Surbhi Industries Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹91.28+₹3.79 (+4.33%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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

Company site ↗

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

What does this company do?

Surbhi Industries Limited manufactures and sells knitted fabrics and yarns in India. The company offers yarn, weave, knits, embroidery, and garments. The company was founded in 1976 and is headquartered in Surat, India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Annual revenue₹32 Cr

How does it make money?

Turns over ₹32 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation.

EBITDA margin21.4%

Net margin6.3%

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 11.4% 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.

ROCE11.4%

ROE10.4%

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +16% while net margin moved +1812% 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+16%

Margin effect+1812%

DalalBaazaar Score

54/ 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

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

72/ 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

16.8x

3Y Median

15.8x

40 monthly readings · mean 17.3x · range 1.5x–51.5x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 15.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 76% below the peer median of 69.2x.

vs. its own history

Fair

15.8x median over 40 months · +6%

vs. sector peers

Cheap

69.2x median of 4 peers · -76%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

16.8x

P/B

—

EV/EBITDA

8.1x

PEG

0.09

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 18.8% to 21.4% over 3 years.
Cash generation is improving
Free cash flow is up 829% over 3 years.
Return on equity is rising
ROE has improved from 0.6% to 10.4%.
Return on capital is rising
ROCE has improved from 5.6% to 11.4%.

🔴 What Needs Attention1

Debt is rising
Total debt is up 47% over 3 years — worth checking what it funded.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.6x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 47% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.0x to 1.6x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 18.8% to 21.4%. 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 76% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 5.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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

1EBITDA margin holds above 19%✓ 21.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.6x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.2% CAGR
Latest reported year was -12.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹5 Cr
Profit that never becomes cash eventually stops being profit.

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 · 7 neutral · 2 weak

Market Cap

₹31 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.8x

Fair

Fairly valued against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹5.43

Profitable

Profitable on a per-share basis

ROE

10.4%

Moderate

Moderate capital efficiency

ROCE

11.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.23x

Moderate

Moderate leverage

Revenue Growth (YoY)

-12.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

-39.6%

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 generative

Generates cash even after funding its capex

More Metrics

CMP

₹91.28

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.24

Comfortable

Healthy short-term liquidity

52W Range Position

31%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

90.6 / 97.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

53.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹27 Cr	₹18 Cr	₹36 Cr	₹32 Cr	+5.2%
EBITDA	₹5 Cr	₹3 Cr	₹6 Cr	₹7 Cr	+9.9%
EBITDA Margin	18.8%	14.4%	15.4%	21.4%	—
PAT (Net Profit)	₹0 Cr	-₹2 Cr	₹3 Cr	₹2 Cr	+181.3%
EPS	₹0.26	₹-4.67	₹9.58	₹5.78	+181.2%
ROE	0.6%	-11.6%	19.3%	10.4%	—
ROCE	5.6%	0.2%	18.1%	11.4%	—
Total Debt	₹16 Cr	₹15 Cr	₹14 Cr	₹23 Cr	+13.6%
Free Cash Flow	₹1 Cr	₹3 Cr	₹3 Cr	₹5 Cr	+110.3%

🟢 Revenue has grown at 5.2% a year over 3 years.

🟢 EBITDA has grown at 9.9% a year over 3 years.

🟢 EBITDA Margin has risen from 18.8% to 21.4% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 181.3% a year over 3 years.

🟢 EPS has grown at 181.2% a year over 3 years.

🟢 ROE has risen from 0.6% to 10.4% over 3 years (+9.8 pts).

🟢 ROCE has risen from 5.6% to 11.4% over 3 years (+5.7 pts).

🔴 Total Debt has grown at 13.6% a year over 3 years.

🟢 Free Cash Flow has grown at 110.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹45 Cr

Total Liabilities

₹26 Cr

Total Debt

₹23 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.8%

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

1 mixed1 negative4 general

Surbhi Industries sets Sep 29 for 34th AGM, e-voting dates

scanx.trade, 29 Sept

Surbhi Industries standalone net profit declines 25.00% in the June 2026 quarter

Business Standard, 28 JulResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Surbhi Ind Standalone June 2026 Net Sales at Rs 6.68 crore, down 18.37% Y-o-Y

Moneycontrol.com, 17 Sept

Compare with SURBHI IND.

Equitymaster, 09 Oct

Surbhi Industries Clarifies Share Price Movement to BSE, Cites Market-Driven Factors

scanx.trade, 19 Mar

Mukul Agrawal-backed PTC Industries shares slip 4% despite 466% surge in Q1 profit and 180% EBITDA growth

The Economic Times, 18 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-12.2%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟡Business QualityAdequate11.8/20

🟡Financial HealthAdequate10.3/20

🟡GrowthModest11.3/20

🟡ProfitabilityModerate8.5/15

🟡ValuationFair9.6/15

🔴RiskHigh2.3/10

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.

This thesis breaks if

✓EBITDA margin holds above 19%21.4%
✗Debt / EBITDA falls below 3x3.5x
✗Interest cover stays above 3x1.6x
✓Revenue growth stays above 4% a year5.2% CAGR
✓Free cash flow remains positive₹5 Cr