Shree Balaji (Mala) Textiles Limited

Consumer Cyclical — Apparel Manufacturing · BSE

₹52.00+₹2.75 (+5.58%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Debt is 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 Shree Balaji (Mala) Textiles Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Shree Balaji (Mala) Textiles Limited engages in the manufacture, wholesale, and export of sarees and women's clothing wear under the Mala Saree brand.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Annual revenue₹212 Cr

How does it make money?

Turns over ₹212 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation.

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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 53.9%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 23.8% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +8% while net margin moved +333% 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+8%

Margin effect+333%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

88/ 100

Cheap

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

8.8x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 87% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.5x

PEG

0.13

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 4.6% to 7.6% over 3 years.
Return on equity is rising
ROE has improved from 8.8% to 21.3%.
Return on capital is rising
ROCE has improved from 38.7% to 53.9%.
High return on capital employed
ROCE of 53.9% is the mark of a business that converts capital into profit efficiently.
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

4 items require attention · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.51x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Debt is increasingFinancial
Total debt is up 43% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹13 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 53.9% 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 4.6% to 7.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 87% 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?

The debt load needs earnings to hold up
Debt is 4.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 2.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.
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

1EBITDA margin holds above 6%✓ 7.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹13 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.1x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 2.6% CAGR
Latest reported year was 9.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

7 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹52 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.8x

Cheap

Cheap against the generic band

P/B Ratio

1.36x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.91

Profitable

Profitable on a per-share basis

ROE

23.8%

Strong

Strong capital efficiency

ROCE

53.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.51x

High

High leverage

Revenue Growth (YoY)

9.8%

Modest

Modest growth

Profit Growth (YoY)

18.4%

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

-₹13 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

6.6%

Average

Average asset productivity

Operating Margin

7.1%

Average

Average margins

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.16

Adequate

Adequate, but no real cushion

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

51.7 / 61.1

Bearish alignment (short < long)

RSI (14)

50.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹196 Cr	₹196 Cr	₹193 Cr	₹212 Cr	+2.6%
EBITDA	₹9 Cr	₹11 Cr	₹13 Cr	₹16 Cr	+21.1%
EBITDA Margin	4.6%	5.7%	7.0%	7.6%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹5 Cr	₹6 Cr	+67.2%
EPS	₹1.27	₹2.48	₹4.99	₹5.91	+67.2%
ROE	8.8%	14.7%	22.8%	21.3%	—
ROCE	38.7%	50.2%	54.6%	53.9%	—
Total Debt	₹48 Cr	₹51 Cr	₹49 Cr	₹69 Cr	+12.7%
Free Cash Flow	₹7 Cr	₹4 Cr	₹8 Cr	-₹13 Cr	—

🟢 Revenue has grown at 2.6% a year over 3 years.

🟢 EBITDA has grown at 21.1% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 7.6% over 3 years (+3.0 pts).

🟢 PAT (Net Profit) has grown at 67.2% a year over 3 years.

🟢 EPS has grown at 67.2% a year over 3 years.

🟢 ROE has risen from 8.8% to 21.3% over 3 years (+12.5 pts).

🟢 ROCE has risen from 38.7% to 53.9% over 3 years (+15.2 pts).

🔴 Total Debt has grown at 12.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹13 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹149 Cr

Total Liabilities

₹121 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹13 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.3%

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

Shree Balaji (Mala) Textiles L Share Price

Upstox, 16 Oct

Compare with

Equitymaster, 18 Oct

Shree Balaji (Mala) Textiles debuts at a 90% premium on the BSE SME platform

The Economic Times, 29 Jul

Shree Balaji Mala Textiles SME IPO listing: Shares hit lower circuit on profit booking after listing at a 90% premium

Livemint, 29 JulPrice 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.

Shree Balaji Textiles settles GST demand for FY24-FY26

scanx.trade, 09 Oct

Compare with

Equitymaster, 17 Oct

Watch Items

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

StrongGrowth · Profitability · Valuation

MiddlingBusiness Quality

WeakFinancial Health · 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.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑