Suraj Industries Ltd

Consumer Defensive — Food Distribution · BSE

₹56.53−₹0.28 (−0.49%)

DalalBaazaar Score

30 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by moderate debt load, 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, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Suraj Industries Ltd, together with its subsidiary, engages in alcoholic beverages and trading businesses in India. The company operates in two segments, Edible Oil Operations and Liquor Operations.

IndustryFood Distribution

SectorConsumer Defensive

Annual revenue₹39 Cr

How does it make money?

Turns over ₹39 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC 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?Little sign of one

Returns on capital of 1.0% 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 ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -42% while net margin moved -113% 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-42%

Margin effect-113%

DalalBaazaar Score

30/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 16.5% a year
✗ Profit fell 113.5% in the latest year

Quality vs. Valuation

Company Quality

26/ 100

Weak

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

Valuation

60/ 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

29.8x

3Y Median

28.6x

40 monthly readings · mean 27.5x · range 13.0x–43.4x

Sector Median

43.3x

median of 4 sector peers

🟡Currently trading close to its 3y median of 28.6x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 31% below the peer median of 43.3x.

vs. its own history

Fair

28.6x median over 40 months · +4%

vs. sector peers

Cheap

43.3x median of 4 peers · -31%

vs. generic bands

Fair

15x–35x

EV/EBITDA

59.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from 16.9% to 19.1% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 19.1% to -0.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.5% to 1.0% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 5 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1440% over 3 years, from ₹11 Cr to ₹175 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.7x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹1 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 698% against revenue up -42% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 9.1x to 0.7x.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 553% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.9% to 19.1%. 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 31% 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 23.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 19.1% to -0.4%. 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
5 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

1EBITDA margin holds above 17%✓ 19.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 23.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹115 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 0.7x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 1.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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 · 5 neutral · 4 weak

Market Cap

₹273 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.8x

Fair

Fairly valued against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹1.9

Profitable

Profitable on a per-share basis

ROE

-0.4%

Weak

Weak capital efficiency

ROCE

1.0%

Weak

Low return on total capital employed

Debt/Equity

1.20x

Moderate

Moderate leverage

Revenue Growth (YoY)

50.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-113.5%

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

-₹115 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

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

1.13

Adequate

Adequate, but no real cushion

52W Range Position

58%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

56.0 / 57.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹67 Cr	₹50 Cr	₹26 Cr	₹39 Cr	-16.5%
EBITDA	₹11 Cr	₹7 Cr	₹5 Cr	₹7 Cr	-13.0%
EBITDA Margin	16.9%	14.5%	17.7%	19.1%	—
PAT (Net Profit)	₹7 Cr	₹4 Cr	₹4 Cr	-₹1 Cr	—
EPS	₹5.43	₹2.12	₹1.8	₹-0.31	—
ROE	19.1%	9.1%	5.7%	-0.4%	—
ROCE	15.5%	8.0%	2.3%	1.0%	—
Total Debt	₹11 Cr	₹11 Cr	₹86 Cr	₹175 Cr	+148.8%
Free Cash Flow	—	-₹14 Cr	-₹101 Cr	-₹115 Cr	—

🔴 Revenue has shrunk at 16.5% a year over 3 years.

🔴 EBITDA has shrunk at 13.0% a year over 3 years.

🟢 EBITDA Margin has risen from 16.9% to 19.1% over 3 years (+2.2 pts).

🔴 PAT (Net Profit) has turned negative, from ₹7 Cr to -₹1 Cr.

🔴 EPS has turned negative, from ₹5.43 to ₹-0.31.

🔴 ROE has fallen from 19.1% to -0.4% over 3 years (-19.5 pts).

🔴 ROCE has fallen from 15.5% to 1.0% over 3 years (-14.5 pts).

🔴 Total Debt has grown at 148.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹342 Cr

Total Liabilities

₹193 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹112 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.5%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

6 general

Suraj Industries Ltd Partly Paid-up Share Price

Business Today, 15 Oct

Suraj Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Compare GREENLINE TE with

Equitymaster, 14 Oct

Suraj Industries acquires VRV Foods stake for ₹50 lakh via preferential allotment

scanx.trade, 28 Sept

Suraj Industries Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 31 Aug

Compare with

Equitymaster, 08 Oct

Watch Items

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

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

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. 5 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑