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Check Before You Invest : Parmeshwari Silk Mills Ltd

BSE: 540467 NSE: ISIN: INE808R01012
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Parmeshwari Silk Mills Ltd belong to?
Parmeshwari Silk Mills Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Parmeshwari Silk Mills Ltd a good quality company?
Parmeshwari Silk Mills Ltd is a quality company, based on a 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 Parmeshwari Silk Mills Ltd undervalued or overvalued?
Parmeshwari Silk Mills 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 3.97 -
Price to Book 0.55 -
Price to Sales 0.14 -
EV to EBITDA 6.68 -
Q.4 Is Parmeshwari Silk Mills Ltd a good buy now?
Parmeshwari Silk Mills 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 Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd revenue growth is 12.4% for FY-2025, which is above its 5-year CAGR of 9.73%, indicating faster growth.

Q.2 Gross Profit margin of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.2% for FY-2025, which is in line with its 5-year median of 6%, indicating stable margins.

Q.3 Operating Profit Margin of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.95% for FY-2025, which is in line with its 5-year median of 9.84% indicating stable margins.

Q.4 Net Profit Margin of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Net Profit Margin is 3.31% for FY-2025, is above its 5-year median of 2.94%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 6.2 6
Operating Profit Margin (%) 9.95 9.84
Net Profit Margin (%) 3.31 2.94

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Return on Asset is 3.63%, which is above its 5-year historical median of 3.25%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Return on capital employed is 11.8% for FY-2025, which is above its 5-year historical median of 10.98%. 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 Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Return on equity is 15.18% for FY-2025, which is above its 5-year historical median of 13.82%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Cash conversion cycle is 166 days, in line with its 5-year historical median of 166 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.1 1.1
ROE (%) 15.18 13.82
ROCE (%) 11.8 10.98
Cash Conversion Cycle 166 days 166 days

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

Q.9 Debt to Equity ratio of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Debt-to-Equity ratio is 2.10, which is above the industry average of 0.42, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Parmeshwari Silk Mills Ltd?
Parmeshwari Silk Mills Ltd Debt to cash flow from operations is 9.05, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Parmeshwari Silk Mills Ltd?

Q.1 Promoter shareholding and pledge status of Parmeshwari Silk Mills Ltd?
Promoters hold 60.17% of the Parmeshwari Silk Mills Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Parmeshwari Silk Mills Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Parmeshwari Silk Mills Ltd vs industry peers?
Parmeshwari Silk Mills Ltd revenue CAGR is 9.73%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 12.4 0
Gross Profit Growth (%) 22.6 9.1
Operating Profit Growth (%) 19.8 8.5
Net Profit Growth (%) 26.9 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.1 0.95
ROE (%) 15.18 4.25
ROCE (%) 11.8 7.55
Cash Conversion Cycle (days) 166.12 102

Valuation & price assessment

Q.1 Stock return of Parmeshwari Silk Mills Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 408.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 408.1%
Q.2 Valuation ratios of Parmeshwari Silk Mills Ltd vs historical?
The current P/E ratio of 3.97 is higher than its historical median of , indicating that the stock is trading above 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 3.97 - 20.16
Price to Book 0.55 - 1.32
Price to Sales 0.14 - 1.06
EV to EBITDA 6.68 - 9.31

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