Zenith Exports Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹198.89+₹9.45 (+4.99%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is 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 Zenith Exports Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zenith Exports Limited engages in the leather goods and textile fabrics businesses for the fashion and home furnishing industries in India and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees185

Annual revenue₹62 Cr

How does it make money?

Turns over ₹62 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 185 employees supports ₹33.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin8.1%

Net margin3.7%

Revenue / employee₹33.5 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.

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 4.5% 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.

ROCE4.5%

ROE2.7%

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 +40% 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+40%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 2.7% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

30/ 100

Expensive

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

368.3x

3Y Median

67.5x

40 monthly readings · mean 183.3x · range 34.2x–578.0x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 446% above its 3y median of 67.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 432% above the peer median of 69.2x.

vs. its own history

Expensive

67.5x median over 40 months · +446%

vs. sector peers

Expensive

69.2x median of 4 peers · +432%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

368.3x

P/B

1.29x

EV/EBITDA

20.8x

PEG

27.98

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 5.5% to 8.1% over 3 years.
Debt is being paid down
Total debt is down 78% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Receivables growing faster than sales
Receivables are up 65% against revenue growth of 3% — customers are taking longer to pay.
Valuation above its historical average
At 368.3x the stock trades 446% above its own median of 67.5x.

Red Flags

2 items require attention · 2 high

🔴High leverageFinancial
Debt/Equity of 2.52x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 65% against revenue up 3% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 5.5% to 8.1%. 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 78% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 2.52x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 65% 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.
The price already assumes success
The stock trades 446% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 1.1% 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.
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.

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

1EBITDA margin holds above 6%✓ 8.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.1% CAGR
Latest reported year was -24.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 2 neutral · 5 weak

Market Cap

₹107 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

368.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.29x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.54

Profitable

Profitable on a per-share basis

ROE

2.7%

Weak

Weak capital efficiency

ROCE

4.5%

Weak

Low return on total capital employed

Debt/Equity

2.52x

High

High leverage

Revenue Growth (YoY)

-24.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

33.5%

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

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹198.89

Operating Margin

-12.2%

Weak

Thin margins leave little room for error

Net Margin

0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

5.90

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

193.7 / 203.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹60 Cr	₹82 Cr	₹69 Cr	₹62 Cr	+1.1%
EBITDA	₹3 Cr	₹3 Cr	-₹1 Cr	₹5 Cr	+15.0%
EBITDA Margin	5.5%	3.2%	-0.9%	8.1%	—
PAT (Net Profit)	₹2 Cr	₹0 Cr	₹2 Cr	₹2 Cr	+13.2%
EPS	₹2.92	₹0.56	₹3.17	₹4.24	+13.2%
ROE	2.0%	0.4%	2.1%	2.7%	—
ROCE	3.3%	1.9%	3.9%	4.5%	—
Total Debt	₹9 Cr	₹6 Cr	₹8 Cr	₹2 Cr	-39.3%
Free Cash Flow	₹19 Cr	-₹7 Cr	-₹6 Cr	₹4 Cr	-38.6%

🟡 Revenue has been broadly flat over 3 years (1.1% a year).

🟢 EBITDA has grown at 15.0% a year over 3 years.

🟢 EBITDA Margin has risen from 5.5% to 8.1% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 13.2% a year over 3 years.

🟢 EPS has grown at 13.2% a year over 3 years.

🟡 ROE has held roughly flat at 2.7% over 3 years.

🟢 ROCE has risen from 3.3% to 4.5% over 3 years (+1.3 pts).

🟢 Total Debt has shrunk at 39.3% a year over 3 years.

🔴 Free Cash Flow has shrunk at 38.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹98 Cr

Total Liabilities

₹14 Cr

Total Debt

₹2 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.5%

Corporate Actions

Ex-Dividend Date

24 Sept 2004

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

6 general

Compare with ZENITH EXPORTS

Equitymaster, 16 Oct

Zenith Exports Lower Circuit Today: Price, Data and Peers

Univest, 05 Oct

Zenith Exports Ltd. Peer Comparison – Compare with Others

Value Research, 27 Aug

Zenith Exports Declines 5% to ₹204.51; Textile Stock Tests Key Support - WMA Signal

siam.in, 17 Aug

Zenith Exports returns to profitability in FY26 with ₹229 lakh profit

scanx.trade, 29 May

FASCINATE Stock Price and Chart — NSE:FASCINATE

TradingView, 14 Aug

Watch Items

Revenue growth is negative (-24.6%) 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 QualityWeak7.5/20

🟢Financial HealthStrong14.5/20

🟡GrowthModest9.5/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding6.2/15

🔴RiskHigh3.3/10

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

This thesis breaks if

✓EBITDA margin holds above 6%8.1%
✗Revenue growth stays above 4% a year1.1% CAGR
✓Free cash flow remains positive₹4 Cr
✓Debt / EBITDA stays below 2x0.4x
✗ROCE stays above 8%4.5%