PBM Polytex Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹61.45−₹2.53 (−3.95%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by moderate debt load, 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, 6:07 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 PBM Polytex Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

PBM Polytex Limited manufactures and sells cotton yarns in India and internationally. It offers single and double count yarns; and gassed products. The company also operates yarn spinning units, windmills and solar power plants. It also exports its products.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees714

Annual revenue₹164 Cr

How does it make money?

Turns over ₹164 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 714 employees supports ₹23.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin-4.0%

Net margin-1.0%

Revenue / employee₹23.0 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.

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 -1.7% 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.

ROCE-1.7%

ROE-1.4%

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 -18% while net margin moved -669% 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-18%

Margin effect-669%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

78/ 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

22.8x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 67% 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 · -67%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.8x

P/B

0.37x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 1.1% to -4.0% over 3 years.
Debt is rising
Total debt is up 74% over 3 years — worth checking what it funded.
Return on capital is falling
ROCE has declined from 0.5% to -1.7% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 29% against revenue growth of -18% — stock may not be moving.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 74% over 3 years, from ₹1 Cr to ₹1 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only -45.5x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹2 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.1 points, from 1.1% to -4.0%.
🟡Inventory building faster than salesFinancial
Inventory up 29% against revenue up -18% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 67% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 1.1% to -4.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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
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

1EBITDA margin holds above -6%✓ -4.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -45.5x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -1.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 10 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

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹42 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.8x

Fair

Fairly valued against the generic band

P/B Ratio

0.37x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.69

Profitable

Profitable on a per-share basis

ROE

-1.4%

Weak

Weak capital efficiency

ROCE

-1.7%

Weak

Low return on total capital employed

Debt/Equity

0.97x

Moderate

Moderate leverage

Revenue Growth (YoY)

-16.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

64.5%

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

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹61.45

Operating Margin

6.0%

Average

Average margins

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

5.12

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

RSI (14)

52.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹200 Cr	₹189 Cr	₹174 Cr	₹164 Cr	-6.4%
EBITDA	₹2 Cr	-₹7 Cr	-₹4 Cr	-₹7 Cr	—
EBITDA Margin	1.1%	-3.9%	-2.2%	-4.0%	—
PAT (Net Profit)	₹0 Cr	-₹6 Cr	-₹4 Cr	-₹2 Cr	—
EPS	₹0.49	₹-9.38	₹-6.45	₹-2.29	—
ROE	0.3%	-5.5%	-3.9%	-1.4%	—
ROCE	0.5%	-6.6%	-5.1%	-1.7%	—
Total Debt	₹1 Cr	₹1 Cr	₹0 Cr	₹1 Cr	+20.4%
Free Cash Flow	₹18 Cr	-₹16 Cr	-₹7 Cr	₹3 Cr	-45.8%

🔴 Revenue has shrunk at 6.4% a year over 3 years.

🔴 EBITDA has turned negative, from ₹2 Cr to -₹7 Cr.

🔴 EBITDA Margin has fallen from 1.1% to -4.0% over 3 years (-5.1 pts).

🔴 PAT (Net Profit) has turned negative, from ₹0 Cr to -₹2 Cr.

🔴 EPS has turned negative, from ₹0.49 to ₹-2.29.

🔴 ROE has fallen from 0.3% to -1.4% over 3 years (-1.7 pts).

🔴 ROCE has fallen from 0.5% to -1.7% over 3 years (-2.3 pts).

🔴 Total Debt has grown at 20.4% a year over 3 years.

🔴 Free Cash Flow has shrunk at 45.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹131 Cr

Total Liabilities

₹17 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.3%

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

6 general

PBM Polytex Ltd (NSE: PBMPOLY) Declines 6.81% as Stock Draws Market Attention

Kalkine India, 01 Oct

Volume Gainers Today, October 15, 2026 at 12:00 PM

HDFC Sky, 15 Oct

PBM Polytex Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 27 Aug

PBM Polytex faces complete shutdown at BLP Super Spinners unit

scanx.trade, 02 Jun

Volume Gainers Today, October 14, 2026 at 12:00 PM

HDFC Sky, 14 Oct

TNA SOLUTIONS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 10 Oct

Watch Items

Revenue growth is negative (-16.4%) 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 HealthAdequate11.8/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak3.2/15

🟢ValuationAttractive11.3/15

🔴RiskHigh4.4/10

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. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -6%-4.0%
✗Interest cover stays above 3x-45.5x
✓Free cash flow remains positive₹3 Cr
✗ROCE stays above 8%-1.7%