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Check Before You Invest : Zodiac Clothing Company Ltd

BSE: 521163 NSE: ZODIACLOTH ISIN: INE206B01013
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Zodiac Clothing Company Ltd belong to?
Zodiac Clothing Company Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Zodiac Clothing Company Ltd a good quality company?
Zodiac Clothing Company 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 Zodiac Clothing Company Ltd undervalued or overvalued?
Zodiac Clothing Company 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 - -
Price to Book 1.24 1.27
Price to Sales 1.27 1.88
EV to EBITDA -109.08 -28.13
Q.4 Is Zodiac Clothing Company Ltd a good buy now?
Zodiac Clothing Company Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd revenue growth is 20% for FY-2025, which is above its 5-year CAGR of -1.8%, indicating faster growth.

Q.2 Gross Profit margin of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Gross profit margin which is the profit after deduction of direct costs, is -8.2% for FY-2025, which is below its 5-year median of -3.7%, indicating decreasing margins.

Q.3 Operating Profit Margin of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -7.58% for FY-2025, which is above its 5-year median of -10.53% indicating increasing margins.

Q.4 Net Profit Margin of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Net Profit Margin is -23.31% for FY-2025, is in line with its 5-year median of -23.31%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -8.2 -3.7
Operating Profit Margin (%) -7.58 -10.53
Net Profit Margin (%) -23.31 -23.31

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Return on Asset is -11.37%, which is below its 5-year historical median of -5.78%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Return on capital employed is -10.22% for FY-2025, which is below its 5-year historical median of -4.8%. 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 Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Return on equity is -20.01% for FY-2025, which is below its 5-year historical median of -10.56%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Cash conversion cycle is 103 days, below its 5-year historical median of 140 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) 0.49 0.4
ROE (%) -20.01 -10.56
ROCE (%) -10.22 -4.8
Cash Conversion Cycle 103 days 140 days

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

Q.9 Debt to Equity ratio of Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Debt-to-Equity ratio is 0.26, 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 Zodiac Clothing Company Ltd?
Zodiac Clothing Company Ltd Debt to cash flow from operations is -4.01, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Zodiac Clothing Company Ltd?

Q.1 Promoter shareholding and pledge status of Zodiac Clothing Company Ltd?
Promoters hold 72.93% of the Zodiac Clothing Company Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Zodiac Clothing Company Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Zodiac Clothing Company Ltd vs industry peers?
Zodiac Clothing Company Ltd revenue CAGR is -1.80%, 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 (%) 20 -
Gross Profit Growth (%) 0 9.1
Operating Profit Growth (%) 0 8.5
Net Profit Growth (%) 0 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.49 0.95
ROE (%) -20.01 4.34
ROCE (%) -10.22 7.56
Cash Conversion Cycle (days) 103.48 101

Valuation & price assessment

Q.1 Stock return of Zodiac Clothing Company Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -10% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-10% -6.9% -8.2% -34.5%
Q.2 Valuation ratios of Zodiac Clothing Company Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , 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 - - 20.16
Price to Book 1.24 1.27 1.32
Price to Sales 1.27 1.88 1.06
EV to EBITDA -109.08 -28.13 9.31

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