S. M. Gold Limited

Consumer Cyclical — Luxury Goods · BSE

₹13.65+₹0.55 (+4.20%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

S. M. Gold Limited engages in the manufacturing and wholesale trading of gold mangalsutra jewellery in India.

IndustryLuxury Goods

SectorConsumer Cyclical

Employees10

Annual revenue₹156 Cr

How does it make money?

Turns over ₹156 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 10 employees supports ₹15.61 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹15.61 Cr

Who are its competitors?

The closest listed comparisons in its industry are TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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 8.4% 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 ROE25.9%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +206% while net margin moved -52% 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+206%

Margin effect-52%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Beta of 1.24 — amplifies market moves in both directions
✗ 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

49/ 100

Average

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

Valuation

84/ 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

9.0x

3Y Median

17.2x

40 monthly readings · mean 18.1x · range 9.4x–35.9x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 48% below its 3y median of 17.2x. 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 87% below the peer median of 69.2x.

vs. its own history

Cheap

17.2x median over 40 months · -48%

vs. sector peers

Cheap

69.2x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

12.2x

PEG

0.65

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 11.3% to 8.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹5 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 32% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 48% 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 87% 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?

The debt load needs earnings to hold up
Debt is 5.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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

1Revenue growth stays above 34% a year✓ 45.2% CAGR
Latest reported year was -11.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 0%✓ 1.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 5.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 8.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

₹18 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.0x

Cheap

Cheap against the generic band

P/B Ratio

0.52x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.52

Profitable

Profitable on a per-share basis

ROE

5.2%

Weak

Weak capital efficiency

ROCE

8.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

-11.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

263.6%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.1%

Weak

Thin margins leave little room for error

Net Margin

1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.51

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.24

Market-like

Moves roughly in line with the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

13.7 / 12.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹51 Cr	₹62 Cr	₹88 Cr	₹156 Cr	+45.2%
EBITDA	₹1 Cr	₹2 Cr	₹1 Cr	₹3 Cr	+60.8%
EBITDA Margin	1.3%	2.5%	1.5%	1.7%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹1 Cr	₹2 Cr	+13.7%
EPS	₹1.06	₹1.19	₹0.57	₹1.19	+3.9%
ROE	6.6%	5.4%	2.5%	5.2%	—
ROCE	11.3%	10.2%	6.1%	8.4%	—
Total Debt	₹13 Cr	₹17 Cr	₹16 Cr	₹16 Cr	+5.8%
Free Cash Flow	-₹1 Cr	-₹1 Cr	₹1 Cr	-₹5 Cr	—

🟢 Revenue has grown at 45.2% a year over 3 years.

🟢 EBITDA has grown at 60.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 1.7% over 3 years.

🟢 PAT (Net Profit) has grown at 13.7% a year over 3 years.

🟢 EPS has grown at 3.9% a year over 3 years.

🔴 ROE has fallen from 6.6% to 5.2% over 3 years (-1.4 pts).

🔴 ROCE has fallen from 11.3% to 8.4% over 3 years (-2.9 pts).

🔴 Total Debt has grown at 5.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹47 Cr

Total Liabilities

₹17 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

58.1%

Peer Comparison

Company	P/E	ROE
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

6 general

Compare with

Equitymaster, 15 Oct

SM Gold Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

SM Gold Rights Issue Feb 2026 Date, Price, Allotment, Ratio

IPO Watch, 22 May

S.M. Gold Board Approves Rights Issue Terms with Promoter Loan Conversion

scanx.trade, 23 Mar

Suratwwala Business Group Ltd leads gainers in 'B' group

Business Standard, 17 Sept

Utssav CZ Gold Jewels Share Price: valuation and peer view

Univest, 25 Sept

Watch Items

Revenue growth is negative (-11.9%) 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

StrongFinancial Health · Valuation

MiddlingGrowth

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

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑