Emmbi Industries Limited

Consumer Cyclical — Packaging & Containers · NSE

₹82.00−₹4.09 (−4.75%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

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

What does this company do?

Emmbi Industries Limited manufactures high-density polyethylene (HDPE) and polypropylene (PP) woven polymer-based products in India.

IndustryPackaging & Containers

SectorConsumer Cyclical

Employees1,501

Annual revenue₹456 Cr

How does it make money?

Turns over ₹456 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 1,501 employees supports ₹30.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin8.5%

Net margin1.7%

Revenue / employee₹30.3 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.

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 9.7% 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.

ROCE9.7%

ROE4.0%

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 +23% while net margin moved -22% 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+23%

Margin effect-22%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 7.1% — barely ahead of inflation
✗ Profit has declined at 1.6% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

78/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

18.2x

3Y Median

22.9x

40 monthly readings · mean 23.8x · range 15.6x–33.4x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 21% below its 3y median of 22.9x. 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 74% below the peer median of 69.2x.

vs. its own history

Cheap

22.9x median over 40 months · -21%

vs. sector peers

Cheap

69.2x median of 4 peers · -74%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

18.2x

P/B

0.79x

EV/EBITDA

8.5x

PEG

—

Dividend Yield

0.37%

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 18.2x the stock trades 21% below its own median of 22.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 48% against revenue growth of 23% — customers are taking longer to pay.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 48% against revenue up 23% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 21% 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 74% 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 4.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 48% against revenue up 23%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 7.1% 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
2 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 7%✓ 8.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.5x
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✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 5% a year✓ 7.1% CAGR
Latest reported year was 11.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

7 / 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 · 5 neutral · 2 weak

Market Cap

₹158 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.2x

Fair

Fairly valued against the generic band

P/B Ratio

0.79x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.51

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

9.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

11.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

53.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.37%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹82

P/E (Forward)

5.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

6.4%

Average

Average margins

Net Margin

1.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.50

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

86.7 / 86.5

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹371 Cr	₹377 Cr	₹404 Cr	₹456 Cr	+7.1%
EBITDA	₹34 Cr	₹37 Cr	₹34 Cr	₹39 Cr	+4.7%
EBITDA Margin	9.1%	9.9%	8.5%	8.5%	—
PAT (Net Profit)	₹8 Cr	₹10 Cr	₹6 Cr	₹8 Cr	-1.6%
EPS	₹4.67	₹5.62	₹3.24	₹4.1	-4.2%
ROE	5.1%	5.8%	3.3%	4.0%	—
ROCE	10.1%	11.6%	9.4%	9.7%	—
Total Debt	₹147 Cr	₹156 Cr	₹159 Cr	₹176 Cr	+6.3%
Free Cash Flow	₹14 Cr	—	₹6 Cr	-₹2 Cr	—

🟢 Revenue has grown at 7.1% a year over 3 years.

🟢 EBITDA has grown at 4.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.5% over 3 years.

🟡 PAT (Net Profit) has been broadly flat over 3 years (-1.6% a year).

🔴 EPS has shrunk at 4.2% a year over 3 years.

🔴 ROE has fallen from 5.1% to 4.0% over 3 years (-1.2 pts).

🟡 ROCE has held roughly flat at 9.7% over 3 years.

🔴 Total Debt has grown at 6.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹14 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹460 Cr

Total Liabilities

₹261 Cr

Total Debt

₹176 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹9 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.6%

Corporate Actions

Dividend Rate

₹0.3

Ex-Dividend Date

16 Sept 2026

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

2 positive4 general

Emmbi Industries (NSEI:EMMBI) - Stock Analysis

Simply Wall Street, 13 Oct

EMMBI INDUSTRIES Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 15 Oct

Emmbi Industries Ltd. Lower Circuit Streak: Day 2 Price and Data

Univest, 01 Oct

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

Value Research, 31 Aug

Emmbi Industries shareholders approve FY26 dividend and new directors

scanx.trade, 23 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Emmbi Industries Ltd Upgraded to Sell on Improved Valuation Metrics

MarketsMojo, 06 OctAnalyst view

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

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🔴Financial HealthStretched8.4/20

🔴GrowthWeak5.7/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive12/15

🔴RiskHigh4.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 7%8.5%
✗Debt / EBITDA falls below 3x4.5x
✗Free cash flow remains positive-₹2 Cr
✗Interest cover stays above 3x1.8x
✓Revenue growth stays above 5% a year7.1% CAGR