Credo Brands Marketing Limited

Consumer Cyclical — Apparel Retail · NSE

₹68.32+₹0.15 (+0.22%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. The direction of profits is 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 Credo Brands Marketing Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Credo Brands Marketing Limited engages in the retail of men's casual wear under the MUFTI brand in India.

IndustryApparel Retail

SectorConsumer Cyclical

Employees245

Annual revenue₹592 Cr

How does it make money?

Turns over ₹592 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 245 employees supports ₹2.42 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.42 Cr

Who are its competitors?

The closest listed comparisons in its industry are TRENT LTD, TITAN COMPANY LIMITED, 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 13.1% 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 +19% while net margin moved -49% 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+19%

Margin effect-49%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.9% — barely ahead of inflation
✗ Profit has declined at 15.1% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 63.9% in the latest year

Quality vs. Valuation

Company Quality

50/ 100

Average

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

Valuation

87/ 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

10.3x

3Y Median

13.5x

36 monthly readings · mean 13.7x · range 6.1x–24.2x

Sector Median

69.9x

median of 3 sector peers

🟢Current valuation is approximately 24% below its 3y median of 13.5x. 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 85% below the peer median of 69.9x.

vs. its own history

Cheap

13.5x median over 36 months · -24%

vs. sector peers

Cheap

69.9x median of 3 peers · -85%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

3.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 197% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 27.6% to 10.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.9% to 13.1% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.4 points, from 34.8% to 27.4%.
🔴Receivables growing faster than salesFinancial
Receivables up 72% against revenue up 19% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 39% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 24% 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 85% 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 34.8% to 27.4%. 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 72% against revenue up 19%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.9% 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.
Returns on shareholder capital are falling
ROE has dropped from 27.6% to 10.8%. 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

1EBITDA margin holds above 25%✓ 27.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✓ 3.7x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✓ 5.9% CAGR
Latest reported year was 4.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹113 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

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

6 good · 4 neutral · 1 weak

Market Cap

₹447 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.3x

Cheap

Cheap against the generic band

P/B Ratio

1.02x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹6.64

Profitable

Profitable on a per-share basis

ROE

10.8%

Moderate

Moderate capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.52x

Low

Conservative leverage

Revenue Growth (YoY)

4.4%

Modest

Modest growth

Profit Growth (YoY)

-63.9%

Falling

Profits are shrinking

Dividend Yield

2.93%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹113 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

5.9%

Average

Average margins

Net Margin

7.3%

Average

Average bottom-line conversion

Current Ratio

3.27

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.02

Market-like

Moves roughly in line with the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

70.5 / 74.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹498 Cr	₹567 Cr	₹618 Cr	₹592 Cr	+5.9%
EBITDA	₹173 Cr	₹163 Cr	₹184 Cr	₹162 Cr	-2.2%
EBITDA Margin	34.8%	28.7%	29.7%	27.4%	—
PAT (Net Profit)	₹78 Cr	₹59 Cr	₹68 Cr	₹47 Cr	-15.1%
EPS	₹12.05	₹9.2	₹10.52	₹7.25	-15.6%
ROE	27.6%	17.3%	16.7%	10.8%	—
ROCE	24.9%	17.6%	17.6%	13.1%	—
Total Debt	₹192 Cr	₹253 Cr	₹237 Cr	₹228 Cr	+5.9%
Free Cash Flow	₹38 Cr	₹20 Cr	₹138 Cr	₹113 Cr	+43.8%

🟢 Revenue has grown at 5.9% a year over 3 years.

🔴 EBITDA has shrunk at 2.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 34.8% to 27.4% over 3 years (-7.4 pts).

🔴 PAT (Net Profit) has shrunk at 15.1% a year over 3 years.

🔴 EPS has shrunk at 15.6% a year over 3 years.

🔴 ROE has fallen from 27.6% to 10.8% over 3 years (-16.7 pts).

🔴 ROCE has fallen from 24.9% to 13.1% over 3 years (-11.8 pts).

🔴 Total Debt has grown at 5.9% a year over 3 years.

🟢 Free Cash Flow has grown at 43.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹802 Cr

Total Liabilities

₹363 Cr

Cash & Equivalents

₹52 Cr

Operating Cash Flow

₹132 Cr

Capex

-₹20 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.5%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

28 Aug 2026

Peer Comparison

Company	P/E	ROE
TRENT LTD	87.2x	25.9%
TITAN COMPANY LIMITED	68.5x	36.7%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 mixed1 negative3 general

Credo Brands Marketing (MUFTI.NS) Slips 2.50% to ₹70.5 — Support at ₹66.97 in Focus - Hagopian Line

https://www.siam.in/, 02 Oct

Credo Brands Marketing Limited's (NSE:MUFTI) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?

Simply Wall Street, 06 Feb

Compare with

Equitymaster, 15 Oct

Credo Brands Marketing Share Price Target 2026: Bull Case Rs 125,

Univest, 01 JulAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Credo Brands publishes Q1FY26 standalone results in newspapers

scanx.trade, 13 AugResults

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

Credo Brands Marketing standalone net profit declines 63.65% in the June 2026 quarter

Business Standard, 12 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

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

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth

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.

All 5 tripwires holding · see Key things to watch ↑