Zenith Fibres Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹61.50+₹0.51 (+0.84%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by 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 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, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of Zenith Fibres Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zenith Fibres Limited manufactures and sells polypropylene (PP) staple fibres and PP yarn in India. It operates through Manmade Fibre and Renewable Energy segments. The company offers PP spun yarn; and generates electricity through wind turbines. It also exports its products.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees76

Annual revenue₹40 Cr

How does it make money?

Turns over ₹40 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 76 employees supports ₹52.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹52.5 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 6.4% 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.

Peer median ROE25.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -20% while net margin moved +29% 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-20%

Margin effect+29%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 7.3% a year
✗ Profit CAGR of only 1.0%

Quality vs. Valuation

Company Quality

44/ 100

Weak

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.

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

6.6x

3Y Median

11.7x

40 monthly readings · mean 14.6x · range 7.5x–25.4x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 44% below its 3y median of 11.7x. 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 90% below the peer median of 69.2x.

vs. its own history

Cheap

11.7x median over 40 months · -44%

vs. sector peers

Cheap

69.2x median of 4 peers · -90%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.4x

PEG

6.72

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 64% against revenue up -20% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 44% 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 90% 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?

Sales are being booked faster than collected
Receivables are up 64% against revenue up -20%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1EBITDA margin holds above 8%✓ 10.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 6.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 11.7x✓ 6.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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
✓ 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 · 3 neutral · 3 weak

Market Cap

₹24 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.6x

Cheap

Cheap against the generic band

P/B Ratio

0.39x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹9.34

Profitable

Profitable on a per-share basis

ROE

5.0%

Weak

Weak capital efficiency

ROCE

6.4%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

58.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

201.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.63%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

3.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

2.8%

Weak

Thin margins leave little room for error

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

11.28

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.15

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

59.5 / 56.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

63.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹50 Cr	₹34 Cr	₹52 Cr	₹40 Cr	-7.3%
EBITDA	₹5 Cr	₹3 Cr	₹3 Cr	₹4 Cr	-7.0%
EBITDA Margin	10.0%	7.6%	6.2%	10.1%	—
PAT (Net Profit)	₹3 Cr	₹1 Cr	₹2 Cr	₹3 Cr	+1.0%
EPS	₹7.2	₹3.34	₹4.57	₹7.41	+1.0%
ROE	5.2%	2.4%	3.2%	5.0%	—
ROCE	6.9%	3.1%	4.2%	6.4%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	—	—
Free Cash Flow	₹2 Cr	-₹2 Cr	-₹4 Cr	-₹4 Cr	—

🔴 Revenue has shrunk at 7.3% a year over 3 years.

🔴 EBITDA has shrunk at 7.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.1% over 3 years.

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.0% a year).

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

🟡 ROE has held roughly flat at 5.0% over 3 years.

🟡 ROCE has held roughly flat at 6.4% over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹63 Cr

Total Liabilities

₹4 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

57.2%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

22 Sept 2026

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

3 positive1 negative2 general

Zenith Fibres (BSE: 514266) Declares ₹1 Dividend, Adopts FY26 Accounts and Appoints New Directors at 37th AGM

Kalkine India, 29 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Daulat Securities standalone net profit rises 73.28% in the June 2026 quarter

Business Standard, 14 AugResults

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

Zenith Fibres declines 15% on buyback approval

Moneycontrol.com, 01 AprCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Zenith Fibres Limited (514266) Company Information

Simply Wall Street, 15 Nov

Royale Manor Hotels & Industries standalone net profit declines 13.81% in the March 2026 quarter

Business Standard, 30 MayResults

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

PARAMOUNT Stock Price and Chart — NSE:PARAMOUNT

TradingView, 09 Oct

Watch Items

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

StrongFinancial Health · Valuation

MiddlingBusiness Quality

WeakGrowth · Profitability · Risk

Points for each in the Score ↑

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

2 of 4 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑