Le Merite Exports Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹20.77−₹0.35 (−1.66%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Le Merite Exports Limited, together with its subsidiaries, engages in the manufacturing, purchase, and sale of textile in India and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees23

Annual revenue₹336 Cr

How does it make money?

Turns over ₹336 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 23 employees supports ₹14.63 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹14.63 Cr

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 14.9% 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 -5% while net margin moved +185% 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-5%

Margin effect+185%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -0.24 — 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

56/ 100

Average

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

Valuation

47/ 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

90.3x

3Y Median

192.0x

40 monthly readings · mean 174.1x · range 21.6x–438.9x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 53% below its 3y median of 192.0x. 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 31% above the peer median of 69.2x.

vs. its own history

Cheap

192.0x median over 40 months · -53%

vs. sector peers

Expensive

69.2x median of 4 peers · +31%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

21.7x

PEG

2.30

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 2.5% to 4.7% over 3 years.
Cash generation is improving
Free cash flow is up 592% over 3 years.
Return on equity is rising
ROE has improved from 4.6% to 8.5%.
Return on capital is rising
ROCE has improved from 8.6% to 14.9%.
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

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.5% to 4.7%. 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 53% 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.
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 5.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 31% above the peer median. That premium needs a reason that persists, or it closes.
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 3%✓ 4.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✓ 3.4x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹27 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 12%✓ 14.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹260 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

90.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.91x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.23

Profitable

Profitable on a per-share basis

ROE

8.5%

Moderate

Moderate capital efficiency

ROCE

14.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.68x

Moderate

Moderate leverage

Revenue Growth (YoY)

-18.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

112.4%

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

₹27 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-11.0%

Weak

Thin margins leave little room for error

Net Margin

0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.97

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.24

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

19.8 / 21.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹354 Cr	₹445 Cr	₹494 Cr	₹336 Cr	-1.7%
EBITDA	₹9 Cr	₹9 Cr	₹17 Cr	₹16 Cr	+20.8%
EBITDA Margin	2.5%	2.1%	3.4%	4.7%	—
PAT (Net Profit)	₹4 Cr	₹2 Cr	₹5 Cr	₹12 Cr	+39.3%
EPS	₹0.37	₹0.15	₹0.46	₹0.92	+36.1%
ROE	4.6%	1.9%	4.9%	8.5%	—
ROCE	8.6%	9.6%	12.8%	14.9%	—
Total Debt	₹86 Cr	₹93 Cr	₹103 Cr	₹92 Cr	+2.3%
Free Cash Flow	₹4 Cr	-₹1 Cr	-₹9 Cr	₹27 Cr	+90.6%

🟡 Revenue has been broadly flat over 3 years (-1.7% a year).

🟢 EBITDA has grown at 20.8% a year over 3 years.

🟢 EBITDA Margin has risen from 2.5% to 4.7% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has grown at 39.3% a year over 3 years.

🟢 EPS has grown at 36.1% a year over 3 years.

🟢 ROE has risen from 4.6% to 8.5% over 3 years (+3.9 pts).

🟢 ROCE has risen from 8.6% to 14.9% over 3 years (+6.3 pts).

🔴 Total Debt has grown at 2.3% a year over 3 years.

🟢 Free Cash Flow has grown at 90.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹259 Cr

Total Liabilities

₹124 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹39 Cr

Capex

-₹11 Cr

Corporate Actions

Ex-Dividend Date

23 Sept 2024

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

InvestingPro’s Fair Value spotted 45% decline in Le Merite Exports By Investing.com

Investing.com India, 25 May

Do Le Merite Exports' (NSE:LEMERITE) Earnings Warrant Your Attention?

Simply Wall Street, 22 MayResults

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

Compare DEVIKA FINST with

Equitymaster, 14 Oct

Le Merite Exports buys 14.5% stake in subsidiary for Rs 1.45 lakh

scanx.trade, 23 Jun

Why Is Le Merite Exports Trading Near 52-Week Lows Despite Profitability?

Kalkine India, 10 Jun

Le Merite Exports Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 01 Oct

Watch Items

Revenue growth is negative (-18.7%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth · Profitability · Valuation

WeakRisk

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 of 5 tripwires tripped — Debt / EBITDA falls below 3x · see Key things to watch ↑