Shree Karni Fabcom Limited

Sector n/a · NSE

₹780.00+₹30.50 (+4.07%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

The 60-second version of Shree Karni Fabcom 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 ₹204 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Some evidence

ROCE of 18.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +60% while net margin moved +106% 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+60%

Margin effect+106%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

61/ 100

Average

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

Valuation

35/ 100

Expensive

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.

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

EV/EBITDA

18.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.9% to 17.7% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 19.7% to 13.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.1% to 18.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 115% over 3 years, from ₹46 Cr to ₹98 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.5x to 5.0x.
🟡Inventory building faster than salesFinancial
Inventory up 112% against revenue up 60% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.5% 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 11.9% to 17.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Returns on shareholder capital are falling
ROE has dropped from 19.7% to 13.1%. 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.
Several serious flags at once
2 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

1Revenue growth stays above 13% a year✓ 17.0% CAGR
Latest reported year was 21.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 15%✓ 18.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

2 good · 8 neutral · 1 weak

Market Cap

₹564 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

13.1%

Moderate

Moderate capital efficiency

ROCE

18.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

21.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

0.9%

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

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

29.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

7.5%

Average

Average bottom-line conversion

Current Ratio

1.26

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

389.9 / 380.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

73.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹127 Cr	₹137 Cr	₹167 Cr	₹204 Cr	+17.0%
EBITDA	₹15 Cr	₹26 Cr	₹31 Cr	₹36 Cr	+33.6%
EBITDA Margin	11.9%	19.0%	18.6%	17.7%	—
PAT (Net Profit)	₹5 Cr	₹15 Cr	₹15 Cr	₹15 Cr	+48.9%
EPS	₹6.53	₹20.8	₹22.51	—	—
ROE	19.7%	22.2%	16.2%	13.1%	—
ROCE	26.1%	25.2%	21.5%	18.5%	—
Total Debt	₹46 Cr	₹79 Cr	₹103 Cr	₹98 Cr	+29.1%
Free Cash Flow	-₹10 Cr	-₹16 Cr	-₹47 Cr	-₹11 Cr	—

🟢 Revenue has grown at 17.0% a year over 3 years.

🟢 EBITDA has grown at 33.6% a year over 3 years.

🟢 EBITDA Margin has risen from 11.9% to 17.7% over 3 years (+5.8 pts).

🟢 PAT (Net Profit) has grown at 48.9% a year over 3 years.

🔴 ROE has fallen from 19.7% to 13.1% over 3 years (-6.6 pts).

🔴 ROCE has fallen from 26.1% to 18.5% over 3 years (-7.6 pts).

🔴 Total Debt has grown at 29.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹251 Cr

Total Liabilities

₹133 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹16 Cr

Capex

-₹27 Cr

Recent News

1 mixed5 general

Shree Karni Fabcom Ltd. Share Price Fall: NSE Stock Analysis

Univest, 17 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Shree Karni Fabcom Ltd. Share Price and Textile Valuation

Univest, 18 Aug

Shree Karni Fabcom shares hit 5% upper circuit after listing at 14.5% premium

Livemint, 14 Mar

Shree Karni Fabcom (NSEI:SHREEKARNI) - Stock Analysis

Simply Wall Street, 16 Mar

Shree Karni Fabcom lists at 14% premium over IPO price on NSE Emerge

Moneycontrol.com, 14 Mar

SHREE KARNI FABCOM LTD Share Price - Live NSE: SHREEKARNI Stock Price & Chart

Upstox, 06 May

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.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability · Valuation

WeakRisk

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑