Lorenzini Apparels Limited

Consumer Cyclical — Apparel Manufacturing · NSE

₹8.78+₹0.23 (+2.69%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Lorenzini Apparels Limited designs, manufactures, markets, and distributes ready-made garments in India. The company offers formal, semi-formal, and casual wears for men and women under the Monteil brand name.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Employees87

Annual revenue₹73 Cr

How does it make money?

Turns over ₹73 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 87 employees supports ₹83.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹83.6 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 14.4% 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.

Peer median ROE25.9%

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 +66% while net margin moved +4% 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+66%

Margin effect+4%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROCE of 14.4% is adequate but not distinctive
✗ ROCE has fallen by 6.9 points — returns are eroding
✗ EBITDA margin of 11.6% is thin — little cushion if costs rise
✗ Net margin of 6.9% is slim
• Revenue has compounded at 18.5% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

60/ 100

Average

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

Valuation

63/ 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.

Historical Valuation

Current P/E

27.4x

3Y Median

27.5x

40 monthly readings · mean 29.5x · range 6.0x–89.6x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 27.5x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 60% below the peer median of 69.2x.

vs. its own history

Fair

27.5x median over 40 months · -0%

vs. sector peers

Cheap

69.2x median of 4 peers · -60%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.3x

PEG

1.37

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 16.4% to 8.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 21.3% to 14.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.4 points, from 19.0% to 11.6%.
🔴Receivables growing faster than salesFinancial
Receivables up 131% against revenue up 66% — sales are being booked faster than they are collected.
🟡Debt is increasingFinancial
Total debt is up 26% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 115% against revenue up 66% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 60% 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?

Margins are being competed away
EBITDA margin has fallen from 19.0% to 11.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 131% against revenue up 66%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 16.4% 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
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

1Revenue growth stays above 14% a year✓ 18.5% CAGR
Latest reported year was 81.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹19 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 11%✓ 14.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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 · 6 neutral · 1 weak

Market Cap

₹152 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.4x

Fair

Fairly valued against the generic band

P/B Ratio

2.94x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.32

Profitable

Profitable on a per-share basis

ROE

8.4%

Moderate

Moderate capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

81.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

116.7%

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

-₹19 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

20.9%

Good

Healthy core-business profitability

Net Margin

6.9%

Average

Average bottom-line conversion

Current Ratio

2.43

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.18

Defensive

Steadier than the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

8.6 / 8.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

43.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹44 Cr	₹55 Cr	₹63 Cr	₹73 Cr	+18.5%
EBITDA	₹8 Cr	₹11 Cr	₹11 Cr	₹8 Cr	+0.4%
EBITDA Margin	19.0%	19.3%	16.9%	11.6%	—
PAT (Net Profit)	₹3 Cr	₹5 Cr	₹6 Cr	₹4 Cr	+20.0%
EPS	₹2.48	₹0.32	₹0.34	₹0.25	-53.5%
ROE	16.4%	20.4%	12.3%	8.4%	—
ROCE	21.3%	28.9%	18.6%	14.4%	—
Total Debt	₹16 Cr	₹16 Cr	₹10 Cr	₹20 Cr	+8.1%
Free Cash Flow	₹1 Cr	₹1 Cr	-₹9 Cr	-₹19 Cr	—

🟢 Revenue has grown at 18.5% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.4% a year).

🔴 EBITDA Margin has fallen from 19.0% to 11.6% over 3 years (-7.4 pts).

🟢 PAT (Net Profit) has grown at 20.0% a year over 3 years.

🔴 EPS has shrunk at 53.5% a year over 3 years.

🔴 ROE has fallen from 16.4% to 8.4% over 3 years (-8.0 pts).

🔴 ROCE has fallen from 21.3% to 14.4% over 3 years (-6.9 pts).

🔴 Total Debt has grown at 8.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹19 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹88 Cr

Total Liabilities

₹36 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹14 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.0%

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

1 mixed5 general

Compare with

Equitymaster, 16 Oct

Lorenzini Apparels Ltd. Share Price: Price Action Review

Univest, 10 Aug

Lorenzini Apparels Holds Gains: LAL.NS Trades Near ₹9.06 Amid Rangebound Movement - Gamma Exposure

https://www.siam.in/, 30 Aug

Penny stock Lorenzini Apparels hits upper circuit despite weak trends on Dalal Street

Livemint, 07 Jan

Lorenzini Apparels Q2 FY27 Preview

Univest, 17 SeptResults

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

Stock market update: Shares locked in 20% upper circuit even as markets remained volatile today, check detail

India.com, 07 Jan

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingValuation

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑