from 0.8% to 2.4% over 3 years (+1.6 pts).

🔴 PAT (Net Profit) has shrunk at 29.3% a year over 3 years.

🔴 EPS has shrunk at 29.7% a year over 3 years.

🟡 ROE has held roughly flat at 0.1% over 3 years.

🟡 ROCE has held roughly flat at 0.1% over 3 years.

🔴 Total Debt has grown at 216.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹70 Cr

Total Liabilities

₹0 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.6%

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC LIFE INS CO LTD	58.4x	11.3%
SBI LIFE INSURANCE CO LTD	63.9x	13.7%

Recent News

1 positive5 general

Dhanlaxmi Cotex Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

Dhanlaxmi Cotex sets Sep 26-28 e-voting window for 40th AGM

scanx.trade, 11 Aug

Compare with DHANAL.COTEX

Equitymaster, 27 Sept

Dhanlaxmi Cotex Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 02 Sept

Dhanlaxmi Cotex Q1FY27 loss narrows to ₹51.99 lakhs on revenue surge

scanx.trade, 11 AugResults

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

Dhanlaxmi Cotex Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 01 Sept

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
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 QualityWeak8.5/20

🟢Financial HealthStrong17/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding6.2/15

🔴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.

This thesis breaks if

✓EBITDA margin holds above 0%2.4%
✗Return on equity stays above 8%0.1%
✗Valuation vs its own median of 36.4x77.7x today