Nahar Industrial Enterprises Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹130.00−₹1.34 (−1.02%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

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, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:48 pm

Understanding the Business

Company site ↗

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

What does this company do?

Nahar Industrial Enterprises Limited engages in the textile and sugar business in India. The company operates through Textile, Sugar, and Others segments. It offers woven fabrics, yarns, garments, knit wear, garments, poly films, and other products.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees6,066

Annual revenue₹1,404 Cr

How does it make money?

Turns over ₹1,404 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 6,066 employees supports ₹23.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹23.1 lakh

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 7.8% 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?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -20% while net margin moved -18% 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-20%

Margin effect-18%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 7.3% a year
✗ Profit has declined at 13.4% a year
✗ Latest-year revenue growth of -18.5% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

83/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

7.8x

3Y Median

25.5x

40 monthly readings · mean 27.7x · range 5.7x–71.0x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 70% below its 3y median of 25.5x. 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 89% below the peer median of 69.2x.

vs. its own history

Cheap

25.5x median over 40 months · -70%

vs. sector peers

Cheap

69.2x median of 4 peers · -89%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.9x

PEG

—

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 8.2% to 4.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.8% to 7.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 150% over 3 years, from ₹268 Cr to ₹670 Cr.
🔴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.
🔴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.
🟡Profit is decliningFinancial
Net profit is down 35% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 70% 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 89% 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 6.0x 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 8.2% to 4.9%. 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.
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
3 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%✓ 7.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.0x
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✗ -₹114 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 7.8%
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

4 good · 3 neutral · 4 weak

Market Cap

₹562 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.8x

Cheap

Cheap against the generic band

P/B Ratio

0.54x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹16.72

Profitable

Profitable on a per-share basis

ROE

4.9%

Weak

Weak capital efficiency

ROCE

7.8%

Weak

Low return on total capital employed

Debt/Equity

0.65x

Moderate

Moderate leverage

Revenue Growth (YoY)

-18.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

508.4%

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

-₹114 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.6%

Average

Average margins

Net Margin

5.4%

Average

Average bottom-line conversion

Current Ratio

1.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

66%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

130.0 / 130.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,764 Cr	₹1,464 Cr	₹1,525 Cr	₹1,404 Cr	-7.3%
EBITDA	₹157 Cr	₹80 Cr	₹105 Cr	₹111 Cr	-10.8%
EBITDA Margin	8.9%	5.5%	6.9%	7.9%	—
PAT (Net Profit)	₹79 Cr	₹10 Cr	₹18 Cr	₹51 Cr	-13.4%
EPS	₹19.8	₹2.25	₹4.28	₹11.88	-15.7%
ROE	8.2%	1.0%	1.9%	4.9%	—
ROCE	12.8%	3.4%	5.4%	7.8%	—
Total Debt	₹268 Cr	₹522 Cr	₹611 Cr	₹670 Cr	+35.8%
Free Cash Flow	₹418 Cr	-₹211 Cr	-₹118 Cr	-₹114 Cr	—

🔴 Revenue has shrunk at 7.3% a year over 3 years.

🔴 EBITDA has shrunk at 10.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.9% over 3 years.

🔴 PAT (Net Profit) has shrunk at 13.4% a year over 3 years.

🔴 EPS has shrunk at 15.7% a year over 3 years.

🔴 ROE has fallen from 8.2% to 4.9% over 3 years (-3.3 pts).

🔴 ROCE has fallen from 12.8% to 7.8% over 3 years (-5.1 pts).

🔴 Total Debt has grown at 35.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹418 Cr to -₹114 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,900 Cr

Total Liabilities

₹857 Cr

Cash & Equivalents

₹21 Cr

Operating Cash Flow

₹63 Cr

Capex

-₹177 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.3%

Corporate Actions

Ex-Dividend Date

07 Sept 2017

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

Nahar Industrial incorporates warehousing subsidiary with ₹1 lakh capital

scanx.trade, 18 Oct

Nahar Industrial Enterprises Ltd is Rated Sell

MarketsMojo, 18 Oct

DCM Nouvelle vs Nahar Industrial Enterprises vs Vishal Fabrics

Univest, 16 Oct

Nahar Industrial Enterprises (NAHARINDUS.NS) Steadies Near ₹127.44 as Bulls Defend ₹121 Support Zone - Zero Lag EMA

https://www.siam.in/, 13 Oct

Nahar Industrial Enterprises Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Nahar Industrial Enterprises Share Price Target 2027: Base and Bull Targets Built on FY26 Earnings

Univest, 09 OctAnalyst view

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

Watch Items

Revenue growth is negative (-18.5%) 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.

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 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; ROCE stays above 8% · see Key things to watch ↑