Digjam Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹54.12+₹2.57 (+4.99%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 Digjam Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Digjam Limited engages in the manufactures and sells polyester viscose and pure wool fabrics for suiting and casual wear in India and internationally. The company offers its fabrics under the DIGJAM brand.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees17

Annual revenue₹33 Cr

How does it make money?

Turns over ₹33 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 17 employees supports ₹1.95 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.3%

Net margin-3.0%

Revenue / employee₹1.95 Cr

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 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.

ROCE10.7%

ROE-22.6%

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 -0% while net margin moved -92% 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-0%

Margin effect-92%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.0% a year
✗ Profit fell 14.6% in the latest year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

55/ 100

Fair

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

29.4x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 57% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -57%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

29.4x

P/B

24.77x

EV/EBITDA

41.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -11.2% to 10.3% over 3 years.
Debt is being paid down
Total debt is down 29% over 3 years.
Return on equity is rising
ROE has improved from -43.5% to -22.6%.
Return on capital is rising
ROCE has improved from -10.0% to 10.7%.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Short-term liquidity is tight
Current ratio of 0.50 — near-term obligations exceed near-term assets.

Red Flags

4 items require attention · 3 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 13.61x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 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 -₹1 Cr in the latest reported year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.50 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -11.2% to 10.3%. 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 29% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 57% 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 9.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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
3 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 8%✓ 10.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 9.7x
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✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
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

3 / 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 · 4 neutral · 5 weak

Market Cap

₹108 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.4x

Fair

Fairly valued against the generic band

P/B Ratio

24.77x

Rich

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

EPS (TTM)

₹1.84

Profitable

Profitable on a per-share basis

ROE

-22.6%

Weak

Weak capital efficiency

ROCE

10.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

13.61x

High

High leverage

Revenue Growth (YoY)

88.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-14.6%

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

₹54.12

Operating Margin

9.9%

Average

Average margins

Net Margin

-3.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.50

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.14

Defensive

Steadier than the market

52W Range Position

49%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

51.9 / 52.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹33 Cr	₹3 Cr	₹18 Cr	₹33 Cr	-0.0%
EBITDA	-₹4 Cr	₹0 Cr	₹4 Cr	₹3 Cr	—
EBITDA Margin	-11.2%	19.0%	21.4%	10.3%	—
PAT (Net Profit)	-₹12 Cr	-₹12 Cr	-₹11 Cr	-₹1 Cr	—
EPS	₹-6.1	₹-6.03	₹-5.3	₹-0.5	—
ROE	-43.5%	-76.1%	-196.5%	-22.6%	—
ROCE	-10.0%	-0.4%	6.3%	10.7%	—
Total Debt	₹46 Cr	₹24 Cr	₹32 Cr	₹33 Cr	-10.6%
Free Cash Flow	₹14 Cr	-₹5 Cr	-₹19 Cr	-₹5 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.0% a year).

🟢 EBITDA has turned positive, from -₹4 Cr to ₹3 Cr.

🟢 EBITDA Margin has risen from -11.2% to 10.3% over 3 years (+21.5 pts).

🟢 ROE has risen from -43.5% to -22.6% over 3 years (+20.9 pts).

🟢 ROCE has risen from -10.0% to 10.7% over 3 years (+20.7 pts).

🟢 Total Debt has shrunk at 10.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹14 Cr to -₹5 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹75 Cr

Total Liabilities

₹71 Cr

Total Debt

₹33 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

1.2%

Insider Holding

75.0%

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 mixed5 general

Digjam Upper Circuit Today: Price, Data and Peers

Univest, 17 Oct

Digjam Upper Circuit Streak: Day 2 Price and Data

Univest, 14 Oct

Momentum Stocks: Golden Tobacco, Moquality, Digjam share under pressure, down 4% each

Moneycontrol.com, 28 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Digjam Ltd leads gainers in 'B' group

Business Standard, 23 Apr

NCLT directs meetings for Digjam and Reid & Taylor scheme

scanx.trade, 27 Jun

Digjam Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 01 Oct

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🔴Financial HealthStretched8.2/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak5/15

🔴ValuationDemanding5/15

🔴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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 8%10.3%
✗Debt / EBITDA falls below 3x9.7x
✗Free cash flow remains positive-₹5 Cr
✓Interest cover stays above 3x3.2x
✓ROCE stays above 8%10.7%