Eastern Silk Industries Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹70.02+₹3.33 (+4.99%)

DalalBaazaar Score

28 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, the company is currently loss-making.

In simple words: The company is currently losing money, 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Eastern Silk Industries Limited engages in the manufacture and sale of textile products under the Eastern brand in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees248

Annual revenue₹23 Cr

How does it make money?

Turns over ₹23 Cr a year. Of every ₹100 of sales, about ₹-59 reaches shareholders as profit, with ₹-23 left at the operating level before interest, tax and depreciation. Each of its 248 employees supports ₹9.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹9.3 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of -6.3% 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 ROE25.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -39% while net margin moved +55% 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-39%

Margin effect+55%

DalalBaazaar Score

28/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

23/ 100

Weak

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

Valuation

36/ 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

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from -30.1% to -23.2% over 3 years.
Debt is being paid down
Total debt is down 48% over 3 years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

6 items require attention · 4 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.13x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only -920.6x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹14 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 35% against revenue up -39% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 32.7x to -920.6x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹25 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -30.1% to -23.2%. 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 48% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 2.13x. Interest is payable whether or not the business has a good year.
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
4 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 -25%✓ -23.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹25 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -920.6x
How much operating profit can fall before interest stops being comfortably covered.
4ROCE stays above 8%✗ -6.3%
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

₹35 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

0.98x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-28.43

Loss-making

Negative earnings per share — the business is losing money

ROE

-38.0%

Weak

Weak capital efficiency

ROCE

-6.3%

Weak

Low return on total capital employed

Debt/Equity

2.13x

High

High leverage

Revenue Growth (YoY)

10.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-443.1%

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

-₹25 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-22.5%

Weak

Thin margins leave little room for error

Net Margin

-58.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.47

Defensive

Steadier than the market

52W Range Position

45%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

68.8 / 64.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹38 Cr	₹19 Cr	₹21 Cr	₹23 Cr	-15.3%
EBITDA	-₹11 Cr	-₹9 Cr	₹3 Cr	-₹5 Cr	—
EBITDA Margin	-30.1%	-47.0%	12.3%	-23.2%	—
PAT (Net Profit)	-₹14 Cr	-₹12 Cr	₹4 Cr	-₹14 Cr	—
EPS	₹-1.83	₹-1.56	₹0.5	₹-27.2	—
ROE	—	-19.6%	6.4%	-38.0%	—
ROCE	—	-18.5%	0.6%	-6.3%	—
Total Debt	₹146 Cr	₹58 Cr	₹61 Cr	₹76 Cr	-19.4%
Free Cash Flow	₹3 Cr	₹7 Cr	-₹1 Cr	-₹25 Cr	—

🔴 Revenue has shrunk at 15.3% a year over 3 years.

🟢 EBITDA Margin has risen from -30.1% to -23.2% over 3 years (+6.9 pts).

🔴 ROE has fallen from -19.6% to -38.0% over 3 years (-18.3 pts).

🟢 ROCE has risen from -18.5% to -6.3% over 3 years (+12.3 pts).

🟢 Total Debt has shrunk at 19.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹25 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹134 Cr

Total Liabilities

₹98 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

90.0%

Corporate Actions

Ex-Dividend Date

08 Sept 2010

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 positive2 mixed3 general

Eastern Silk Industries EASTSILK Reg 74(5) Certificate Q2 FY27

Kalkine India, 16 OctResults

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

Eastern Silk Industries (EASTSILK.NS) Gains 4.42% to ₹63.99 — Key Levels to Track - Death Cross

https://www.siam.in/, 03 Sept

Eastern Silk Industries Ltd. Peer Comparison – Compare with Others

Value Research, 01 Sept

MarketsMOJO Upgrades Eastern Silk Industries Ltd from Strong Sell to Sell on Technical Improvements

MarketsMojo, 06 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Eastern Silk Industries Completes OFS Sale of 1.39 Lakh Shares by Promoter

scanx.trade, 17 Mar

Eastern Silk Industries reports standalone net loss of Rs 0.80 crore in the June 2026 quarter

Business Standard, 07 AugResults

🟡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

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

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

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.

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