Kanani Industries Limited

Consumer Cyclical — Luxury Goods · NSE

₹1.50+₹0.18 (+13.64%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kanani Industries Limited manufactures and exports diamond studded jewellery in India. The company also offers labs grown polished diamonds and lab grown rough diamonds.

IndustryLuxury Goods

SectorConsumer Cyclical

Annual revenue₹174 Cr

How does it make money?

Turns over ₹174 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED, ASIAN PAINTS 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 3.8% 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 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 -36% while net margin moved +85% 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-36%

Margin effect+85%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 13.7% a year
✗ Profit CAGR of only 5.8%
✗ Latest-year revenue growth of -23.2% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

76/ 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

12.5x

3Y Median

38.7x

40 monthly readings · mean 43.0x · range 10.5x–96.7x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 68% below its 3y median of 38.7x. 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 82% below the peer median of 69.2x.

vs. its own history

Cheap

38.7x median over 40 months · -68%

vs. sector peers

Cheap

69.2x median of 4 peers · -82%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.7x

PEG

2.14

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 98% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 98% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 68% 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 82% 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?

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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 0%✓ 1.5%
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.
3Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 3.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 38.7x✓ 12.5x 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 · 3 neutral · 3 weak

Market Cap

₹30 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.5x

Cheap

Cheap against the generic band

P/B Ratio

0.39x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.12

Profitable

Profitable on a per-share basis

ROE

3.7%

Weak

Weak capital efficiency

ROCE

3.8%

Weak

Low return on total capital employed

Debt/Equity

0.69x

Moderate

Moderate leverage

Revenue Growth (YoY)

-23.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

230.8%

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 generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-0.0%

Weak

Thin margins leave little room for error

Net Margin

1.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.03

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.34

Defensive

Steadier than the market

52W Range Position

49%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1.4 / 1.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

58.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹270 Cr	₹223 Cr	₹168 Cr	₹174 Cr	-13.7%
EBITDA	₹3 Cr	₹1 Cr	₹1 Cr	₹3 Cr	-5.6%
EBITDA Margin	1.2%	0.6%	0.5%	1.5%	—
PAT (Net Profit)	₹2 Cr	₹1 Cr	₹1 Cr	₹3 Cr	+5.8%
EPS	₹0.22	₹0.03	₹0.04	₹0.13	-16.1%
ROE	3.5%	1.0%	1.2%	3.7%	—
ROCE	4.3%	2.0%	1.2%	3.8%	—
Total Debt	₹31 Cr	₹6 Cr	₹0 Cr	₹0 Cr	-75.2%
Free Cash Flow	-₹2 Cr	₹19 Cr	₹6 Cr	₹0 Cr	—

🔴 Revenue has shrunk at 13.7% a year over 3 years.

🔴 EBITDA has shrunk at 5.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 1.5% over 3 years.

🟢 PAT (Net Profit) has grown at 5.8% a year over 3 years.

🔴 EPS has shrunk at 16.1% a year over 3 years.

🟡 ROE has held roughly flat at 3.7% over 3 years.

🟡 ROCE has held roughly flat at 3.8% over 3 years.

🟢 Total Debt has shrunk at 75.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹104 Cr

Total Liabilities

₹35 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

34.9%

Corporate Actions

Ex-Dividend Date

26 Jul 2010

Peer Comparison

Company	P/E	ROE
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 mixed4 general

Kanani Industries (KANANIIND.NS) Slips to ₹1.34, Hovering Near ₹1.27 Support Zone - Stock News

https://www.siam.in/, 02 Oct

Kanani Industries vs Nifty 50: Share Price Performance Compared

Univest, 01 Oct

Compare with KANANI INDUSTRIES

Equitymaster, 28 Sept

Kanani Industries closes trading window from Oct 1 for Q2FY27 results

scanx.trade, 25 SeptResults

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

Why Is Kanani Industries Share Price Falling Key Reasons 2026

Univest, 12 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Deep Health AI India (BSE:539559) - Stock Analysis

Simply Wall Street, 02 Mar

Watch Items

Revenue growth is negative (-23.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · 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. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑