Sihora Industries Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹62.00₹0.00 (0.00%)

DalalBaazaar Score

35 / 100

🔴 Weak

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: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Sihora Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sihora Industries Limited engages in manufacturing and sale of narrow woven fabrics, lace, digitally printed narrow fabrics, woven labels, tapes, zippers, elastics, and other textile products. It also offers technical textiles for use in fashion and industrial sectors.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees15

Annual revenue₹19 Cr

How does it make money?

Turns over ₹19 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 15 employees supports ₹1.26 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.6%

Net margin5.1%

Revenue / employee₹1.26 Cr

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 9.9% 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.

ROCE9.9%

ROE9.1%

Peer median ROE25.9%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Profit has declined at 48.3% a year
✗ Profit fell 59.5% in the latest year

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

56/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

28.7x

1.2Y Median

17.7x

14 monthly readings · mean 17.4x · range 15.5x–18.5x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 62% above its 1.2y median of 17.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 59% below the peer median of 69.2x.

vs. its own history

Expensive

17.7x median over 14 months · +62%

vs. sector peers

Cheap

69.2x median of 4 peers · -59%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

28.7x

P/B

2.06x

EV/EBITDA

13.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention3

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 35.5% to 6.0% — each rupee of shareholder capital earns less than it did.
Valuation above its historical average
At 28.7x the stock trades 62% above its own median of 17.7x.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 8.93x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹5 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 48% over 1 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.93x. Interest is payable whether or not the business has a good year.
The price already assumes success
The stock trades 62% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 35.5% to 6.0%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 13.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 9.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 5.3x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 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

2 good · 6 neutral · 3 weak

Market Cap

₹33 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

28.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.06x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.16

Profitable

Profitable on a per-share basis

ROE

9.1%

Moderate

Moderate capital efficiency

ROCE

9.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

8.93x

High

High leverage

Revenue Growth (YoY)

32.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-59.5%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹62

ROA

4.8%

Average

Average asset productivity

Operating Margin

2.8%

Weak

Thin margins leave little room for error

Net Margin

5.1%

Average

Average bottom-line conversion

Current Ratio

4.09

Comfortable

Healthy short-term liquidity

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

59.6 / 60.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

100.0

Overbought zone

Financial Trend (2-Year)

Metric	FY25	FY26	1Y CAGR
EBITDA	₹4 Cr	₹3 Cr	-31.9%
PAT (Net Profit)	₹2 Cr	₹1 Cr	-48.3%
ROE	35.5%	6.0%	—
Free Cash Flow	-₹3 Cr	-₹5 Cr	—

🔴 EBITDA has shrunk at 31.9% a year over 1 years.

🔴 PAT (Net Profit) has shrunk at 48.3% a year over 1 years.

🔴 ROE has fallen from 35.5% to 6.0% over 1 years (-29.5 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹19 Cr

Total Liabilities

₹3 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.8%

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

Compare DHANLXMI FAB with

Equitymaster, 06 Oct

Sihora Industries IPO Allotment Status: Check Overall Subscription & Steps To Verify Status

Groww, 14 Oct

Sihora Industries shares list at 6% premium over IPO price on BSE SME platform

The Economic Times, 17 Oct

Sihora Industries IPO Date, Review, Price, Allotment Details

IPO Watch, 10 Oct

Sihora Industries Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Sihora Industries IPO: This SME IPO opens for subscription today. Check GMP, issue price, other details

The Economic Times, 10 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🔴Business QualityWeak7.9/20

🟡Financial HealthAdequate10.6/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak5.8/15

🔴ValuationDemanding6.1/15

🔴RiskHigh2.4/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 12%13.6%
✗Free cash flow remains positive-₹5 Cr
✓Debt / EBITDA stays below 2x0.6x
✓ROCE stays above 8%9.9%
✓Interest cover stays above 4x5.3x