Thomas Scott (India) Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹273.00−₹4.50 (−1.62%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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. 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

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 Thomas Scott (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Thomas Scott (India) Limited manufactures and trades in textile and textile related products in India. The company offers formal and casual wear, as well as semiformal wear, such as casual business shirts, jackets, ethnic wear, trousers, and other related products.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees1,825

Annual revenue₹255 Cr

How does it make money?

Turns over ₹255 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,825 employees supports ₹14.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin13.3%

Net margin7.6%

Revenue / employee₹14.0 lakh

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?Some evidence

ROCE of 21.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE21.3%

ROE14.1%

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 +306% while net margin moved +65% 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+306%

Margin effect+65%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.21 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

65/ 100

Good

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

Valuation

77/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

18.8x

3Y Median

27.5x

40 monthly readings · mean 30.6x · range 14.8x–64.3x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 27.5x. 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 73% below the peer median of 69.2x.

vs. its own history

Cheap

27.5x median over 40 months · -32%

vs. sector peers

Cheap

69.2x median of 4 peers · -73%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

18.8x

P/B

2.83x

EV/EBITDA

13.3x

PEG

0.21

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 7.9% to 13.3% over 3 years.
Return on capital is rising
ROCE has improved from 13.0% to 21.3%.
High return on capital employed
ROCE of 21.3% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 18.8x the stock trades 32% below its own median of 27.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 85% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 20.1% to 14.1% — each rupee of shareholder capital earns less than it did.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 85% over 3 years, from ₹25 Cr to ₹46 Cr.
🔴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.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 131% 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 21.3% 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 7.9% to 13.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 73% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from 20.1% to 14.1%. 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.
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
2 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 45% a year✓ 59.5% CAGR
Latest reported year was 22.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹35 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 21.3%
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 · 5 neutral · 1 weak

Market Cap

₹406 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.8x

Fair

Fairly valued against the generic band

P/B Ratio

2.83x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹14.52

Profitable

Profitable on a per-share basis

ROE

14.1%

Moderate

Moderate capital efficiency

ROCE

21.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.34x

Low

Conservative leverage

Revenue Growth (YoY)

22.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

48.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹35 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹273

Operating Margin

12.0%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

2.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

22%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

261.6 / 273.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

59.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹63 Cr	₹91 Cr	₹161 Cr	₹255 Cr	+59.5%
EBITDA	₹5 Cr	₹14 Cr	₹20 Cr	₹34 Cr	+89.8%
EBITDA Margin	7.9%	15.1%	12.5%	13.3%	—
PAT (Net Profit)	₹3 Cr	₹10 Cr	₹13 Cr	₹19 Cr	+88.6%
EPS	₹5.22	₹12.58	₹11.57	₹13.34	+36.7%
ROE	20.1%	19.8%	12.1%	14.1%	—
ROCE	13.0%	22.5%	16.4%	21.3%	—
Total Debt	₹25 Cr	₹6 Cr	₹13 Cr	₹46 Cr	+22.8%
Free Cash Flow	-₹22 Cr	-₹13 Cr	-₹45 Cr	-₹35 Cr	—

🟢 Revenue has grown at 59.5% a year over 3 years.

🟢 EBITDA has grown at 89.8% a year over 3 years.

🟢 EBITDA Margin has risen from 7.9% to 13.3% over 3 years (+5.4 pts).

🟢 PAT (Net Profit) has grown at 88.6% a year over 3 years.

🟢 EPS has grown at 36.7% a year over 3 years.

🔴 ROE has fallen from 20.1% to 14.1% over 3 years (-6.0 pts).

🟢 ROCE has risen from 13.0% to 21.3% over 3 years (+8.2 pts).

🔴 Total Debt has grown at 22.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹238 Cr

Total Liabilities

₹100 Cr

Total Debt

₹46 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹27 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.5%

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 mixed4 general

Should You Be Adding Thomas Scott (India) (NSE:THOMASCOTT) To Your Watchlist Today?

Simply Wall Street, 01 Oct

Thomas Scott (India) Share Price Update After Sharp Decline

Univest, 05 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Thomas Scott India Ltd is Rated Sell

MarketsMojo, 15 Oct

Thomas Scott (India) Reports Q1 Revenue Of ₹65.8 Crore, Net Profit At ₹5.4 Crore

Sahi, 14 AugResults

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

Compare Thomas Scott with

Equitymaster, 28 Sept

Thomas Scott India adopts FY26 financials at 16th AGM

scanx.trade, 29 Sept

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong13/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive10.7/15

🔴RiskHigh4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 45% a year59.5% CAGR
✓EBITDA margin holds above 11%13.3%
✗Free cash flow remains positive-₹35 Cr
✓Debt / EBITDA stays below 2x1.4x
✓ROCE stays above 18%21.3%