Check Before You Invest : Karnika Industries Ltd

Q: Which industry/sub-sector does Karnika Industries Ltd belong to?

Karnika Industries Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.

Q: Is Karnika Industries Ltd a good quality company?

Karnika Industries Ltd is a weak quality company, based on a inconsistent multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Karnika Industries Ltd undervalued or overvalued?

Karnika Industries Ltd appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 31.81, Historic Median: 40.39. Price to Book, Current: 8.92, Historic Median: 7.93. Price to Sales, Current: 3.78, Historic Median: 3.15. EV to EBITDA, Current: 21.08, Historic Median: 25.21

Q: Is Karnika Industries Ltd a good buy now?

Karnika Industries Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Gross Profit margin of Karnika Industries Ltd?

Karnika Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.7% for FY-2025, which is above its 3-year median of 11.3%, indicating increasing margins.

Q: Operating Profit Margin of Karnika Industries Ltd?

Karnika Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.13% for FY-2025, which is above its 3-year median of 14.21% indicating increasing margins.

Q: Net Profit Margin of Karnika Industries Ltd?

Karnika Industries Ltd Net Profit Margin is 10.45% for FY-2025, is above its 3-year median of 7.94%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 14.7, Historic Median: 11.3. Operating Profit Margin (%), Current: 15.13, Historic Median: 14.21. Net Profit Margin (%), Current: 10.45, Historic Median: 7.94

Q: Return on Asset of Karnika Industries Ltd?

Karnika Industries Ltd Return on Asset is 13.15%, which is above its 3-year historical median of 9.29%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Karnika Industries Ltd?

Karnika Industries Ltd Return on capital employed is 24.29% for FY-2025, which is in line with its 3-year historical median of 23.14%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q: Return on Equity (ROE) of Karnika Industries Ltd?

Karnika Industries Ltd Return on equity is 29.05% for FY-2025, which is in line with its 3-year historical median of 29.05%, indicating the business is making similar use of its shareholders capital.

Check Before You Invest : Karnika Industries Ltd

Snapshot

Q.1 Which industry/sub-sector does Karnika Industries Ltd belong to?

Karnika Industries Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.

Q.2 Is Karnika Industries Ltd a good quality company?

Karnika Industries Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Karnika Industries Ltd undervalued or overvalued?

Karnika Industries Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	3-year Historic Median
Price to Earnings	31.81	40.39
Price to Book	8.92	7.93
Price to Sales	3.78	3.15
EV to EBITDA	21.08	25.21

Q.4 Is Karnika Industries Ltd a good buy now?

Karnika Industries Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

Q.1 Gross Profit margin of Karnika Industries Ltd?

Karnika Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 14.7% for FY-2025, which is above its 3-year median of 11.3%, indicating increasing margins.

Q.2 Operating Profit Margin of Karnika Industries Ltd?

Karnika Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.13% for FY-2025, which is above its 3-year median of 14.21% indicating increasing margins.

Q.3 Net Profit Margin of Karnika Industries Ltd?

Karnika Industries Ltd Net Profit Margin is 10.45% for FY-2025, is above its 3-year median of 7.94%, indicating increasing margins.

	Current Level	3-year Historic Median
Gross Profit Margin (%)	14.7	11.3
Operating Profit Margin (%)	15.13	14.21
Net Profit Margin (%)	10.45	7.94

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Karnika Industries Ltd?

Karnika Industries Ltd Return on Asset is 13.15%, which is above its 3-year historical median of 9.29%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Karnika Industries Ltd?

Karnika Industries Ltd Return on capital employed is 24.29% for FY-2025, which is in line with its 3-year historical median of 23.14%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Karnika Industries Ltd?

Karnika Industries Ltd Return on equity is 29.05% for FY-2025, which is in line with its 3-year historical median of 29.05%, indicating the business is making similar use of its shareholders capital.

C: How much debt does the business have and is it at a sustainable level?

Q.7 Debt to Equity ratio of Karnika Industries Ltd?

Karnika Industries Ltd Debt-to-Equity ratio is 0.85, which is above the industry average of 0.42, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Karnika Industries Ltd?

Karnika Industries Ltd Debt to cash flow from operations is 14.53, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Karnika Industries Ltd?

Q.1 Promoter shareholding and pledge status of Karnika Industries Ltd?

Promoters hold 73.39% of the Karnika Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Karnika Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Karnika Industries Ltd vs industry peers?

Karnika Industries Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 1.04%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	3-year Industry Median
Revenue Growth (%)	-	1
Gross Profit Growth (%)	78.6	6.9
Operating Profit Growth (%)	44.4	6.3
Net Profit Growth (%)	80	10

Operating Efficiency

	Current Level	3-year Industry Median
Asset Turnover (x)	1.26	0.97
ROE (%)	29.05	5.2
ROCE (%)	24.29	7.53
Cash Conversion Cycle (days)	192.04	101

Valuation & price assessment

Q.1 Stock return of Karnika Industries Ltd over the last decade?

Over the last 1 year(s), the stock has delivered a CAGR of -80% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-80%

Q.2 Valuation ratios of Karnika Industries Ltd vs historical?

The current P/E ratio of 31.81 is lower than its historical median of 40.39, indicating that the stock is trading below its historical average valuation.

Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?

Valuation Ratios	Current	3-year Historic Median	3-year Industry Median
Price to Earnings	31.81	40.39	21.85
Price to Book	8.92	7.93	1.39
Price to Sales	3.78	3.15	1.29
EV to EBITDA	21.08	25.21	10.21

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Check Before You Invest : Karnika Industries Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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Check trending companies

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