Jakharia Fabric Limited

Sector n/a · NSE

₹34.00₹0.00 (0.00%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by short-term liabilities exceed short-term assets, 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, 6:10 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

The 60-second version of Jakharia Fabric 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 ₹64 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

EBITDA margin10.2%

Net margin5.2%

What is its competitive advantage?Some evidence

ROCE of 19.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.5%

ROE13.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -25% while net margin moved -306% 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-25%

Margin effect-306%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.3% a year

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

88/ 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.

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

P/E (Trailing)

—

P/B

—

EV/EBITDA

7.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 1.1% to 10.2% over 3 years.
Debt is being paid down
Total debt is down 69% over 3 years.
Return on equity is rising
ROE has improved from -11.7% to 13.1%.
Return on capital is rising
ROCE has improved from -3.5% to 19.5%.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Short-term liquidity is tight
Current ratio of 0.86 — near-term obligations exceed near-term assets.

Red Flags

4 items require attention · 2 high · 2 watch

🔴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.
🔴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.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 200% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.86 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.5% 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 1.1% to 10.2%. 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 69% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

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 8%✓ 10.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 16%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

₹41 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

13.1%

Moderate

Moderate capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

2.3%

Modest

Modest growth

Profit Growth (YoY)

2.0%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹34

Gross Margin

27.0%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

5.2%

Average

Average bottom-line conversion

Current Ratio

0.86

Adequate

Adequate, but no real cushion

Technical Snapshot

SMA 20 / SMA 50

59.5 / 60.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

100.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹86 Cr	₹88 Cr	₹63 Cr	₹64 Cr	-9.3%
EBITDA	₹1 Cr	₹4 Cr	₹7 Cr	₹7 Cr	+92.7%
EBITDA Margin	1.1%	4.9%	10.7%	10.2%	—
PAT (Net Profit)	-₹2 Cr	₹0 Cr	₹3 Cr	₹3 Cr	—
EPS	₹-5.35	₹0.83	₹2.69	—	—
ROE	-11.7%	1.8%	14.8%	13.1%	—
ROCE	-3.5%	8.3%	17.7%	19.5%	—
Total Debt	₹18 Cr	₹12 Cr	₹8 Cr	₹5 Cr	-32.4%
Free Cash Flow	₹2 Cr	-₹2 Cr	-₹1 Cr	-₹4 Cr	—

🔴 Revenue has shrunk at 9.3% a year over 3 years.

🟢 EBITDA has grown at 92.7% a year over 3 years.

🟢 EBITDA Margin has risen from 1.1% to 10.2% over 3 years (+9.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹2 Cr to ₹3 Cr.

🟢 ROE has risen from -11.7% to 13.1% over 3 years (+24.8 pts).

🟢 ROCE has risen from -3.5% to 19.5% over 3 years (+22.9 pts).

🟢 Total Debt has shrunk at 32.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹46 Cr

Total Liabilities

₹20 Cr

Total Debt

₹5 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹2 Cr

Recent News

6 general

Compare with

Equitymaster, 08 Oct

Jakharia Fabric Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 30 Aug

Textile Processing Fabrics Penny Stocks India 2027: 5 Picks

Univest, 17 Sept

Compare with

Equitymaster, 10 Oct

Jakharia Fabric corrects auditor report format for FY26

scanx.trade, 02 Jul

Neelam Linens And Garments (India) Ltd Peer Comparison – Compare with Others

Value Research, 08 Oct

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 overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟡Financial HealthAdequate12.5/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate9.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

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

This thesis breaks if

✓EBITDA margin holds above 8%10.2%
✗Free cash flow remains positive-₹4 Cr
✓Debt / EBITDA stays below 2x0.8x
✓ROCE stays above 16%19.5%