Emerald Leisures Limited

Consumer Cyclical — Leisure · BSE

₹277.10−₹12.80 (−4.42%)

DalalBaazaar Score

21 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Emerald Leisures Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Emerald Leisures Limited provides rooms, food and beverage, and banquet services in India. The company operates club and sports complex. It offers various facilities, such as gym, swimming pool, squash, badminton, table tennis, carrom, and chess lounges.

IndustryLeisure

SectorConsumer Cyclical

Employees45

Annual revenue₹16 Cr

How does it make money?

Turns over ₹16 Cr a year. Of every ₹100 of sales, about ₹-55 reaches shareholders as profit, with ₹47 left at the operating level before interest, tax and depreciation. Each of its 45 employees supports ₹34.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin46.9%

Net margin-54.7%

Revenue / employee₹34.8 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +12% while net margin moved -25% 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+12%

Margin effect-25%

DalalBaazaar Score

21/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

21/ 100

Weak

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

Valuation

30/ 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

Multiples unreliable — equity base is negative

P/E (Trailing)

Not meaningful

P/B

—

EV/EBITDA

71.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from 42.5% to 46.9% over 3 years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 28% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 5032% against revenue growth of 12% — stock may not be moving.
Negative shareholders' equity
Liabilities exceed assets — this is a solvency question that sits above every other consideration here.
Short-term liquidity is tight
Current ratio of 0.33 — near-term obligations exceed near-term assets.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.4x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹9 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 5032% against revenue up 12% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 28% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹7 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.33 — 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 42.5% to 46.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
The debt load needs earnings to hold up
Debt is 14.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 4.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 45%✓ 46.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 14.4x
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✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.4x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 4.0% CAGR
Latest reported year was -4.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 9 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ 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

1 good · 4 neutral · 6 weak

Market Cap

₹416 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

Not available

No data

Source didn't return this field

EPS (TTM)

₹-5.98

Loss-making

Negative earnings per share — the business is losing money

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

Not available

No data

Source didn't return this field

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-4.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

20.7%

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

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹277.1

Operating Margin

13.9%

Average

Average margins

Net Margin

-52.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.33

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.48

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

292.4 / 280.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

39.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹14 Cr	₹16 Cr	₹14 Cr	₹16 Cr	+4.0%
EBITDA	₹6 Cr	₹6 Cr	₹5 Cr	₹7 Cr	+7.4%
EBITDA Margin	42.5%	39.8%	32.1%	46.9%	—
PAT (Net Profit)	-₹10 Cr	-₹10 Cr	-₹11 Cr	-₹9 Cr	—
EPS	₹-7.3	₹-6.98	₹-7.47	₹-5.69	—
Total Debt	₹83 Cr	₹86 Cr	₹96 Cr	₹105 Cr	+8.5%
Free Cash Flow	-₹4 Cr	₹6 Cr	-₹18 Cr	-₹7 Cr	—

🟢 Revenue has grown at 4.0% a year over 3 years.

🟢 EBITDA has grown at 7.4% a year over 3 years.

🟢 EBITDA Margin has risen from 42.5% to 46.9% over 3 years (+4.4 pts).

🔴 Total Debt has grown at 8.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹100 Cr

Total Liabilities

₹179 Cr

Total Debt

₹105 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.6%

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

Emerald Leisures Lower Circuit Today: Price, Data and Peers

Univest, 08 Oct

Emerald Leisures sets 92nd AGM for July 23, 2026

scanx.trade, 04 Oct

Emerald Leisures Ltd. Peer Comparison – Compare with Others

Value Research, 29 Aug

Emerald Leisures Upper Circuit Today: Price, Data and Peers

Univest, 06 Oct

Stock Alert: Panacea Biotec, Advance Agrolife, Zaggle Prepaid Ocean Services, Emerald Leisures, L&T

Business Standard, 15 Apr

Emerald Leisures board approves rights issue up to ₹130 crore

scanx.trade, 01 Oct

Watch Items

Revenue growth is negative (-4.9%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak6/20

🔴Financial HealthStretched1/20

🔴GrowthWeak7.6/20

🔴ProfitabilityWeak1.5/15

🔴ValuationDemanding4.5/15

🔴RiskHigh0.5/10

Avoid until solvency is resolved

Emerald Leisures Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 45%46.9%
✗Debt / EBITDA falls below 3x14.4x
✗Free cash flow remains positive-₹7 Cr
✗Interest cover stays above 3x0.4x
✗Revenue growth stays above 4% a year4.0% CAGR