Shalimar Wires Industries Limited

Basic Materials — Paper & Paper Products · BSE

₹19.50−₹1.27 (−6.11%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shalimar Wires Industries Limited manufactures and sells a range of paper machine cloth in India. It offers forming fabric products, including single-layer, multi-layer, low density double layer, and shute support binder fabrics.

IndustryPaper & Paper Products

SectorBasic Materials

Employees324

Annual revenue₹142 Cr

How does it make money?

Turns over ₹142 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 324 employees supports ₹43.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹43.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS 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?Little sign of one

Returns on capital of 14.4% 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.

Peer median ROE22.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +18% while net margin moved -24% 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-24%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.6% — barely ahead of inflation
✗ Profit has declined at 3.8% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

85/ 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

11.9x

3Y Median

34.0x

40 monthly readings · mean 36.4x · range 12.6x–82.2x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 65% below its 3y median of 34.0x. 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 59% below the peer median of 28.7x.

vs. its own history

Cheap

34.0x median over 40 months · -65%

vs. sector peers

Cheap

28.7x median of 4 peers · -59%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 20.0% to 13.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.8% to 14.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 2.12x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — 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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 65% 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 59% 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?

Leverage amplifies any setback
Debt/Equity of 2.12x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 5.6% 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.
Returns on shareholder capital are falling
ROE has dropped from 20.0% to 13.5%. 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.
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

1EBITDA margin holds above 22%✓ 23.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.6% CAGR
Latest reported year was 13.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹16 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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 · 5 neutral · 1 weak

Market Cap

₹83 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.9x

Cheap

Cheap against the generic band

P/B Ratio

1.93x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.64

Profitable

Profitable on a per-share basis

ROE

13.5%

Moderate

Moderate capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.12x

High

High leverage

Revenue Growth (YoY)

13.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

112.5%

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

₹16 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.0%

Average

Average margins

Net Margin

4.8%

Average

Average bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

45%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

20.3 / 19.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

45.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹121 Cr	₹128 Cr	₹132 Cr	₹142 Cr	+5.6%
EBITDA	₹27 Cr	₹27 Cr	₹28 Cr	₹34 Cr	+7.3%
EBITDA Margin	22.7%	21.4%	21.4%	23.9%	—
PAT (Net Profit)	₹7 Cr	₹1 Cr	₹2 Cr	₹6 Cr	-3.8%
EPS	₹1.53	₹0.34	₹0.55	₹1.36	-3.9%
ROE	20.0%	4.2%	6.3%	13.5%	—
ROCE	17.8%	12.1%	11.4%	14.4%	—
Total Debt	₹91 Cr	₹90 Cr	₹89 Cr	₹91 Cr	+0.2%
Free Cash Flow	₹15 Cr	₹16 Cr	₹16 Cr	₹16 Cr	+2.8%

🟢 Revenue has grown at 5.6% a year over 3 years.

🟢 EBITDA has grown at 7.3% a year over 3 years.

🟢 EBITDA Margin has risen from 22.7% to 23.9% over 3 years (+1.1 pts).

🔴 PAT (Net Profit) has shrunk at 3.8% a year over 3 years.

🔴 EPS has shrunk at 3.9% a year over 3 years.

🔴 ROE has fallen from 20.0% to 13.5% over 3 years (-6.6 pts).

🔴 ROCE has fallen from 17.8% to 14.4% over 3 years (-3.4 pts).

🟡 Total Debt has been broadly flat over 3 years (0.2% a year).

🟢 Free Cash Flow has grown at 2.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹210 Cr

Total Liabilities

₹167 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

1.4%

Insider Holding

91.7%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 negative5 general

Shalimar Wires Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Shalimar Wires promoter group acquires shares off-market

scanx.trade, 30 Jun

Shalimar Wires Industries Ltd is Rated Hold

MarketsMojo, 06 Oct

Shalimar Wires Industries schedules 30th AGM for June 30

scanx.trade, 22 May

SHALIMAR WIRES INDUSTRIES LTD. Share Price

Upstox, 07 Apr

Fermenta Biotech consolidated net profit declines 55.38% in the June 2026 quarter

Business Standard, 11 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health

WeakGrowth · Profitability · Risk

Points for each in the Score ↑

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Interest cover stays above 3x · see Key things to watch ↑