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Check Before You Invest : Texel Industries Ltd

BSE: 526638 NSE: ISIN: INE594V01028
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Texel Industries Ltd belong to?
Texel Industries Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Texel Industries Ltd a good quality company?
Texel 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 Texel Industries Ltd undervalued or overvalued?
Texel 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 10.04 -
Price to Book 2.05 2.03
Price to Sales 0.88 0.51
EV to EBITDA 5.92 9.67
Q.4 Is Texel Industries Ltd a good buy now?
Texel 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 Texel Industries Ltd?
Texel Industries Ltd revenue growth is 21.9% for FY-2025, which is above its 5-year CAGR of 3.91%, indicating faster growth.

Q.2 Gross Profit margin of Texel Industries Ltd?
Texel Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.9% for FY-2025, which is above its 5-year median of 3.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Texel Industries Ltd?
Texel Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.15% for FY-2025, which is above its 5-year median of 5.96% indicating increasing margins.

Q.4 Net Profit Margin of Texel Industries Ltd?
Texel Industries Ltd Net Profit Margin is 4.22% for FY-2025, is above its 5-year median of 1.42%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.9 3.5
Operating Profit Margin (%) 8.15 5.96
Net Profit Margin (%) 4.22 1.42

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Texel Industries Ltd?
Texel Industries Ltd Return on Asset is 4.84%, which is above its 5-year historical median of 1.42%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Texel Industries Ltd?
Texel Industries Ltd Return on capital employed is 24.43% for FY-2025, which is above its 5-year historical median of 11.71%. 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 Texel Industries Ltd?
Texel Industries Ltd Return on equity is 17.2% for FY-2025, which is above its 5-year historical median of 4.43%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Texel Industries Ltd?
Texel Industries Ltd Cash conversion cycle is 18 days, below its 5-year historical median of 21 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.15 1.01
ROE (%) 17.2 4.43
ROCE (%) 24.43 11.71
Cash Conversion Cycle 18 days 21 days

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

Q.9 Debt to Equity ratio of Texel Industries Ltd?
Texel Industries Ltd Debt-to-Equity ratio is 0.19, 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 Texel Industries Ltd?
Texel Industries Ltd Debt to cash flow from operations is -2.97, which is at a unhealthy level.

Ownership & governance

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

Q.1 Promoter shareholding and pledge status of Texel Industries Ltd?
Promoters hold 25.50% of the Texel Industries Ltd, with 30.78% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Texel Industries Ltd vs industry peers?
Texel Industries Ltd revenue CAGR is 3.91%, 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 (%) 21.9 0
Gross Profit Growth (%) 0 9.1
Operating Profit Growth (%) 350 8.5
Net Profit Growth (%) 0 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.15 0.95
ROE (%) 17.2 4.25
ROCE (%) 24.43 7.55
Cash Conversion Cycle (days) 17.65 102

Valuation & price assessment

Q.1 Stock return of Texel Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 60.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
60.6% 17.2% 25.2% -41.5%
Q.2 Valuation ratios of Texel Industries Ltd vs historical?
The current P/E ratio of 10.04 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 10.04 - 20.16
Price to Book 2.05 2.03 1.32
Price to Sales 0.88 0.51 1.06
EV to EBITDA 5.92 9.67 9.31

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