Sambandam Spinning Mills Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹105.00+₹4.23 (+4.20%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 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 Sambandam Spinning Mills Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sambandam Spinning Mills Limited engages in the manufacturing and sale of yarn and related products in India and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees1,421

Annual revenue₹262 Cr

How does it make money?

Turns over ₹262 Cr a year. Of every ₹100 of sales, about ₹-2 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 1,421 employees supports ₹18.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin5.2%

Net margin-2.2%

Revenue / employee₹18.4 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 2.7% 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.

ROCE2.7%

ROE-7.0%

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 +0% while net margin moved -52% 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+0%

Margin effect-52%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✓ ROE has improved by 4.7 points over the period

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

44/ 100

Expensive

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

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

0.56x

EV/EBITDA

13.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from -11.7% to -7.0%.
Return on capital is rising
ROCE has improved from -1.6% to 2.7%.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 4 high

🔴High leverageFinancial
Debt/Equity of 1.73x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.4x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹6 Cr in the latest reported year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 10.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 0.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 3%✓ 5.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 10.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 0.4x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 0.1% CAGR
Latest reported year was -6.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

4 / 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

2 good · 2 neutral · 7 weak

Market Cap

₹45 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.56x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-13.59

Loss-making

Negative earnings per share — the business is losing money

ROE

-7.0%

Weak

Weak capital efficiency

ROCE

2.7%

Weak

Low return on total capital employed

Debt/Equity

1.73x

High

High leverage

Revenue Growth (YoY)

-6.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

-25.6%

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

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹105

Operating Margin

5.4%

Average

Average margins

Net Margin

-2.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.20

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.18

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

RSI (14)

41.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹261 Cr	₹218 Cr	₹267 Cr	₹262 Cr	+0.1%
EBITDA	₹12 Cr	₹11 Cr	₹11 Cr	₹14 Cr	+5.5%
EBITDA Margin	4.4%	5.1%	4.3%	5.2%	—
PAT (Net Profit)	-₹12 Cr	-₹8 Cr	-₹7 Cr	-₹6 Cr	—
EPS	₹-27.51	₹-18.41	₹-17.23	₹-13.29	—
ROE	-11.7%	-8.6%	-8.5%	-7.0%	—
ROCE	-1.6%	1.3%	1.0%	2.7%	—
Total Debt	₹135 Cr	₹124 Cr	₹119 Cr	₹139 Cr	+0.9%
Free Cash Flow	₹10 Cr	₹21 Cr	₹14 Cr	₹7 Cr	-13.2%

🟡 Revenue has been broadly flat over 3 years (0.1% a year).

🟢 EBITDA has grown at 5.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.2% over 3 years.

🟢 ROE has risen from -11.7% to -7.0% over 3 years (+4.7 pts).

🟢 ROCE has risen from -1.6% to 2.7% over 3 years (+4.3 pts).

🟡 Total Debt has been broadly flat over 3 years (0.9% a year).

🔴 Free Cash Flow has shrunk at 13.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹260 Cr

Total Liabilities

₹180 Cr

Total Debt

₹139 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹13 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.2%

Corporate Actions

Ex-Dividend Date

16 Sept 2014

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

Sambandam Spinning Mills | Stock Share Price Live

MarketSmith India, 17 Oct

Sambandam Spinning Mills Ltd leads gainers in 'B' group

Business Standard, 20 Aug

Sambandam Spinning Mills Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Sambandam Spinning Mills shareholders pass all 52nd AGM resolutions

scanx.trade, 18 Sept

Sambandam Spinning Mills Stock Momentum and Key Levels

Kalkine India, 21 Aug

Sambandam Spinning Mills Ltd. Peer Comparison – Compare with Others

Value Research, 03 Sept

Watch Items

Revenue growth is negative (-6.2%) 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 HealthAdequate9/20

🔴GrowthWeak7.6/20

🔴ProfitabilityWeak5/15

🟡ValuationFair7.1/15

🟡RiskModerate5.3/10

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

This thesis breaks if

✓EBITDA margin holds above 3%5.2%
✗Debt / EBITDA falls below 3x10.2x
✗Interest cover stays above 3x0.4x
✗Revenue growth stays above 4% a year0.1% CAGR
✓Free cash flow remains positive₹7 Cr