Parmeshwari Silk Mills Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹296.10+₹0.05 (+0.02%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

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, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Parmeshwari Silk Mills Limited manufactures and sells woven fabrics in India. It is also involved in spinning of yarns, spun, filament yarns, and various blends; and weaving of various yarns, spun, and filament yarns.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees97

Annual revenue₹249 Cr

How does it make money?

Turns over ₹249 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 97 employees supports ₹2.57 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.57 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 17.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE25.9%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +44% while net margin moved +25% 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+44%

Margin effect+25%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 2.16x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.36 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
• Interest cover of 2.7x is adequate
✗ Debt has grown 15.6% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

68/ 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

8.9x

2Y Median

3.0x

21 monthly readings · mean 4.6x · range 0.7x–12.7x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 199% above its 2y median of 3.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

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

vs. its own history

Expensive

3.0x median over 21 months · +199%

vs. sector peers

Cheap

69.2x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.0x

PEG

0.41

What's Good / What's Bad

🟢 What's Going Well2

Return on capital is rising
ROCE has improved from 15.6% to 17.6%.
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

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 54% over 3 years, from ₹90 Cr to ₹139 Cr.
🔴High leverageFinancial
Debt/Equity of 2.16x — earnings must service borrowings before shareholders see anything.
🔴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.
🟡Inventory building faster than salesFinancial
Inventory up 75% against revenue up 44% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 5.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 199% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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
4 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

1Revenue growth stays above 10% a year✓ 13.0% CAGR
Latest reported year was -1.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 5.5x
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✗ -₹33 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.7x
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

₹89 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.9x

Cheap

Cheap against the generic band

P/B Ratio

1.38x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹33.15

Profitable

Profitable on a per-share basis

ROE

15.5%

Strong

Strong capital efficiency

ROCE

17.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.16x

High

High leverage

Revenue Growth (YoY)

-1.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-0.7%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹33 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.6%

Average

Average margins

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

1.36

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.33

Defensive

Steadier than the market

52W Range Position

56%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

321.9 / 325.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

16.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹173 Cr	₹203 Cr	₹233 Cr	₹249 Cr	+13.0%
EBITDA	₹16 Cr	₹19 Cr	₹24 Cr	₹25 Cr	+16.6%
EBITDA Margin	9.2%	9.3%	10.4%	10.1%	—
PAT (Net Profit)	₹6 Cr	₹6 Cr	₹9 Cr	₹10 Cr	+21.8%
EPS	₹18.4	₹20.11	₹28.81	₹33.21	+21.8%
ROE	13.7%	13.1%	15.8%	15.5%	—
ROCE	15.6%	14.7%	19.6%	17.6%	—
Total Debt	₹90 Cr	₹121 Cr	₹124 Cr	₹139 Cr	+15.6%
Free Cash Flow	₹1 Cr	-₹31 Cr	-₹23 Cr	-₹33 Cr	—

🟢 Revenue has grown at 13.0% a year over 3 years.

🟢 EBITDA has grown at 16.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.1% over 3 years.

🟢 PAT (Net Profit) has grown at 21.8% a year over 3 years.

🟢 EPS has grown at 21.8% a year over 3 years.

🟢 ROE has risen from 13.7% to 15.5% over 3 years (+1.7 pts).

🟢 ROCE has risen from 15.6% to 17.6% over 3 years (+2.1 pts).

🔴 Total Debt has grown at 15.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹33 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹258 Cr

Total Liabilities

₹193 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹18 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.6%

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

6 general

Compare with

Equitymaster, 16 Oct

PARMESHWARI SILK MILLS Lower Circuit Today: Price, Data and Peers

Univest, 05 Oct

Parmeshwari Silk Mills schedules AGM for September 19, 2026

scanx.trade, 27 Aug

PARMESHWARI SILK MILLS Upper Circuit Today: Price, Data and Peers

Univest, 23 Sept

Eastern Silk Industries Ltd. Peer Comparison – Compare with Others

Value Research, 01 Sept

Compare with

Equitymaster, 30 Sept

Watch Items

Revenue growth is negative (-1.3%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakFinancial Health

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. 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 ↑