Nandani Creation Limited

Consumer Cyclical — Apparel Manufacturing · NSE

₹29.50−₹0.32 (−1.07%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently 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 Nandani Creation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nandani Creation Limited engages in the manufacturing and retailing of contemporary Indian women's wear in India and internationally.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Employees311

Annual revenue₹113 Cr

How does it make money?

Turns over ₹113 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 311 employees supports ₹36.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin7.8%

Net margin1.8%

Revenue / employee₹36.2 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 9.0% 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.

ROCE9.0%

ROE3.0%

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 +130% while net margin moved +684% 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+130%

Margin effect+684%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 3.0% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

80/ 100

Cheap

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.

Historical Valuation

Current P/E

28.4x

3Y Median

96.6x

40 monthly readings · mean 235.2x · range 10.8x–965.5x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 71% below its 3y median of 96.6x. 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 59% below the peer median of 69.2x.

vs. its own history

Cheap

96.6x median over 40 months · -71%

vs. sector peers

Cheap

69.2x median of 4 peers · -59%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

28.4x

P/B

0.86x

EV/EBITDA

10.7x

PEG

0.17

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Return on capital is rising
ROCE has improved from 6.9% to 9.0%.
Valuation below its historical average
At 28.4x the stock trades 71% below its own median of 96.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 152% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 436% against revenue growth of 130% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 184% against revenue growth of 130% — stock may not be moving.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 152% over 3 years, from ₹15 Cr to ₹38 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 436% against revenue up 130% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.9x to 1.8x.
🟡Inventory building faster than salesFinancial
Inventory up 184% against revenue up 130% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 44% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 71% 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 59% 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 4.3x 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 436% against revenue up 130%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
4 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 24% a year✓ 32.1% CAGR
Latest reported year was 24.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.3x
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✗ -₹18 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.

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

4 good · 4 neutral · 3 weak

Market Cap

₹56 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

28.4x

Fair

Fairly valued against the generic band

P/B Ratio

0.86x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.04

Profitable

Profitable on a per-share basis

ROE

3.0%

Weak

Weak capital efficiency

ROCE

9.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.58x

Low

Conservative leverage

Revenue Growth (YoY)

24.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-7.9%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹18 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹29.5

Operating Margin

5.9%

Average

Average margins

Net Margin

1.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.19

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.48

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

27.4 / 26.8

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

66.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹49 Cr	₹45 Cr	₹70 Cr	₹113 Cr	+32.1%
EBITDA	₹4 Cr	₹5 Cr	₹11 Cr	₹9 Cr	+27.6%
EBITDA Margin	8.7%	10.8%	15.7%	7.8%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹4 Cr	₹2 Cr	+162.4%
EPS	₹0.1	₹0.41	₹2.41	—	—
ROE	0.4%	1.9%	7.1%	3.0%	—
ROCE	6.9%	6.6%	13.1%	9.0%	—
Total Debt	₹15 Cr	₹26 Cr	₹27 Cr	₹38 Cr	+36.1%
Free Cash Flow	-₹3 Cr	-₹8 Cr	-₹18 Cr	-₹18 Cr	—

🟢 Revenue has grown at 32.1% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.8% over 3 years.

🟢 PAT (Net Profit) has grown at 162.4% a year over 3 years.

🟢 ROE has risen from 0.4% to 3.0% over 3 years (+2.6 pts).

🟢 ROCE has risen from 6.9% to 9.0% over 3 years (+2.1 pts).

🔴 Total Debt has grown at 36.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹128 Cr

Total Liabilities

₹62 Cr

Total Debt

₹38 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹17 Cr

Capex

-₹1 Cr

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 mixed4 general

Nandani Creation Share Price and Chart Analysis

Kalkine India, 09 Oct

Nandani Creation expands offline reach via Reliance Fashion Factory tie-up; stock price up 14%

Alice Blue, 23 AprPartnership

🟡Mixed / dependsA partnership, whose value depends entirely on terms that a headline will not carry. Worth reading the filing before assuming either way.

Nandani Creation Limited (JAIPURKURT.NS): Jaipur Kurti Stock Edges Up 1.39% to ₹25.48 as It Approaches Resistance - Range Breakout

www.siam.in, 28 Sept

Signoria Creation (NSEI:SIGNORIA) - Stock Analysis

Simply Wall Street, 15 Oct

Nandani Creation Stock Prediction 2026: Analyst Targets, Forecast and Key Levels

Univest, 23 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Nandani Creation Ltd. Peer Comparison – Compare with Others

Value Research, 27 Aug

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate9.2/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive10.9/15

🔴RiskHigh4/10

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

This thesis breaks if

✓Revenue growth stays above 24% a year32.1% CAGR
✓EBITDA margin holds above 6%7.8%
✗Debt / EBITDA falls below 3x4.3x
✗Free cash flow remains positive-₹18 Cr
✗Interest cover stays above 3x1.8x