Shri Techtex Limited

Sector n/a · NSE

₹69.85−₹0.65 (−0.92%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

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, 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

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

The 60-second version of Shri Techtex 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 ₹84 Cr a year. Of every ₹100 of sales, about ₹23 reaches shareholders as profit, with ₹34 left at the operating level before interest, tax and depreciation.

EBITDA margin33.9%

Net margin22.9%

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

ROCE has stayed above 15% in every year available and stands at 21.8%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE21.8%

ROE16.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +48% while net margin moved +43% 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+48%

Margin effect+43%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

88/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

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

6.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 24.0% to 33.9% over 3 years.
Debt is being paid down
Total debt is down 91% over 3 years.
High return on capital employed
ROCE of 21.8% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

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 30.2% to 16.4% — each rupee of shareholder capital earns less than it did.
Receivables growing faster than sales
Receivables are up 68% against revenue growth of 48% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 143% against revenue growth of 48% — stock may not be moving.

Red Flags

5 items require attention · 3 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.43x — 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 143% against revenue up 48% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 68% against revenue up 48% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.8% 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 24.0% to 33.9%. 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 91% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 2.43x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 68% against revenue up 48%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 30.2% to 16.4%. 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

1Revenue growth stays above 10% a year✓ 13.9% CAGR
Latest reported year was 1.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 32%✓ 33.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 21.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹174 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

16.4%

Strong

Strong capital efficiency

ROCE

21.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.43x

High

High leverage

Revenue Growth (YoY)

1.8%

Modest

Modest growth

Profit Growth (YoY)

31.5%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹69.85

Gross Margin

33.6%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

22.9%

Good

Strong bottom-line conversion

Current Ratio

4.99

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

60.5 / 60.0

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹57 Cr	₹76 Cr	₹83 Cr	₹84 Cr	+13.9%
EBITDA	₹14 Cr	₹21 Cr	₹24 Cr	₹29 Cr	+27.8%
EBITDA Margin	24.0%	27.5%	29.5%	33.9%	—
PAT (Net Profit)	₹9 Cr	₹12 Cr	₹15 Cr	₹19 Cr	+28.4%
EPS	₹3.65	₹5.48	₹5.88	—	—
ROE	30.2%	14.6%	14.9%	16.4%	—
ROCE	20.0%	20.7%	21.9%	21.8%	—
Total Debt	₹32 Cr	₹11 Cr	₹11 Cr	₹3 Cr	-55.2%
Free Cash Flow	-₹12 Cr	-₹1 Cr	₹16 Cr	-₹3 Cr	—

🟢 Revenue has grown at 13.9% a year over 3 years.

🟢 EBITDA has grown at 27.8% a year over 3 years.

🟢 EBITDA Margin has risen from 24.0% to 33.9% over 3 years (+9.9 pts).

🟢 PAT (Net Profit) has grown at 28.4% a year over 3 years.

🔴 ROE has fallen from 30.2% to 16.4% over 3 years (-13.9 pts).

🟢 ROCE has risen from 20.0% to 21.8% over 3 years (+1.8 pts).

🟢 Total Debt has shrunk at 55.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹134 Cr

Total Liabilities

₹16 Cr

Total Debt

₹3 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹1 Cr

Recent News

6 general

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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 QualityStrong16.7/20

🟡Financial HealthAdequate11.9/20

🟢GrowthStrong13.3/20

🟢ProfitabilityStrong10.2/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 10% a year13.9% CAGR
✓EBITDA margin holds above 32%33.9%
✗Free cash flow remains positive-₹3 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 19%21.8%