GHCL Textiles Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹131.50+₹2.08 (+1.61%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, 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. 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 GHCL Textiles Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

GHCL Textiles Limited engages in the production and sale of yarn in India and internationally. It offers open end, ring spun cotton, TFO, vortex, synthetic and synthetic blend ring spun yarn products. The company was founded in 1927 and is headquartered in Noida, India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees2,833

Annual revenue₹1,308 Cr

How does it make money?

Turns over ₹1,308 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 2,833 employees supports ₹46.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin11.2%

Net margin5.4%

Revenue / employee₹46.2 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 5.9% 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.

ROCE5.9%

ROE4.7%

Peer median ROE25.9%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 5.9% is below 10% — capital is not working hard
✗ EBITDA margin of 11.2% is thin — little cushion if costs rise
✗ Net margin of 6.6% is slim

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

83/ 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

13.1x

2Y Median

18.3x

28 monthly readings · mean 23.8x · range 11.2x–41.2x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 29% below its 2y median of 18.3x. 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 81% below the peer median of 69.2x.

vs. its own history

Cheap

18.3x median over 28 months · -29%

vs. sector peers

Cheap

69.2x median of 4 peers · -81%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.1x

P/B

0.84x

EV/EBITDA

9.5x

PEG

—

Dividend Yield

0.46%

What's Good / What's Bad

🟢 What's Going Well1

Valuation below its historical average
At 13.1x the stock trades 29% below its own median of 18.3x.

🔴 What Needs Attention1

Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 8.93x — earnings must service borrowings before shareholders see anything.
🔴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 -₹63 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 29% 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 81% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.93x. 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
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 9%✓ 11.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹63 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 5.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 18.3x✓ 13.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹1,257 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.1x

Cheap

Cheap against the generic band

P/B Ratio

0.84x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.07

Profitable

Profitable on a per-share basis

ROE

4.7%

Weak

Weak capital efficiency

ROCE

5.9%

Weak

Low return on total capital employed

Debt/Equity

8.93x

High

High leverage

Revenue Growth (YoY)

52.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

192.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.46%

Modest

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

Free Cash Flow

-₹63 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹131.5

Operating Margin

13.2%

Average

Average margins

Net Margin

6.6%

Average

Average bottom-line conversion

Current Ratio

2.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.70

Defensive

Steadier than the market

52W Range Position

83%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

130.7 / 128.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

39.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	—	₹1,045 Cr	₹1,151 Cr	₹1,308 Cr	—
EBITDA	-₹0 Cr	₹85 Cr	₹113 Cr	₹147 Cr	—
EBITDA Margin	—	8.1%	9.8%	11.2%	—
PAT (Net Profit)	-₹0 Cr	₹25 Cr	₹56 Cr	₹70 Cr	—
EPS	₹-0	₹2.62	₹5.86	₹7.36	—
ROE	—	1.8%	3.9%	4.7%	—
ROCE	—	2.6%	4.1%	5.9%	—
Total Debt	—	₹72 Cr	₹63 Cr	₹134 Cr	—
Free Cash Flow	-₹0 Cr	-₹15 Cr	₹4 Cr	-₹63 Cr	—

🟢 EBITDA has turned positive, from -₹0 Cr to ₹147 Cr.

🟢 EBITDA Margin has risen from 8.1% to 11.2% over 3 years (+3.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹70 Cr.

🟢 EPS has turned positive, from ₹-0 to ₹7.36.

🟢 ROE has risen from 1.8% to 4.7% over 3 years (+2.9 pts).

🟢 ROCE has risen from 2.6% to 5.9% over 3 years (+3.3 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,870 Cr

Total Liabilities

₹368 Cr

Total Debt

₹134 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹68 Cr

Shareholding (proxy)

Institutional Holding

7.5%

Insider Holding

34.6%

Corporate Actions

Dividend Rate

₹0.6

Ex-Dividend Date

19 Jun 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 positive1 mixed3 general

GHCL Textiles Share Price Forecast: 3 Year Outlook to 2030

Univest, 16 Jul

GHCL Textiles Ltd Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Investors Shouldn't Be Too Comfortable With GHCL Textiles' (NSE:GHCLTEXTIL) Earnings

Simply Wall Street, 11 JunResults

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

GHCL Textiles Q1FY27 net profit jumps 191% on fabric sales surge

scanx.trade, 30 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Top 3 stock picks by Vaishali Parekh: Samvardhana Motherson, Zuari Industries, GHCL Textile | Target, stoploss

Livemint, 25 Sept

GHCL Textiles standalone net profit rises 191.05% in the June 2026 quarter

Business Standard, 30 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟡Financial HealthAdequate10.6/20

🟡GrowthModest10/20

🔴ProfitabilityWeak6.2/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.7/10

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 9%11.2%
✗Free cash flow remains positive-₹63 Cr
✓Debt / EBITDA stays below 2x0.9x
✗ROCE stays above 8%5.9%
✓Valuation vs its own median of 18.3x13.1x today