Gratex Industries Limited

Consumer Cyclical — Furnishings, Fixtures & Appliances · BSE

₹18.55−₹0.95 (−4.87%)

DalalBaazaar Score

39 / 100

🔴 Weak

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, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Gratex Industries Limited manufactures and trades wall papers, wall posters, profiles, catalogues, furniture, and related products in India.

IndustryFurnishings, Fixtures & Appliances

SectorConsumer Cyclical

Employees17

Annual revenue₹3 Cr

How does it make money?

Turns over ₹3 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 17 employees supports ₹19.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹19.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are HAVELLS INDIA LIMITED, VOLTAS LTD, TITAN COMPANY 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 4.4% 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 ROE17.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +5% while net margin moved -44% 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+5%

Margin effect-44%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 1.7% — barely ahead of inflation
✗ Profit has declined at 16.3% a year

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

65/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

42.2x

3Y Median

62.3x

40 monthly readings · mean 61.0x · range 22.6x–111.0x

Sector Median

68.5x

median of 3 sector peers

🟢Current valuation is approximately 32% below its 3y median of 62.3x. 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 38% below the peer median of 68.5x.

vs. its own history

Cheap

62.3x median over 40 months · -32%

vs. sector peers

Cheap

68.5x median of 3 peers · -38%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

18.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 6.7% to 4.4% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 193% over 3 years, from ₹0 Cr to ₹0 Cr.
🔴High leverageFinancial
Debt/Equity of 4.50x — 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 -₹0 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 41% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.2 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 32% 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 38% 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?

Margins are being competed away
EBITDA margin has fallen from 11.8% to 9.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 4.50x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 1.7% 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
3 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 8%✓ 9.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.7% CAGR
Latest reported year was 37.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹6 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

42.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.44

Profitable

Profitable on a per-share basis

ROE

2.9%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

4.50x

High

High leverage

Revenue Growth (YoY)

37.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

133.3%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

20.4 / 22.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3 Cr	₹3 Cr	₹3 Cr	₹3 Cr	+1.7%
EBITDA	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-5.1%
EBITDA Margin	11.8%	10.1%	11.4%	9.6%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-16.3%
EPS	₹0.62	₹0.31	₹0.24	₹0.36	-16.6%
ROE	5.5%	2.7%	2.0%	2.9%	—
ROCE	6.7%	3.6%	3.1%	4.4%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+43.1%
Free Cash Flow	₹0 Cr	-₹0 Cr	₹0 Cr	-₹0 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.7% a year).

🔴 EBITDA has shrunk at 5.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.8% to 9.6% over 3 years (-2.2 pts).

🔴 PAT (Net Profit) has shrunk at 16.3% a year over 3 years.

🔴 EPS has shrunk at 16.6% a year over 3 years.

🔴 ROE has fallen from 5.5% to 2.9% over 3 years (-2.6 pts).

🔴 ROCE has fallen from 6.7% to 4.4% over 3 years (-2.3 pts).

🔴 Total Debt has grown at 43.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.2%

Corporate Actions

Ex-Dividend Date

22 Sept 1995

Peer Comparison

Company	P/E	ROE
HAVELLS INDIA LIMITED	43.5x	17.1%
VOLTAS LTD	75.8x	7.0%
TITAN COMPANY LIMITED	68.5x	36.7%

Recent News

2 positive1 mixed1 negative2 general

Gratex Industries Limited Receives BSE Waiver for Q4FY25 Fine Under Regulation 30

scanx.trade, 29 AprRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Titan Company consolidated net profit rises 62.88% in the June 2026 quarter

Business Standard, 07 AugResults

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

Q1 results 2026: Bharti Airtel to LIC among companies to declare Q1 results next week; check full list here

Livemint, 02 AugResults

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

GRATEX INDUSTRIES LTD. Share Price

Upstox, 09 Apr

DSP BSE MIDSMALL PRIVATE BANKS ETF Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 07 Aug

Vikram Thermo (India) standalone net profit rises 109.34% in the March 2026 quarter

Business Standard, 27 MayResults

🟢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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

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. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year; ROCE stays above 8% · see Key things to watch ↑