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INVESTMENT INSIGHTS

Check Before You Invest : Soma Textiles & Industries Ltd

BSE: 521034 NSE: SOMATEX ISIN: INE314C01013
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Soma Textiles & Industries Ltd belong to?
Soma Textiles & Industries Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Soma Textiles & Industries Ltd a good quality company?
Soma Textiles & Industries Ltd is a average quality company, based on a somewhat consistent 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 Soma Textiles & Industries Ltd undervalued or overvalued?
Soma Textiles & 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 74.64 0.52
Price to Book 2.38 0.91
Price to Sales 11.4 11.82
EV to EBITDA 1283.07 14.88
Q.4 Is Soma Textiles & Industries Ltd a good buy now?
Soma Textiles & 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.

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

Q.1 Revenue growth of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd revenue growth is 65.6% for FY-2025, which is above its 5-year CAGR of -18.17%, indicating faster growth.

Q.2 Gross Profit margin of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is -9.5% for FY-2025, which is above its 5-year median of -31.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -61.03% for FY-2025, which is in line with its 5-year median of -58.79% indicating stable margins.

Q.4 Net Profit Margin of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Net Profit Margin is 730.1% for FY-2025, is above its 5-year median of 368.31%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -9.5 -31.5
Operating Profit Margin (%) -61.03 -58.79
Net Profit Margin (%) 730.1 368.31

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Return on Asset is 54.63%, which is above its 5-year historical median of 23.86%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Return on capital employed is 54.58% for FY-2025, which is above its 5-year historical median of 28.18%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Cash conversion cycle of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Cash conversion cycle is 87 days, above its 5-year historical median of 61 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

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

Q.8 Debt to Equity ratio of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Debt-to-Equity ratio is 0.02, which is lower the industry average of 0.03, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Soma Textiles & Industries Ltd?
Soma Textiles & Industries Ltd Debt to cash flow from operations is -0.48, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Soma Textiles & Industries Ltd?

Q.1 Promoter shareholding and pledge status of Soma Textiles & Industries Ltd?
Promoters hold 80.60% of the Soma Textiles & Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Soma Textiles & Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Soma Textiles & Industries Ltd vs industry peers?
Soma Textiles & Industries Ltd revenue CAGR is -18.17%, compared to the industry median CAGR of 0%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 65.6 -
Gross Profit Growth (%) -150 17.9
Operating Profit Growth (%) 0 16.4
Net Profit Growth (%) 228.6 17.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.07 0.52
ROE (%) - 2.05
ROCE (%) 54.58 3.6
Cash Conversion Cycle (days) 86.88 46

Valuation & price assessment

Q.1 Stock return of Soma Textiles & Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 36.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 36.4% 84.9% 84.3% 177%
Q.2 Valuation ratios of Soma Textiles & Industries Ltd vs historical?
The current P/E ratio of 74.64 is higher than its historical median of 0.52, 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 74.64 0.52 33.62
Price to Book 2.38 0.91 1.57
Price to Sales 11.4 11.82 2.21
EV to EBITDA 1283.07 14.88 14.09

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