Magenta Lifecare Limited

Consumer Cyclical — Furnishings, Fixtures & Appliances · BSE

₹7.40+₹0.40 (+5.71%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Magenta Lifecare Limited engages in the manufacture and sale of foam-based products in India. It offers mattresses, pillows, and beds under the Magenta brand. The company was formerly known as Magenta Lifecare Private Limited.

IndustryFurnishings, Fixtures & Appliances

SectorConsumer Cyclical

Annual revenue₹14 Cr

How does it make money?

Turns over ₹14 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 HAVELLS INDIA LIMITED, VOLTAS LTD, TITAN COMPANY 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 3.7% 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 ROE17.1%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +65% while net margin moved -91% 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+65%

Margin effect-91%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Beta of 1.25 — amplifies market moves in both directions
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

65/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

43.5x

3Y Median

61.7x

30 monthly readings · mean 60.0x · range 12.6x–137.5x

Sector Median

68.5x

median of 3 sector peers

🟢Current valuation is approximately 29% below its 3y median of 61.7x. 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 36% below the peer median of 68.5x.

vs. its own history

Cheap

61.7x median over 30 months · -29%

vs. sector peers

Cheap

68.5x median of 3 peers · -36%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

29.8x

PEG

1.33

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 14.2% to 0.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.5% to 3.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 18.1 points, from 20.3% to 2.2%.
🔴Receivables growing faster than salesFinancial
Receivables up 503% against revenue up 65% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 85% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 29% 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 36% 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 20.3% to 2.2%. 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 16.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 503% against revenue up 65%. 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 14.2% to 0.9%. 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.

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

1Revenue growth stays above 14% a year✓ 18.1% CAGR
Latest reported year was 107.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 0%✓ 2.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 16.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.

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

5 good · 2 neutral · 4 weak

Market Cap

₹5 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

43.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.39x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.17

Profitable

Profitable on a per-share basis

ROE

0.8%

Weak

Weak capital efficiency

ROCE

3.7%

Weak

Low return on total capital employed

Debt/Equity

0.40x

Low

Conservative leverage

Revenue Growth (YoY)

107.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

32.8%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

1.5%

Weak

Assets generate little profit

Operating Margin

4.1%

Weak

Thin margins leave little room for error

Net Margin

0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.99

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.25

Market-like

Moves roughly in line with the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

7.5 / 8.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹9 Cr	₹9 Cr	₹10 Cr	₹14 Cr	+18.1%
EBITDA	₹2 Cr	₹2 Cr	₹0 Cr	₹0 Cr	-43.4%
EBITDA Margin	20.3%	22.0%	0.4%	2.2%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹0 Cr	₹0 Cr	-46.4%
EPS	₹1.07	₹1.07	₹0.12	—	—
ROE	14.2%	10.8%	0.6%	0.9%	—
ROCE	26.5%	19.1%	2.3%	3.7%	—
Total Debt	₹5 Cr	₹3 Cr	₹2 Cr	₹5 Cr	+5.3%
Free Cash Flow	-₹1 Cr	—	-₹5 Cr	-₹1 Cr	—

🟢 Revenue has grown at 18.1% a year over 3 years.

🔴 EBITDA has shrunk at 43.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.3% to 2.2% over 3 years (-18.1 pts).

🔴 PAT (Net Profit) has shrunk at 46.4% a year over 3 years.

🔴 ROE has fallen from 14.2% to 0.9% over 3 years (-13.3 pts).

🔴 ROCE has fallen from 26.5% to 3.7% over 3 years (-22.9 pts).

🔴 Total Debt has grown at 5.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹24 Cr

Total Liabilities

₹11 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.9%

Peer Comparison

Company	P/E	ROE
HAVELLS INDIA LIMITED	43.5x	17.1%
VOLTAS LTD	75.8x	7.0%
TITAN COMPANY LIMITED	68.5x	36.7%

Recent News

6 general

Magenta Lifecare Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Magenta Lifecare Limited Share Price

Upstox, 05 May

Magenta Lifecare shifts AGM record date to September 21

scanx.trade, 01 Sept

Magenta Lifecare Limited Appoints Nikhil Bharatbhai Mistry as A Non - Executive and Independent Director

www.marketscreener.com, 30 Sept

Magenta Lifecare AGM resolutions pass with 99.91% in favour

scanx.trade, 28 Sept

MAGENTA Stock Price and Chart — BSE:MAGENTA

TradingView, 06 Jun

Watch Items

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

DalalBaazaar Thesis

MiddlingFinancial Health · Growth · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

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

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑