Karnawati Innovation Limited

Consumer Cyclical — Packaging & Containers · BSE

₹1.29−₹0.02 (−1.53%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, but sales are shrinking. The direction of profits is 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

Company site ↗

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

What does this company do?

Karnawati Innovation Limited engages in the production and sale of mineral water and PET bottles in India. The company is also involved in cultivation, farming, and production of crops; goldsmiths and silver smiths; and plastic recycling.

IndustryPackaging & Containers

SectorConsumer Cyclical

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹28 left at the operating level before interest, tax and depreciation.

EBITDA margin27.9%

Net margin15.8%

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?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%

ROE12.4%

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 -39% while net margin moved +1422% 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-39%

Margin effect+1422%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.65 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

75/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

0.2x

4Y Median

66.7x

52 monthly readings · mean 136.4x · range 21.3x–1022.0x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 100% below its 4y median of 66.7x. 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 100% below the peer median of 69.2x.

vs. its own history

Cheap

66.7x median over 52 months · -100%

vs. sector peers

Cheap

69.2x median of 4 peers · -100%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

0.2x

P/B

2.34x

EV/EBITDA

26.4x

PEG

0.00

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 1.1% to 27.9% over 3 years.
Return on equity is rising
ROE has improved from 2.4% to 12.4%.
Return on capital is rising
ROCE has improved from 2.5% to 19.5%.
Valuation below its historical average
At 0.2x the stock trades 100% below its own median of 66.7x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 53% against revenue growth of -39% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Receivables growing faster than salesFinancial
Receivables up 53% against revenue up -39% — sales are being booked faster than they are collected.
🟡Low reported insider holdingOwnership
Reported insider holding is 4.0%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

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 27.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 100% 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 100% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹0 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 53% against revenue up -39%. 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.

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

1EBITDA margin holds above 26%✓ 27.9%
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.
3ROCE stays above 17%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 66.7x✓ 0.2x 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 · 4 neutral · 2 weak

Market Cap

₹7 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

0.2x

Cheap

Cheap against the generic band

P/B Ratio

2.34x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.86

Profitable

Profitable on a per-share basis

ROE

12.4%

Moderate

Moderate capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.47x

Low

Conservative leverage

Revenue Growth (YoY)

-77.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-28.1%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1.29

Operating Margin

2.6%

Weak

Thin margins leave little room for error

Net Margin

4.2%

Average

Average bottom-line conversion

Current Ratio

2.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.65

Defensive

Steadier than the market

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1.2 / 1.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

60.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹2 Cr	₹4 Cr	₹4 Cr	₹1 Cr	-15.0%
EBITDA	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+152.0%
EBITDA Margin	1.1%	4.6%	5.7%	27.9%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+110.5%
EPS	₹0	₹0.03	₹0.04	₹0.03	+117.7%
ROE	2.4%	21.1%	19.6%	12.4%	—
ROCE	2.5%	21.1%	19.6%	19.5%	—
Free Cash Flow	₹0 Cr	-₹1 Cr	₹0 Cr	₹0 Cr	-6.3%

🔴 Revenue has shrunk at 15.0% a year over 3 years.

🟢 EBITDA has grown at 152.0% a year over 3 years.

🟢 EBITDA Margin has risen from 1.1% to 27.9% over 3 years (+26.8 pts).

🟢 PAT (Net Profit) has grown at 110.5% a year over 3 years.

🟢 EPS has grown at 117.7% a year over 3 years.

🟢 ROE has risen from 2.4% to 12.4% over 3 years (+10.0 pts).

🟢 ROCE has risen from 2.5% to 19.5% over 3 years (+17.1 pts).

🔴 Free Cash Flow has shrunk at 6.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹2 Cr

Total Liabilities

₹1 Cr

Total Debt

—

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

4.0%

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 general

SHETR Stock Price and Chart — BSE:SHETR

TradingView, 23 Jul

JUMBO Stock Price and Chart — BSE:JUMBO

TradingView, 04 Aug

Watch Items

Revenue growth is negative (-77.0%) 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.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

🟢Business QualityStrong14.3/20

🟢Financial HealthStrong17.7/20

🟡GrowthModest9.5/20

🟡ProfitabilityModerate8.5/15

🟢ValuationAttractive11.8/15

🔴RiskHigh4.4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 26%27.9%
✓Free cash flow remains positive₹0 Cr
✓ROCE stays above 17%19.5%
✓Valuation vs its own median of 66.7x0.2x today