Tuni Textile Mills Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹1.98−₹0.04 (−1.98%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, 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, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Tuni Textile Mills Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tuni Textile Mills Limited manufactures and sells synthetic, blended, and cotton fabrics for the apparel industry in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees48

Annual revenue₹115 Cr

How does it make money?

Turns over ₹115 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 48 employees supports ₹2.39 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.6%

Net margin0.5%

Revenue / employee₹2.39 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?Some evidence

ROCE of 24.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE24.1%

ROE4.0%

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 +167% while net margin moved -11% 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+167%

Margin effect-11%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.97x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.25 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 1.6x — little room if profits dip
✗ Debt has grown 42.2% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

48/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

33.0x

3Y Median

57.6x

40 monthly readings · mean 57.2x · range 14.1x–104.5x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 43% below its 3y median of 57.6x. 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 52% below the peer median of 69.2x.

vs. its own history

Cheap

57.6x median over 40 months · -43%

vs. sector peers

Cheap

69.2x median of 4 peers · -52%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

33.0x

P/B

1.75x

EV/EBITDA

14.7x

PEG

0.99

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Return on capital is rising
ROCE has improved from 9.3% to 24.1%.
High return on capital employed
ROCE of 24.1% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 33.0x the stock trades 43% below its own median of 57.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 188% 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 · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 188% over 3 years, from ₹10 Cr to ₹29 Cr.
🔴High leverageFinancial
Debt/Equity of 1.97x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.6x — 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.
🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.1% 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.
Priced below its own history
The stock trades 43% 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 52% 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?

The debt load needs earnings to hold up
Debt is 7.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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

1Revenue growth stays above 29% a year✓ 38.7% CAGR
Latest reported year was 2.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 7.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹10 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

₹32 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

33.0x

Fair

Fairly valued against the generic band

P/B Ratio

1.75x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.06

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

24.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.97x

High

High leverage

Revenue Growth (YoY)

2.9%

Modest

Modest growth

Profit Growth (YoY)

0.0%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1.98

Operating Margin

4.1%

Weak

Thin margins leave little room for error

Net Margin

0.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.20

Defensive

Steadier than the market

52W Range Position

80%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2.0 / 1.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

61.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹43 Cr	₹56 Cr	₹76 Cr	₹115 Cr	+38.7%
EBITDA	₹1 Cr	₹2 Cr	₹3 Cr	₹4 Cr	+44.2%
EBITDA Margin	3.2%	3.8%	3.4%	3.6%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹1 Cr	₹1 Cr	+33.3%
EPS	₹0.02	₹0.03	₹0.04	₹0.07	+51.8%
ROE	2.0%	2.4%	4.0%	4.0%	—
ROCE	9.3%	12.1%	16.9%	24.1%	—
Total Debt	₹10 Cr	₹13 Cr	₹17 Cr	₹29 Cr	+42.2%
Free Cash Flow	₹1 Cr	-₹1 Cr	-₹1 Cr	-₹10 Cr	—

🟢 Revenue has grown at 38.7% a year over 3 years.

🟢 EBITDA has grown at 44.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.6% over 3 years.

🟢 PAT (Net Profit) has grown at 33.3% a year over 3 years.

🟢 EPS has grown at 51.8% a year over 3 years.

🟢 ROE has risen from 2.0% to 4.0% over 3 years (+2.1 pts).

🟢 ROCE has risen from 9.3% to 24.1% over 3 years (+14.9 pts).

🔴 Total Debt has grown at 42.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹72 Cr

Total Liabilities

₹57 Cr

Total Debt

₹29 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

26.4%

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 positive4 general

Tuni Textile Mills Gets ₹301.73 Crore Textile Orders; Shares At ₹1.66

HDFC Sky, 23 Sept

Tuni Textile Mills Ltd. - RE Share Price Live Today

CNBC TV18, 14 Oct

Tuni Textile Q2FY27 Results: Net profit up 114% YoY to ₹1.66 lakh

scanx.trade, 16 OctResults

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

Tuni Textile Mills Upper Circuit Streak: Day 2 Price and Data

Univest, 06 Oct

Tuni Textile Mills Rights Issue 2026 Date, Price, Allotment, Ratio

IPO Watch, 30 Sept

Penny stock under ₹10: Textile stock hits 5% upper circuit on multiple order wins; Sept gains reach 106%

Livemint, 23 SeptOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🔴Financial HealthStretched6/20

🟡GrowthModest12.9/20

🔴ProfitabilityWeak4.5/15

🟡ValuationFair9.5/15

🔴RiskHigh4/10

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

This thesis breaks if

✓Revenue growth stays above 29% a year38.7% CAGR
✓EBITDA margin holds above 2%3.6%
✗Debt / EBITDA falls below 3x7.1x
✗Free cash flow remains positive-₹10 Cr
✗Interest cover stays above 3x1.6x