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INVESTMENT INSIGHTS

Check Before You Invest : Mafatlal Industries Ltd

BSE: 500264 NSE: MAFATIND ISIN: INE270B01035
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Mafatlal Industries Ltd belong to?
Mafatlal Industries Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Mafatlal Industries Ltd a good quality company?
Mafatlal 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 Mafatlal Industries Ltd undervalued or overvalued?
Mafatlal 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 5-year
Historic Median
Price to Earnings 10.09 9.99
Price to Book 1.19 1.03
Price to Sales 0.24 0.33
EV to EBITDA 5.78 7.48
Q.4 Is Mafatlal Industries Ltd a good buy now?
Mafatlal Industries Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Mafatlal Industries Ltd?
Mafatlal Industries Ltd revenue growth is 35.1% for FY-2025, which is above its 5-year CAGR of 22.8%, indicating faster growth.

Q.2 Gross Profit margin of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.4% for FY-2025, which is below its 5-year median of 4.1%, indicating decreasing margins.

Q.3 Operating Profit Margin of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.41% for FY-2025, which is above its 5-year median of 2% indicating increasing margins.

Q.4 Net Profit Margin of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Net Profit Margin is 3.5% for FY-2025, is above its 5-year median of 2.93%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3.4 4.1
Operating Profit Margin (%) 2.41 2
Net Profit Margin (%) 3.5 2.93

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Return on Asset is 5.81%, which is above its 5-year historical median of 2.84%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Return on capital employed is 10.02% for FY-2025, which is above its 5-year historical median of 7.7%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Return on equity is 12.65% for FY-2025, which is above its 5-year historical median of 5.78%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Cash conversion cycle is 3 days, above its 5-year historical median of -2 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.66 1.04
ROE (%) 12.65 5.78
ROCE (%) 10.02 7.7
Cash Conversion Cycle 3 days -2 days

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

Q.9 Debt to Equity ratio of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Debt-to-Equity ratio is 0.09, which is lower the industry average of 0.42, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Mafatlal Industries Ltd?
Mafatlal Industries Ltd Debt to cash flow from operations is -0.77, which is at a unhealthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Mafatlal Industries Ltd?
Promoters hold 69.32% of the Mafatlal Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Mafatlal Industries Ltd vs industry peers?
Mafatlal Industries Ltd revenue CAGR is 22.80%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 35.1 -
Gross Profit Growth (%) 2.1 9.1
Operating Profit Growth (%) 54.6 8.5
Net Profit Growth (%) -1 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.66 0.95
ROE (%) 12.65 4.34
ROCE (%) 10.02 7.56
Cash Conversion Cycle (days) 3.36 101

Valuation & price assessment

Q.1 Stock return of Mafatlal Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 6.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 6.6% 42.2% 34.2% -1.2%
Q.2 Valuation ratios of Mafatlal Industries Ltd vs historical?
The current P/E ratio of 10.09 is in line with than its historical median of 9.99, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 10.09 9.99 20.16
Price to Book 1.19 1.03 1.32
Price to Sales 0.24 0.33 1.06
EV to EBITDA 5.78 7.48 9.31

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