Nandan Denim Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹2.62+₹0.05 (+1.95%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

CAUTION

Risk

Low

Driven by 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. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Nandan Denim Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nandan Denim Limited manufactures and sells denim, shirting materials, yarn, and various fabrics in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees1,726

Annual revenue₹2,829 Cr

How does it make money?

Turns over ₹2,829 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 1,726 employees supports ₹1.64 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.6%

Net margin1.2%

Revenue / employee₹1.64 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 7.4% 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.

ROCE7.4%

ROE5.1%

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 +42% while net margin moved +4279% 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+42%

Margin effect+4279%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.99 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

59/ 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

10.1x

3Y Median

14.3x

40 monthly readings · mean 262.4x · range 8.0x–1301.7x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 30% below its 3y median of 14.3x. 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 69.2x.

vs. its own history

Cheap

14.3x median over 40 months · -30%

vs. sector peers

Cheap

69.2x median of 4 peers · -85%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

10.1x

P/B

0.58x

EV/EBITDA

4.9x

PEG

0.03

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Debt is being paid down
Total debt is down 75% over 3 years.
Return on equity is rising
ROE has improved from 0.1% to 5.1%.
Valuation below its historical average
At 10.1x the stock trades 30% below its own median of 14.3x.
Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.
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

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 75% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 30% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹139 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

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

1Revenue growth stays above 9% a year✓ 12.5% CAGR
Latest reported year was -40.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✓ 3.9x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹139 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.2x
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 · 2 neutral · 3 weak

Market Cap

₹378 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.1x

Cheap

Cheap against the generic band

P/B Ratio

0.58x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.26

Profitable

Profitable on a per-share basis

ROE

5.1%

Weak

Weak capital efficiency

ROCE

7.4%

Weak

Low return on total capital employed

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

-40.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

25.0%

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

₹139 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹2.62

P/E (Forward)

0.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

2.0%

Weak

Thin margins leave little room for error

Net Margin

1.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.99

Market-like

Moves roughly in line with the market

52W Range Position

49%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2.6 / 2.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

48.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,988 Cr	₹1,965 Cr	₹3,486 Cr	₹2,829 Cr	+12.5%
EBITDA	₹88 Cr	₹127 Cr	₹132 Cr	₹101 Cr	+4.4%
EBITDA Margin	4.5%	6.5%	3.8%	3.6%	—
PAT (Net Profit)	₹1 Cr	₹45 Cr	₹33 Cr	₹33 Cr	+296.5%
EPS	₹0	₹0.31	₹0.23	₹0.23	+286.0%
ROE	0.1%	7.7%	5.4%	5.1%	—
ROCE	7.4%	14.9%	10.7%	7.4%	—
Total Debt	₹465 Cr	₹330 Cr	₹249 Cr	₹118 Cr	-36.8%
Free Cash Flow	₹123 Cr	₹186 Cr	₹87 Cr	₹139 Cr	+4.1%

🟢 Revenue has grown at 12.5% a year over 3 years.

🟢 EBITDA has grown at 4.4% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.6% over 3 years.

🟢 PAT (Net Profit) has grown at 296.5% a year over 3 years.

🟢 EPS has grown at 286.0% a year over 3 years.

🟢 ROE has risen from 0.1% to 5.1% over 3 years (+5.0 pts).

🟡 ROCE has held roughly flat at 7.4% over 3 years.

🟢 Total Debt has shrunk at 36.8% a year over 3 years.

🟢 Free Cash Flow has grown at 4.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,032 Cr

Total Liabilities

₹380 Cr

Total Debt

₹118 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹144 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

52.7%

Corporate Actions

Ex-Dividend Date

05 Sept 2019

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

2 positive1 mixed3 general

Nandan Denim Q1FY27 net profit rises 32% to ₹1,480 lakh despite revenue drop

scanx.trade, 14 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Compare NANDAN EXIM with

Equitymaster, 13 Oct

Nandan Denim's (NSE:NDL) Soft Earnings Don't Show The Whole Picture

Simply Wall Street, 05 JunResults

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

Penny stock under ₹10 hits 20% upper circuit despite weak trend on Dalal Street

Livemint, 21 Aug

Nandan Denim standalone net profit rises 32.14% in the June 2026 quarter

Business Standard, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Penny stock under Rs.5 jumps 7% despite weak trends on Dalal Street. Do you own?

TradingView, 13 Aug

Watch Items

Revenue growth is negative (-40.6%) 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

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong16.4/20

🟢GrowthStrong13.3/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.6/10

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.

This thesis breaks if

✓Revenue growth stays above 9% a year12.5% CAGR
✓EBITDA margin holds above 2%3.6%
✓Interest cover stays above 3x3.9x
✓Free cash flow remains positive₹139 Cr
✓Debt / EBITDA stays below 2x1.2x