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Check Before You Invest : Active Clothing Co Ltd

BSE: 541144 NSE: ISIN: INE380Z01015
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Active Clothing Co Ltd belong to?
Active Clothing Co Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Active Clothing Co Ltd a good quality company?
Active Clothing Co 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 Active Clothing Co Ltd undervalued or overvalued?
Active Clothing Co 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 18.93 36.64
Price to Book 2.22 1.91
Price to Sales 0.61 0.57
EV to EBITDA 10.43 11.14
Q.4 Is Active Clothing Co Ltd a good buy now?
Active Clothing Co 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 Active Clothing Co Ltd?
Active Clothing Co Ltd revenue growth is 39.5% for FY-2025, which is above its 5-year CAGR of 14.89%, indicating faster growth.

Q.2 Gross Profit margin of Active Clothing Co Ltd?
Active Clothing Co Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.8% for FY-2025, which is above its 5-year median of 4.9%, indicating increasing margins.

Q.3 Operating Profit Margin of Active Clothing Co Ltd?
Active Clothing Co Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.29% for FY-2025, which is in line with its 5-year median of 9.29% indicating stable margins.

Q.4 Net Profit Margin of Active Clothing Co Ltd?
Active Clothing Co Ltd Net Profit Margin is 2.85% for FY-2025, is above its 5-year median of 1.13%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 5.8 4.9
Operating Profit Margin (%) 9.29 9.29
Net Profit Margin (%) 2.85 1.13

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Active Clothing Co Ltd?
Active Clothing Co Ltd Return on Asset is 3.38%, which is above its 5-year historical median of 1.4%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Active Clothing Co Ltd?
Active Clothing Co Ltd Return on capital employed is 11.74% for FY-2025, which is above its 5-year historical median of 7.55%. 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 Active Clothing Co Ltd?
Active Clothing Co Ltd Return on equity is 11.53% for FY-2025, which is above its 5-year historical median of 3.57%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Active Clothing Co Ltd?
Active Clothing Co Ltd Cash conversion cycle is 142 days, in line with its 5-year historical median of 146 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) 1.19 1.16
ROE (%) 11.53 3.57
ROCE (%) 11.74 7.55
Cash Conversion Cycle 142 days 146 days

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

Q.9 Debt to Equity ratio of Active Clothing Co Ltd?
Active Clothing Co Ltd Debt-to-Equity ratio is 1.61, 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 Active Clothing Co Ltd?
Active Clothing Co Ltd Debt to cash flow from operations is -12.02, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Active Clothing Co Ltd?

Q.1 Promoter shareholding and pledge status of Active Clothing Co Ltd?
Promoters hold 73.58% of the Active Clothing Co Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Active Clothing Co Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Active Clothing Co Ltd vs industry peers?
Active Clothing Co Ltd revenue CAGR is 14.89%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 39.5 -
Gross Profit Growth (%) 30.8 9.1
Operating Profit Growth (%) 33.3 8.5
Net Profit Growth (%) 60 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.19 0.95
ROE (%) 11.53 4.34
ROCE (%) 11.74 7.56
Cash Conversion Cycle (days) 142.11 101

Valuation & price assessment

Q.1 Stock return of Active Clothing Co Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 50.96% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 51% 45.5% 24.6%
Q.2 Valuation ratios of Active Clothing Co Ltd vs historical?
The current P/E ratio of 18.93 is lower than its historical median of 36.64, indicating that the stock is trading below 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 18.93 36.64 20.16
Price to Book 2.22 1.91 1.32
Price to Sales 0.61 0.57 1.06
EV to EBITDA 10.43 11.14 9.31

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