Zodiac Clothing Company Limited

Consumer Cyclical — Apparel Manufacturing · NSE

₹65.12−₹0.59 (−0.90%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 Zodiac Clothing Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zodiac Clothing Company Limited manufactures, retails, and trades men's clothing and accessories in India and internationally.

IndustryApparel Manufacturing

SectorConsumer Cyclical

Employees968

Annual revenue₹156 Cr

How does it make money?

Turns over ₹156 Cr a year. Of every ₹100 of sales, about ₹-22 reaches shareholders as profit, with ₹-1 left at the operating level before interest, tax and depreciation. Each of its 968 employees supports ₹16.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin-0.9%

Net margin-22.4%

Revenue / employee₹16.2 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 -10.4% 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.

ROCE-10.4%

ROE-19.3%

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 -7% while net margin moved -337% 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-7%

Margin effect-337%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 25.0 points over the period

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

36/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

0.94x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 67% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 5.7% to -19.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.4% to -10.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 67% over 3 years, from ₹64 Cr to ₹107 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only -2.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹35 Cr in the latest reported year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from 5.7% to -19.3%. 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
3 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 -3%✓ -0.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -2.3x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹5 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -10.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 3 neutral · 5 weak

Market Cap

₹179 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.94x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-13.21

Loss-making

Negative earnings per share — the business is losing money

ROE

-19.3%

Weak

Weak capital efficiency

ROCE

-10.4%

Weak

Low return on total capital employed

Debt/Equity

0.59x

Low

Conservative leverage

Revenue Growth (YoY)

-14.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

5.8%

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

₹5 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹65.12

Operating Margin

-27.9%

Weak

Thin margins leave little room for error

Net Margin

-22.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.10

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

15%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

67.7 / 71.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹169 Cr	₹141 Cr	₹169 Cr	₹156 Cr	-2.6%
EBITDA	-₹1 Cr	-₹12 Cr	-₹9 Cr	-₹1 Cr	—
EBITDA Margin	-0.8%	-8.3%	-5.1%	-0.9%	—
PAT (Net Profit)	₹16 Cr	-₹36 Cr	-₹37 Cr	-₹35 Cr	—
EPS	₹6.42	₹-13.99	₹-14.31	₹-13.33	—
ROE	5.7%	-14.8%	-18.1%	-19.3%	—
ROCE	7.4%	-10.3%	-11.5%	-10.4%	—
Total Debt	₹64 Cr	₹86 Cr	₹94 Cr	₹107 Cr	+18.5%
Free Cash Flow	-₹4 Cr	-₹18 Cr	-₹18 Cr	₹5 Cr	—

🔴 Revenue has shrunk at 2.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at -0.9% over 3 years.

🔴 PAT (Net Profit) has turned negative, from ₹16 Cr to -₹35 Cr.

🔴 EPS has turned negative, from ₹6.42 to ₹-13.33.

🔴 ROE has fallen from 5.7% to -19.3% over 3 years (-25.0 pts).

🔴 ROCE has fallen from 7.4% to -10.4% over 3 years (-17.7 pts).

🔴 Total Debt has grown at 18.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹4 Cr to ₹5 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹342 Cr

Total Liabilities

₹160 Cr

Total Debt

₹107 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹9 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.5%

Corporate Actions

Ex-Dividend Date

25 Jul 2019

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

Zodiac Clothing Company vs Nifty 50: 1Y Return -33.63% vs -11.35%

Univest, 13 Oct

Zodiac Clothing Company Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Zodiac Clothing Company Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Zodiac Clothing adopts FY26 financials at 42nd AGM

scanx.trade, 30 Sept

Why Is Zodiac Clothing Company Share Price Falling Key Reasons 2026

Univest, 07 JulPrice 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.

India’s ‘Warren Buffett’ has held 5 stocks for 10 years. They’re now worth Rs 3,659 Cr

The Financial Express, 28 Aug

Watch Items

Revenue growth is negative (-14.8%) 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 QualityWeak4.7/20

🟡Financial HealthAdequate10.7/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak2.5/15

🟡ValuationFair7.1/15

🔴RiskHigh4.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -3%-0.9%
✗Interest cover stays above 3x-2.3x
✓Free cash flow remains positive₹5 Cr
✗ROCE stays above 8%-10.4%