Spice Islands Industries Limited

Consumer Defensive — Beverages - Non-Alcoholic · BSE

₹117.00−₹0.28 (−0.24%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

NEUTRAL

Risk

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 both sales and profits growing well. Debt is 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 Spice Islands Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Spice Islands Industries Limited engages in the business of trading branded packaged beverages, providing hospitality services, and renting electric vehicles (EVs). It provides carbonated and pulp-based drinks, including drinking water.

IndustryBeverages - Non-Alcoholic

SectorConsumer Defensive

Employees38

Annual revenue₹18 Cr

How does it make money?

Turns over ₹18 Cr a year. Of every ₹100 of sales, about ₹32 reaches shareholders as profit, with ₹32 left at the operating level before interest, tax and depreciation. Each of its 38 employees supports ₹47.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹47.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSUMER PRODUCT LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. 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?Some evidence

ROCE of 40.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE51.0%

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 +2657% while net margin moved -268% 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+2657%

Margin effect-268%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 44.2x is demanding — it needs sustained high growth to justify
✗ P/E is 228% above its own historical median of 13.5x — expensive by its own standards
✗ P/B of 26.01x is a steep premium to book

Quality vs. Valuation

Company Quality

81/ 100

Excellent

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

Valuation

41/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

44.2x

2Y Median

13.5x

28 monthly readings · mean 25.9x · range 8.3x–93.6x

Sector Median

59.3x

median of 3 sector peers

⚠️Current valuation is approximately 228% above its 2y median of 13.5x. 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 25% below the peer median of 59.3x.

vs. its own history

Expensive

13.5x median over 28 months · +228%

vs. sector peers

Cheap

59.3x median of 3 peers · -25%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

62.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 8.2% to 32.4% over 3 years.
Return on capital is rising
ROCE has improved from -153.1% to 40.5%.
High return on capital employed
ROCE of 40.5% 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

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 330% over 3 years, from ₹0 Cr to ₹1 Cr.
🔴High leverageFinancial
Debt/Equity of 4.23x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 5075% against revenue up 2657% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 45% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 40.5% 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 8.2% to 32.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 25% 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 4.23x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 5075% against revenue up 2657%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 228% 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.
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 152% a year✓ 202.1% CAGR
Latest reported year was 825.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 30%✓ 32.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1 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 37%✓ 40.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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 · 2 neutral · 4 weak

Market Cap

₹365 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

44.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

26.01x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹2.65

Profitable

Profitable on a per-share basis

ROE

40.4%

Strong

Strong capital efficiency

ROCE

40.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

4.23x

High

High leverage

Revenue Growth (YoY)

825.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

190.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.10%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.0%

Average

Average margins

Net Margin

19.5%

Good

Strong bottom-line conversion

Current Ratio

2.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.25

Defensive

Steadier than the market

52W Range Position

93%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

101.4 / 98.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

86.9

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	—	₹1 Cr	₹18 Cr	+202.1%
EBITDA	₹0 Cr	₹0 Cr	₹1 Cr	₹6 Cr	+377.0%
EBITDA Margin	8.2%	—	160.4%	32.4%	—
PAT (Net Profit)	-₹0 Cr	₹0 Cr	₹0 Cr	₹6 Cr	—
EPS	₹-0.28	₹0.74	₹1.11	₹11.45	—
ROE	—	—	20.3%	40.4%	—
ROCE	-153.1%	—	49.7%	40.5%	—
Total Debt	₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+62.6%
Free Cash Flow	₹0 Cr	-₹0 Cr	-₹3 Cr	-₹1 Cr	—

🟢 Revenue has grown at 202.1% a year over 3 years.

🟢 EBITDA has grown at 377.0% a year over 3 years.

🟢 EBITDA Margin has risen from 8.2% to 32.4% over 3 years (+24.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹6 Cr.

🟢 EPS has turned positive, from ₹-0.28 to ₹11.45.

🟢 ROE has risen from 20.3% to 40.4% over 3 years (+20.1 pts).

🟢 ROCE has risen from -153.1% to 40.5% over 3 years (+193.6 pts).

🔴 Total Debt has grown at 62.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹18 Cr

Total Liabilities

₹4 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

63.0%

Corporate Actions

Dividend Rate

₹0.12

Ex-Dividend Date

31 Jul 2026

Peer Comparison

Company	P/E	ROE
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

3 positive1 mixed2 general

Spice Islands Industries Share Price: stock up to Rs 118.80

Univest, 12 Oct

Spice Islands Q1FY27 net profit jumps 321% to ₹1.40 crore on revenue surge

scanx.trade, 19 AugResults

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

Spice Islands Industries (BSE: 526827) Sales Up 823.83%: Reading a Low-Base Jump

Kalkine India, 02 OctResults

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

Bonus issues & stock splits: 6 stocks to turn ex-record date this week. Do you own any?

The Economic Times, 24 Aug

Spice Islands Industries Soars Over 2,000% in 3 Years as Rogers Revival, EV Expansion and Profit Growth Drive Momentum

TheWire.in, 03 JunCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Spice Islands Industries standalone net profit rises 324.24% in the June 2026 quarter

Business Standard, 20 AugResults

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

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
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

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 4 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 ↑