Quality Foils (India) Limited

Sector n/a · NSE

₹111.00₹0.00 (0.00%)

DalalBaazaar Score

32 / 100

🔴 Weak

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: The business is earning a fairly low return on the money invested in it, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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

The 60-second version of Quality Foils (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹184 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation.

EBITDA margin5.0%

Net margin0.8%

What is its competitive advantage?Little sign of one

Returns on capital of 10.7% 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.

ROCE10.7%

ROE4.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -1% while net margin moved -53% 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-1%

Margin effect-53%

DalalBaazaar Score

32/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.4% a year
✗ Profit has declined at 22.7% a year

Quality vs. Valuation

Company Quality

27/ 100

Weak

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

Valuation

60/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

10.6x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 54% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 11.6% to 4.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.7% to 10.7% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 43% against revenue growth of -1% — stock may not be moving.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 54% over 3 years, from ₹43 Cr to ₹66 Cr.
🔴High leverageFinancial
Debt/Equity of 2.08x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.1x to 1.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 54% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 43% against revenue up -1% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 7.2x 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 11.6% to 4.7%. 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.
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 3%✓ 5.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 7.2x
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✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 10.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 7 neutral · 3 weak

Market Cap

₹32 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

4.7%

Weak

Weak capital efficiency

ROCE

10.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.08x

High

High leverage

Revenue Growth (YoY)

22.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

3.7%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹111

Gross Margin

9.6%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

0.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.20

Adequate

Adequate, but no real cushion

Technical Snapshot

SMA 20 / SMA 50

52.3 / 57.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹186 Cr	₹155 Cr	₹151 Cr	₹184 Cr	-0.4%
EBITDA	₹8 Cr	₹6 Cr	₹5 Cr	₹9 Cr	+6.6%
EBITDA Margin	4.1%	3.8%	3.2%	5.0%	—
PAT (Net Profit)	₹3 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-22.7%
EPS	₹11.17	₹4.68	₹4.97	—	—
ROE	11.6%	4.6%	4.7%	4.7%	—
ROCE	16.7%	9.4%	8.2%	10.7%	—
Total Debt	₹43 Cr	₹35 Cr	₹59 Cr	₹66 Cr	+15.4%
Free Cash Flow	₹7 Cr	₹9 Cr	-₹27 Cr	-₹2 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.4% a year).

🟢 EBITDA has grown at 6.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.0% over 3 years.

🔴 PAT (Net Profit) has shrunk at 22.7% a year over 3 years.

🔴 ROE has fallen from 11.6% to 4.7% over 3 years (-7.0 pts).

🔴 ROCE has fallen from 16.7% to 10.7% over 3 years (-6.1 pts).

🔴 Total Debt has grown at 15.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹106 Cr

Total Liabilities

₹74 Cr

Total Debt

₹66 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹5 Cr

Recent News

6 general

Aluminum Foil Market Size, Share | Growth Forecast [2026-2034]

Fortune Business Insights, 28 Sept

JINDAL SUPREME (INDIA) LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 24 Sept

Stocks to Watch Today: Aster DM Quality Care, Jubilant Ingrevia, HG Infra, Atlanta Electricals, RailTel...

Moneycontrol.com, 19 Aug

SHRIKANHA Stock Price and Chart — NSE:SHRIKANHA

TradingView, 10 Dec

Kunal Bajaj, Jupiter Group: Building India’s aluminium foil edge via integration, scale and global competitiveness

AL Circle, 19 Mar

Consumer Battery Composite Copper Foil Market

Future Market Insights, 14 Jan

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🔴Financial HealthStretched6/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh3.9/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 3%5.0%
✗Debt / EBITDA falls below 3x7.2x
✗Free cash flow remains positive-₹2 Cr
✗Interest cover stays above 3x1.5x
✓ROCE stays above 8%10.7%