Vishal Fabrics Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹16.91−₹0.20 (−1.17%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:07 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 Vishal Fabrics Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Vishal Fabrics Limited engages in the dyeing, printing, and processing of denims and various fabrics in India and internationally. The company manufactures, markets, distributes, and sells various textile products, such as dyed yarn, denim fabrics.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees440

Annual revenue₹1,582 Cr

How does it make money?

Turns over ₹1,582 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 440 employees supports ₹3.60 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin6.2%

Net margin2.3%

Revenue / employee₹3.60 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 9.4% 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%

ROE5.5%

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 +3% while net margin moved -35% 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+3%

Margin effect-35%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 9.4% is below 10% — capital is not working hard
✗ ROCE has fallen by 8.2 points — returns are eroding
✗ EBITDA margin of 6.2% is thin — little cushion if costs rise
✗ Net margin of 2.1% is slim
• Revenue has compounded at 1.0% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

87/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.2x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 84% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -84%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.2x

P/B

0.65x

EV/EBITDA

6.6x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 29% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 8.2% to 6.2% over 3 years.
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 13.5% to 5.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.6% to 9.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 42% against revenue growth of 3% — customers are taking longer to pay.

Red Flags

6 items require attention · 1 high · 5 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 33% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.0 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 42% against revenue up 3% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 25% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 29% 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 84% 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?

Margins are being competed away
EBITDA margin has fallen from 8.2% to 6.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 42% against revenue up 3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 1.0% 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.
Returns on shareholder capital are falling
ROE has dropped from 13.5% to 5.5%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 6.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 1.0% CAGR
Latest reported year was -4.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 10 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

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹419 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.2x

Cheap

Cheap against the generic band

P/B Ratio

0.65x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.51

Profitable

Profitable on a per-share basis

ROE

5.5%

Weak

Weak capital efficiency

ROCE

9.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

-4.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

-32.6%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹16.91

Operating Margin

5.1%

Average

Average margins

Net Margin

2.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.66

Defensive

Steadier than the market

52W Range Position

15%

Near low

Near its 52-week low

Technical Snapshot

RSI (14)

33.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,534 Cr	₹1,431 Cr	₹1,503 Cr	₹1,582 Cr	+1.0%
EBITDA	₹126 Cr	₹92 Cr	₹104 Cr	₹98 Cr	-8.2%
EBITDA Margin	8.2%	6.4%	6.9%	6.2%	—
PAT (Net Profit)	₹53 Cr	₹21 Cr	₹29 Cr	₹36 Cr	-12.3%
ROE	13.5%	5.1%	6.1%	5.5%	—
ROCE	17.6%	10.3%	12.0%	9.4%	—
Total Debt	₹317 Cr	₹381 Cr	₹292 Cr	₹225 Cr	-10.8%
Free Cash Flow	₹64 Cr	-₹9 Cr	₹97 Cr	-₹1 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.0% a year).

🔴 EBITDA has shrunk at 8.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.2% to 6.2% over 3 years (-2.0 pts).

🔴 PAT (Net Profit) has shrunk at 12.3% a year over 3 years.

🔴 ROE has fallen from 13.5% to 5.5% over 3 years (-8.0 pts).

🔴 ROCE has fallen from 17.6% to 9.4% over 3 years (-8.2 pts).

🟢 Total Debt has shrunk at 10.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹64 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,024 Cr

Total Liabilities

₹377 Cr

Total Debt

₹225 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.6%

Corporate Actions

Ex-Dividend Date

05 Aug 2021

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 mixed5 general

DCM Nouvelle vs Nahar Industrial Enterprises vs Vishal Fabrics

Univest, 16 Oct

Vishal Fabrics (VISHAL) Share/Stock Price Live, NSE

TechGraph, 08 Oct

SEBI bans Vishal Fabrics promoters for 4 years, imposes penalty

scanx.trade, 01 Jul

Vishal Fabrics Ltd (NSE: VISHAL) Business Overview and Financial Snapshot

Kalkine India, 10 Sept

Compare with

Equitymaster, 09 Oct

Vishal Fabrics Q1 FY27 Results Preview

Univest, 09 JulResults

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

Watch Items

Revenue growth is negative (-4.6%) 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.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟢Financial HealthStrong13.8/20

🔴GrowthWeak5.9/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive13/15

🔴RiskHigh4.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%6.2%
✗Debt / EBITDA stays below 2x2.3x
✗Free cash flow remains positive-₹1 Cr
✗Interest cover stays above 3x2.9x
✗Revenue growth stays above 4% a year1.0% CAGR