Texel Industries Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹61.01−₹0.39 (−0.64%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Reasonable but unspectacular business quality, 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, 6:09 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 Texel Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Texel Industries Limited manufactures and sells geosynthetic textile products in India and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Annual revenue₹96 Cr

How does it make money?

Turns over ₹96 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation.

EBITDA margin12.7%

Net margin4.7%

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 9.4% 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.

ROCE9.4%

ROE10.5%

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 +0% while net margin moved -140% 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+0%

Margin effect-140%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

68/ 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

17.6x

1.3Y Median

19.8x

16 monthly readings · mean 19.5x · range 15.4x–26.2x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 11% below its 1.3y median of 19.8x. 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 75% below the peer median of 69.2x.

vs. its own history

Fair

19.8x median over 16 months · -11%

vs. sector peers

Cheap

69.2x median of 4 peers · -75%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

17.6x

P/B

—

EV/EBITDA

9.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -2.2% to 12.7% over 3 years.
Debt is being paid down
Total debt is down 22% over 3 years.
Return on equity is rising
ROE has improved from -48.9% to 10.5%.
Return on capital is rising
ROCE has improved from -15.0% to 9.4%.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 43% against revenue growth of 0% — stock may not be moving.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.9x — little room if earnings dip.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 43% against revenue up 0% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 60% 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 -2.2% to 12.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 22% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 75% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 0.1% 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.
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 11%✓ 12.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.9x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 0.1% CAGR
Latest reported year was -14.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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 · 6 neutral · 3 weak

Market Cap

₹86 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.6x

Fair

Fairly valued against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹3.47

Profitable

Profitable on a per-share basis

ROE

10.5%

Moderate

Moderate capital efficiency

ROCE

9.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.59x

Low

Conservative leverage

Revenue Growth (YoY)

-14.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-0.9%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹61.01

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

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

63.1 / 64.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹96 Cr	₹91 Cr	₹113 Cr	₹96 Cr	+0.1%
EBITDA	-₹2 Cr	₹1 Cr	₹9 Cr	₹12 Cr	—
EBITDA Margin	-2.2%	1.6%	7.6%	12.7%	—
PAT (Net Profit)	-₹11 Cr	-₹9 Cr	₹5 Cr	₹5 Cr	—
EPS	₹-13.41	₹-10.38	₹4.17	₹3.29	—
ROE	-48.9%	-61.3%	11.9%	10.5%	—
ROCE	-15.0%	-13.3%	14.4%	9.4%	—
Total Debt	₹33 Cr	₹24 Cr	₹19 Cr	₹26 Cr	-7.8%
Free Cash Flow	₹12 Cr	₹14 Cr	-₹9 Cr	-₹2 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.1% a year).

🟢 EBITDA has turned positive, from -₹2 Cr to ₹12 Cr.

🟢 EBITDA Margin has risen from -2.2% to 12.7% over 3 years (+14.9 pts).

🟢 PAT (Net Profit) has turned positive, from -₹11 Cr to ₹5 Cr.

🟢 EPS has turned positive, from ₹-13.41 to ₹3.29.

🟢 ROE has risen from -48.9% to 10.5% over 3 years (+59.4 pts).

🟢 ROCE has risen from -15.0% to 9.4% over 3 years (+24.4 pts).

🟢 Total Debt has shrunk at 7.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹12 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹106 Cr

Total Liabilities

₹63 Cr

Total Debt

₹26 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

54.9%

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

2 mixed1 negative3 general

Texel Industries Q1 FY27 Results: Revenue Rs 28 Cr, PAT Up 37%

Univest, 17 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Texel Industries FY26 Results: Revenue drops 17% to ₹100.96 crore

scanx.trade, 29 SeptResults

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

Mirza International reports consolidated net loss of Rs 13.22 crore in the March 2026 quarter

Business Standard, 30 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Texel Industries schedules AGM for Sep 29; appoints new director

scanx.trade, 07 Sept

TEXEL INDUSTRIES LTD. Share Price

Upstox, 23 Mar

Texel Industries Limited (526638) Company Information

Simply Wall Street, 14 Aug

Watch Items

Revenue growth is negative (-14.3%) 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 QualityAdequate9/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak7.6/20

🟡ProfitabilityModerate8.5/15

🟡ValuationFair9.6/15

🔴RiskHigh2.4/10

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 11%12.7%
✗Debt / EBITDA stays below 2x2.1x
✗Free cash flow remains positive-₹2 Cr
✗Interest cover stays above 3x1.9x
✗Revenue growth stays above 4% a year0.1% CAGR