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Check Before You Invest : Pasari Spinning Mills Ltd

BSE: 521080 NSE: ISIN: INE604F01010
  |   Sector:  Textiles & Apparels   |   Industry:  Textile - Spinning

Snapshot

Q.1 Which industry/sub-sector does Pasari Spinning Mills Ltd belong to?
Pasari Spinning Mills Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile - Spinning segment.
Q.2 Is Pasari Spinning Mills Ltd a good quality company?
Pasari Spinning 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 Pasari Spinning Mills Ltd undervalued or overvalued?
Pasari Spinning 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 25.76 24.19
Price to Book 28.76 -15.27
Price to Sales - -
EV to EBITDA 25.02 23.11
Q.4 Is Pasari Spinning Mills Ltd a good buy now?
Pasari Spinning 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 Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd revenue growth is % for FY-, which is below its 5-year CAGR of 1.54%, indicating slower growth.

Q.2 Gross Profit margin of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Gross profit margin which is the profit after deduction of direct costs, is 62.3% for FY-2025, which is in line with its 5-year median of 62.3%, indicating stable margins.

Q.3 Operating Profit Margin of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 62% for FY-2025, which is below its 5-year median of 71.81% indicating decreasing margins.

Q.4 Net Profit Margin of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Net Profit Margin is 53.38% for FY-2025, is in line with its 5-year median of 53.38%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 62.3 62.3
Operating Profit Margin (%) 62 71.81
Net Profit Margin (%) 53.38 53.38

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Return on Asset is 25.99%, which is above its 5-year historical median of 24.43%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Return on capital employed is 19.51% for FY-2025, which is above its 5-year historical median of 17.19%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Return on equity is 0% for FY-2025, which is below its 5-year historical median of 21.25%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Cash conversion cycle is 38 days, above its 5-year historical median of 33 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) 0.49 0.48
ROE (%) - 21.25
ROCE (%) 19.51 17.19
Cash Conversion Cycle 38 days 33 days

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

Q.9 Debt to Equity ratio of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Debt-to-Equity ratio is 32.92, which is above the industry average of 0.36, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Pasari Spinning Mills Ltd?
Pasari Spinning Mills Ltd Debt to cash flow from operations is 4.06, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Pasari Spinning Mills Ltd?

Q.1 Promoter shareholding and pledge status of Pasari Spinning Mills Ltd?
Promoters hold 53.06% of the Pasari Spinning Mills Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Pasari Spinning Mills Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Pasari Spinning Mills Ltd vs industry peers?
Pasari Spinning Mills Ltd revenue CAGR is 1.54%, compared to the industry median CAGR of 1.47%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) - 1.5
Gross Profit Growth (%) -14.3 1.8
Operating Profit Growth (%) -16 -1.5
Net Profit Growth (%) -16.3 2.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.49 0.94
ROE (%) - -
ROCE (%) 19.51 6.13
Cash Conversion Cycle (days) 37.82 61

Valuation & price assessment

Q.1 Stock return of Pasari Spinning Mills Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 24.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
24.1% 35.5% -3.3% -13.5%
Q.2 Valuation ratios of Pasari Spinning Mills Ltd vs historical?
The current P/E ratio of 25.76 is higher than its historical median of 24.19, 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 25.76 24.19 9.43
Price to Book 28.76 -15.27 0.72
Price to Sales - - 0.40
EV to EBITDA 25.02 23.11 7.20

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