Fractal Industries Limited

Consumer Cyclical — Apparel Manufacturing · BSE

₹200.00−₹14.90 (−6.93%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:05 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 Fractal Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Fractal Industries Limited engages in designing, sourcing, manufacturing, and selling garments. It offers garments or provides to third party vendor on job work basis, as well as sells finished garments directly to e-commerce platforms.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Employees81

Annual revenue₹90 Cr

How does it make money?

Turns over ₹90 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 81 employees supports ₹1.11 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin19.6%

Net margin14.6%

Revenue / employee₹1.11 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 28.9% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE22.5%

ROE28.9%

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 +1% while net margin moved +388% 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+1%

Margin effect+388%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

85/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

12.0x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 83% 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 · -83%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

12.0x

P/B

2.13x

EV/EBITDA

7.8x

PEG

0.17

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 4.7% to 19.6% over 3 years.
Debt is being paid down
Total debt is down 18% over 3 years.
High return on capital employed
ROCE of 22.5% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 45.1% to 17.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 38.5% to 22.5% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 268% against revenue growth of 1% — stock may not be moving.

Red Flags

1 item require attention · 1 high

🔴Inventory building faster than salesFinancial
Inventory up 268% against revenue up 1% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 4.7% to 19.6%. 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 18% 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 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹4 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 0.3% 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.
Returns on shareholder capital are falling
ROE has dropped from 45.1% to 17.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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 18%✓ 19.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 0.3% CAGR
Latest reported year was 5.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 22.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹157 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.0x

Cheap

Cheap against the generic band

P/B Ratio

2.13x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹16.69

Profitable

Profitable on a per-share basis

ROE

28.9%

Strong

Strong capital efficiency

ROCE

22.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

5.1%

Modest

Modest growth

Profit Growth (YoY)

74.2%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹200

ROA

14.2%

Good

Assets are working hard

Operating Margin

18.6%

Good

Healthy core-business profitability

Net Margin

14.6%

Good

Strong bottom-line conversion

Current Ratio

4.01

Comfortable

Healthy short-term liquidity

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

213.7 / 207.3

Bullish alignment (short > long)

RSI (14)

34.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹89 Cr	₹50 Cr	₹85 Cr	₹90 Cr	+0.3%
EBITDA	₹4 Cr	₹4 Cr	₹11 Cr	₹18 Cr	+61.8%
EBITDA Margin	4.7%	8.3%	13.1%	19.6%	—
PAT (Net Profit)	₹3 Cr	₹2 Cr	₹8 Cr	₹13 Cr	+70.2%
EPS	₹3.39	₹2.89	₹9.58	—	—
ROE	45.1%	27.8%	47.9%	17.8%	—
ROCE	38.5%	20.7%	43.6%	22.5%	—
Total Debt	₹14 Cr	₹22 Cr	₹28 Cr	₹12 Cr	-6.4%
Free Cash Flow	₹7 Cr	-₹10 Cr	-₹4 Cr	₹4 Cr	-20.0%

🟡 Revenue has been broadly flat over 3 years (0.3% a year).

🟢 EBITDA has grown at 61.8% a year over 3 years.

🟢 EBITDA Margin has risen from 4.7% to 19.6% over 3 years (+14.9 pts).

🟢 PAT (Net Profit) has grown at 70.2% a year over 3 years.

🔴 ROE has fallen from 45.1% to 17.8% over 3 years (-27.4 pts).

🔴 ROCE has fallen from 38.5% to 22.5% over 3 years (-16.0 pts).

🟢 Total Debt has shrunk at 6.4% a year over 3 years.

🔴 Free Cash Flow has shrunk at 20.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹99 Cr

Total Liabilities

₹25 Cr

Total Debt

₹12 Cr

Cash & Equivalents

₹31 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.8%

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

FRACTAL ANALYTICS LIMITED Share Price

Upstox, 16 Oct

Compare with

Equitymaster, 16 Oct

Fractal Industries Limited Share Price Fall: Key Metrics

Univest, 21 AugPrice 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.

Fractal Industries Share Price Lists At 6% Premium | Stock Market Today Update

Samco, 24 Feb

Fractal Industries shares list at 6% premium over IPO price

The Economic Times, 24 Feb

FIL Stock Price and Chart — BSE:FIL

TradingView, 24 Feb

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12.6/20

🟢Financial HealthStrong15/20

🟢GrowthStrong13.1/20

🟢ProfitabilityStrong10.4/15

🟢ValuationAttractive11/15

🔴RiskHigh2.5/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 18%19.6%
✗Revenue growth stays above 4% a year0.3% CAGR
✓Free cash flow remains positive₹4 Cr
✓Debt / EBITDA stays below 2x0.7x
✓ROCE stays above 19%22.5%