Loyal Textile Mills Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹212.18+₹4.17 (+2.00%)

DalalBaazaar Score

31 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, short-term liabilities exceed short-term assets, the company is currently loss-making.

In simple words: The company is currently losing money, but sales are shrinking. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Loyal Textile Mills Limited manufactures and sells yarn, woven fabric, knitted fabric, and technical clothing products for the textile and apparel industries in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees351

Annual revenue₹400 Cr

How does it make money?

Turns over ₹400 Cr a year. Of every ₹100 of sales, about ₹-16 reaches shareholders as profit, with ₹0 left at the operating level before interest, tax and depreciation. Each of its 351 employees supports ₹1.14 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin0.5%

Net margin-16.2%

Revenue / employee₹1.14 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.

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?Little sign of one

Returns on capital of -12.9% 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.

ROCE-12.9%

ROE-31.7%

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 -70% while net margin moved -7713% 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-70%

Margin effect-7713%

DalalBaazaar Score

31/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 33.2% a year
✗ Profit fell 26.2% in the latest year

Quality vs. Valuation

Company Quality

27/ 100

Weak

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

Valuation

30/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

0.50x

EV/EBITDA

163.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 67% over 3 years.
Cash generation is improving
Free cash flow is up 34% over 3 years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 3.7% to 0.5% over 3 years.
Return on equity is falling
ROE has dropped from 0.8% to -31.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 8.0% to -12.9% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.85 — near-term obligations exceed near-term assets.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -0.8x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹65 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 0.2x to -0.8x.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.85 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 67% 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?

Margins are being competed away
EBITDA margin has fallen from 3.7% to 0.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 111.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 0.8% to -31.7%. 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.
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 -2%✓ 0.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 111.0x
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✗ -0.8x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹89 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ -12.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

2 good · 3 neutral · 6 weak

Market Cap

₹102 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.50x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-98.91

Loss-making

Negative earnings per share — the business is losing money

ROE

-31.7%

Weak

Weak capital efficiency

ROCE

-12.9%

Weak

Low return on total capital employed

Debt/Equity

1.06x

Moderate

Moderate leverage

Revenue Growth (YoY)

-36.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

-26.2%

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

₹89 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹212.18

Operating Margin

-6.0%

Weak

Thin margins leave little room for error

Net Margin

-13.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.85

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.55

Defensive

Steadier than the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

210.2 / 213.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,339 Cr	₹896 Cr	₹592 Cr	₹400 Cr	-33.2%
EBITDA	₹50 Cr	₹12 Cr	-₹24 Cr	₹2 Cr	-66.2%
EBITDA Margin	3.7%	1.4%	-4.0%	0.5%	—
PAT (Net Profit)	₹3 Cr	-₹39 Cr	-₹51 Cr	-₹65 Cr	—
EPS	₹5.91	₹-82	₹-97.27	₹-134.28	—
ROE	0.8%	-12.3%	-19.1%	-31.7%	—
ROCE	8.0%	-1.8%	3.5%	-12.9%	—
Total Debt	₹662 Cr	₹622 Cr	₹413 Cr	₹216 Cr	-31.2%
Free Cash Flow	₹66 Cr	₹106 Cr	₹148 Cr	₹89 Cr	+10.1%

🔴 Revenue has shrunk at 33.2% a year over 3 years.

🔴 EBITDA has shrunk at 66.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 3.7% to 0.5% over 3 years (-3.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹3 Cr to -₹65 Cr.

🔴 EPS has turned negative, from ₹5.91 to ₹-134.28.

🔴 ROE has fallen from 0.8% to -31.7% over 3 years (-32.5 pts).

🔴 ROCE has fallen from 8.0% to -12.9% over 3 years (-21.0 pts).

🟢 Total Debt has shrunk at 31.2% a year over 3 years.

🟢 Free Cash Flow has grown at 10.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹525 Cr

Total Liabilities

₹322 Cr

Total Debt

₹216 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹89 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.5%

Corporate Actions

Ex-Dividend Date

14 Sept 2022

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

3 mixed3 general

Loyal Textile Mills (LOYALTEX) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Why Is Loyal Textile Mills Share Price Falling Key Reasons 2026

Univest, 16 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.

Loyal Textile Mills passes all six resolutions at 80th AGM

scanx.trade, 22 Sept

Loyal Textile Mills Ltd (NSE: LOYALTEX) Rises 15.52% as Stock Draws Market Attention

Kalkine India, 23 Sept

Loyal Textile Mills reports consolidated net loss of Rs 1.50 crore in the June 2026 quarter

Business Standard, 15 AugResults

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

Loyal Textile Mills Ltd. Share Price: Price Rise Analysis

Univest, 12 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-36.4%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak4.7/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak2.5/15

🟡ValuationFair7.1/15

🔴RiskHigh4.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -2%0.5%
✗Debt / EBITDA falls below 3x111.0x
✗Interest cover stays above 3x-0.8x
✓Free cash flow remains positive₹89 Cr
✗ROCE stays above 8%-12.9%