Swadeshi Industries & Leasing Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹74.44−₹1.77 (−2.32%)

DalalBaazaar Score

48 / 100

🟡 Moderate

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, 6:02 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 Swadeshi Industries & Leasing Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Swadeshi Industries & Leasing Limited trades in various and incidental activities products in India. The company also manufactures and supplies preservative-free grocery products; copper; and supplying of preservative free food and waterless dyeing processes for textiles.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees6

Annual revenue₹68 Cr

How does it make money?

Turns over ₹68 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 6 employees supports ₹11.41 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.8%

Net margin2.5%

Revenue / employee₹11.41 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 9.7% 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.

ROCE9.7%

ROE8.3%

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 +9313% while net margin moved -118% 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+9313%

Margin effect-118%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 85.6x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 89.5x
✗ P/B of 7.99x is a steep premium to book

Quality vs. Valuation

Company Quality

52/ 100

Average

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

Valuation

34/ 100

Expensive

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

85.6x

1.3Y Median

89.5x

16 monthly readings · mean 93.1x · range 51.9x–146.2x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 1.3y median of 89.5x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 24% above the peer median of 69.2x.

vs. its own history

Fair

89.5x median over 16 months · -4%

vs. sector peers

Expensive

69.2x median of 4 peers · +24%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

85.6x

P/B

7.99x

EV/EBITDA

64.9x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -13.8% to 3.8% over 3 years.
Return on equity is rising
ROE has improved from -1.2% to 8.3%.
Return on capital is rising
ROCE has improved from -1.2% to 9.7%.

🔴 What Needs Attention2

Debt is rising
Total debt is up 7414% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 7414% over 3 years, from ₹0 Cr to ₹1 Cr.
🔴High leverageFinancial
Debt/Equity of 3.19x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 114% 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 -13.8% to 3.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 3.19x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 24% above the peer median. That premium needs a reason that persists, or it closes.
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.
Several serious flags at once
4 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

1Revenue growth stays above 266% a year✓ 354.9% CAGR
Latest reported year was 85.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹9 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 9.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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 · 4 neutral · 5 weak

Market Cap

₹172 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

85.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.99x

Rich

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

EPS (TTM)

₹0.87

Profitable

Profitable on a per-share basis

ROE

8.3%

Moderate

Moderate capital efficiency

ROCE

9.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

3.19x

High

High leverage

Revenue Growth (YoY)

85.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-91.8%

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

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹74.44

Operating Margin

4.1%

Weak

Thin margins leave little room for error

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.07

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

76.0 / 78.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹2 Cr	₹17 Cr	₹68 Cr	+354.9%
EBITDA	-₹0 Cr	-₹0 Cr	₹1 Cr	₹3 Cr	—
EBITDA Margin	-13.8%	-2.7%	4.2%	3.8%	—
PAT (Net Profit)	-₹0 Cr	-₹0 Cr	₹1 Cr	₹2 Cr	—
EPS	₹-0.09	₹-0.06	₹1.03	₹0.85	—
ROE	-1.2%	-0.8%	12.4%	8.3%	—
ROCE	-1.2%	-0.8%	14.4%	9.7%	—
Total Debt	₹0 Cr	—	₹0 Cr	₹1 Cr	+322.0%
Free Cash Flow	-₹1 Cr	-₹0 Cr	-₹4 Cr	-₹9 Cr	—

🟢 Revenue has grown at 354.9% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹3 Cr.

🟢 EBITDA Margin has risen from -13.8% to 3.8% over 3 years (+17.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹2 Cr.

🟢 EPS has turned positive, from ₹-0.09 to ₹0.85.

🟢 ROE has risen from -1.2% to 8.3% over 3 years (+9.5 pts).

🟢 ROCE has risen from -1.2% to 9.7% over 3 years (+11.0 pts).

🔴 Total Debt has grown at 322.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹38 Cr

Total Liabilities

₹15 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

-₹6 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.1%

Corporate Actions

Ex-Dividend Date

21 Aug 1995

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 positive5 general

Swadeshi Industries & Leasing (SWADEIN) Share Price near 52-week low as stock slips 6.44%

Univest, 07 Oct

SWADESHI INDUSTRIES LEASING CO Share Price

Upstox, 05 May

Swadeshi Industries & Leasing Ltd. Peer Comparison – Compare with Others

Value Research, 03 Sept

Swadeshi Industries Converts 1.23 Crore Convertible Warrants Into Equity Shares

scanx.trade, 05 Mar

Swadeshi Industries & Leasing Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Swadeshi Industries posts 328% revenue surge in FY26; sets Sept 15 AGM

scanx.trade, 22 AugResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak8.7/20

🟡Financial HealthAdequate9.9/20

🟢GrowthStrong13/20

🟡ProfitabilityModerate7.1/15

🔴ValuationDemanding5.3/15

🔴RiskHigh3.7/10

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

This thesis breaks if

✓Revenue growth stays above 266% a year354.9% CAGR
✓EBITDA margin holds above 2%3.8%
✗Free cash flow remains positive-₹9 Cr
✓Debt / EBITDA stays below 2x0.3x
✓ROCE stays above 8%9.7%