Italian Edibles Limited

Sector n/a · NSE

₹33.55−₹0.25 (−0.74%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Reasonable but unspectacular business quality, 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, 7:03 pm

Understanding the Business

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

How does it make money?

Turns over ₹99 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 12.4% 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.

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +58% while net margin moved -2% 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+58%

Margin effect-2%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.4% is weak
✗ ROE has fallen by 15.0 points over the period

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

60/ 100

Fair

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

10.6x

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 Attention2

Return on equity is falling
ROE has dropped from 23.4% to 8.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 37.3% to 12.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 117% over 3 years, from ₹17 Cr to ₹38 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 147% against revenue up 58% — stock may not be moving.
🟡Margins are compressingFinancial
EBITDA margin is down 3.0 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 11.2% to 8.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 23.4% to 8.4%. 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.
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

1Revenue growth stays above 12% a year✓ 16.4% CAGR
Latest reported year was 17.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹14 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.7x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 8 neutral · 1 weak

Market Cap

₹50 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

8.4%

Moderate

Moderate capital efficiency

ROCE

12.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.79x

Moderate

Moderate leverage

Revenue Growth (YoY)

17.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

32.2%

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

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

23.0%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

4.1%

Average

Average bottom-line conversion

Current Ratio

1.71

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

29.1 / 30.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹63 Cr	₹73 Cr	₹85 Cr	₹99 Cr	+16.4%
EBITDA	₹7 Cr	₹9 Cr	₹7 Cr	₹8 Cr	+4.9%
EBITDA Margin	11.2%	11.7%	8.3%	8.2%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	₹3 Cr	₹4 Cr	+15.4%
EPS	₹1.77	₹2.09	₹2.06	—	—
ROE	23.4%	7.6%	6.9%	8.4%	—
ROCE	37.3%	14.1%	15.0%	12.4%	—
Total Debt	₹17 Cr	₹17 Cr	₹21 Cr	₹38 Cr	+29.5%
Free Cash Flow	₹2 Cr	-₹24 Cr	-₹5 Cr	-₹14 Cr	—

🟢 Revenue has grown at 16.4% a year over 3 years.

🟢 EBITDA has grown at 4.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.2% to 8.2% over 3 years (-3.0 pts).

🟢 PAT (Net Profit) has grown at 15.4% a year over 3 years.

🔴 ROE has fallen from 23.4% to 8.4% over 3 years (-15.0 pts).

🔴 ROCE has fallen from 37.3% to 12.4% over 3 years (-24.9 pts).

🔴 Total Debt has grown at 29.5% a year over 3 years.

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

Balance Sheet & Cash Flow — FY2026

Total Assets

₹108 Cr

Total Liabilities

₹60 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹12 Cr

Recent News

6 general

Compare with

Equitymaster, 16 Oct

Italian Edibles Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 09 Oct

Here's Why Italian Edibles (NSE:ITALIANE) Has Caught The Eye Of Investors

Simply Wall Street, 24 Aug

Italian Edibles share price makes a weak debut, stock opens with 19% discount at ₹55 on NSE SME

Livemint, 12 Feb

Italian Edibles lists at 19% discount over IPO price on NSE SME

Moneycontrol.com, 12 Feb

Italian Edibles IPO allotment finalised today; GMP steady, steps to check Italian IPO allotment status

Livemint, 08 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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

StrongGrowth

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑