Shekhawati Industries Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹22.45+₹1.06 (+4.96%)

DalalBaazaar Score

60 / 100

🟢 Good

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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shekhawati Industries Limited engages in the textile and real estate operation businesses in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees58

Annual revenue₹9 Cr

How does it make money?

Turns over ₹9 Cr a year. Of every ₹100 of sales, about ₹102 reaches shareholders as profit, with ₹129 left at the operating level before interest, tax and depreciation. Each of its 58 employees supports ₹14.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹14.8 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.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 38.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 40.1% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 -97% while net margin moved -1548% 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-97%

Margin effect-1548%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 69.4% a year

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

77/ 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

6.3x

2Y Median

6.9x

28 monthly readings · mean 5.5x · range 0.5x–12.4x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 2y median of 6.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 91% below the peer median of 69.2x.

vs. its own history

Fair

6.9x median over 28 months · -9%

vs. sector peers

Cheap

69.2x median of 4 peers · -91%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -4.0% to 129.4% over 3 years.
Debt is being paid down
Total debt is down 99% over 3 years.
High return on capital employed
ROCE of 38.0% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 3 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 6.28x — earnings must service borrowings before shareholders see anything.
🔴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 1338% against revenue up -97% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹10 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 38.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from -4.0% to 129.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 99% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 91% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 6.28x. Interest is payable whether or not the business has a good year.
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
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 127%✓ 129.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹10 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 35%✓ 38.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 6.9x✓ 6.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 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 · 3 neutral · 3 weak

Market Cap

₹77 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.3x

Cheap

Cheap against the generic band

P/B Ratio

3.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.58

Profitable

Profitable on a per-share basis

ROE

40.1%

Strong

Strong capital efficiency

ROCE

38.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

6.28x

High

High leverage

Revenue Growth (YoY)

-49.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

125.6%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-104.2%

Weak

Thin margins leave little room for error

Net Margin

82.5%

Good

Strong bottom-line conversion

Current Ratio

3.07

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.01

Market-like

Moves roughly in line with the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

25.2 / 20.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹299 Cr	₹67 Cr	₹49 Cr	₹9 Cr	-69.4%
EBITDA	-₹12 Cr	₹20 Cr	₹8 Cr	₹11 Cr	—
EBITDA Margin	-4.0%	29.0%	15.6%	129.4%	—
PAT (Net Profit)	-₹21 Cr	₹154 Cr	₹6 Cr	₹9 Cr	—
EPS	₹-6.2	₹44.67	₹1.82	₹2.55	—
ROE	—	2117.4%	47.6%	40.1%	—
ROCE	—	971.9%	45.6%	38.0%	—
Total Debt	₹202 Cr	₹1 Cr	₹0 Cr	₹1 Cr	-81.0%
Free Cash Flow	₹1 Cr	₹12 Cr	-₹1 Cr	-₹10 Cr	—

🔴 Revenue has shrunk at 69.4% a year over 3 years.

🟢 EBITDA has turned positive, from -₹12 Cr to ₹11 Cr.

🟢 EBITDA Margin has risen from -4.0% to 129.4% over 3 years (+133.4 pts).

🟢 PAT (Net Profit) has turned positive, from -₹21 Cr to ₹9 Cr.

🟢 EPS has turned positive, from ₹-6.2 to ₹2.55.

🔴 ROE has fallen from 2117.4% to 40.1% over 3 years (-2077.3 pts).

🔴 ROCE has fallen from 971.9% to 38.0% over 3 years (-933.8 pts).

🟢 Total Debt has shrunk at 81.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹32 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.4%

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

1 positive5 general

SHEKHAWATI Stock Price and Chart — NSE:SHEKHAWATI

TradingView, 29 Sept

Shekhawati Industries Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 01 Oct

Shekhawati Industries Jumps 19.97% to ₹16.52

Kalkine India, 11 Aug

Shekhawati Industries Q1 Results: Net profit jumps 126% YoY to ₹636 lakh

scanx.trade, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Shekhawati Industries Ltd Locks at Lower Circuit With 4.94% Loss — Sellers Queue, No Buyers in Sight

MarketsMojo, 13 Oct

Regency Ceramics Ltd leads gainers in 'B' group

Business Standard, 12 Aug

Watch Items

Revenue growth is negative (-49.0%) 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

StrongBusiness Quality · Profitability · Valuation

MiddlingFinancial Health

WeakGrowth · Risk

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑