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Check Before You Invest : Aditya Spinners Ltd

BSE: 521141 NSE: ADITYASPIN ISIN: INE122D01026
  |   Sector:  Textiles & Apparels   |   Industry:  Textile - Spinning

Snapshot

Q.1 Which industry/sub-sector does Aditya Spinners Ltd belong to?
Aditya Spinners Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile - Spinning segment.
Q.2 Is Aditya Spinners Ltd a good quality company?
Aditya Spinners 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 Aditya Spinners Ltd undervalued or overvalued?
Aditya Spinners 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 - 8.14
Price to Book 0.56 0.87
Price to Sales 0.4 0.55
EV to EBITDA 17.32 8.93
Q.4 Is Aditya Spinners Ltd a good buy now?
Aditya Spinners 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 Aditya Spinners Ltd?
Aditya Spinners Ltd revenue growth is 0.7% for FY-2025, which is below its 5-year CAGR of 1.61%, indicating slower growth.

Q.2 Gross Profit margin of Aditya Spinners Ltd?
Aditya Spinners Ltd Gross profit margin which is the profit after deduction of direct costs, is 0.7% for FY-2025, which is below its 5-year median of 7.3%, indicating decreasing margins.

Q.3 Operating Profit Margin of Aditya Spinners Ltd?
Aditya Spinners Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.37% for FY-2025, which is below its 5-year median of 7.85% indicating decreasing margins.

Q.4 Net Profit Margin of Aditya Spinners Ltd?
Aditya Spinners Ltd Net Profit Margin is -2.96% for FY-2025, is below its 5-year median of 3.03%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 0.7 7.3
Operating Profit Margin (%) 2.37 7.85
Net Profit Margin (%) -2.96 3.03

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Aditya Spinners Ltd?
Aditya Spinners Ltd Return on Asset is -2.75%, which is below its 5-year historical median of 2.64%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Aditya Spinners Ltd?
Aditya Spinners Ltd Return on capital employed is -1.17% for FY-2025, which is below its 5-year historical median of 5.26%. 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 Aditya Spinners Ltd?
Aditya Spinners Ltd Return on equity is -3.81% for FY-2025, which is below its 5-year historical median of 3.87%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Aditya Spinners Ltd?
Aditya Spinners Ltd Cash conversion cycle is 42 days, in line with its 5-year historical median of 40 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) 0.93 0.93
ROE (%) -3.81 3.87
ROCE (%) -1.17 5.26
Cash Conversion Cycle 42 days 40 days

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

Q.9 Debt to Equity ratio of Aditya Spinners Ltd?
Aditya Spinners Ltd Debt-to-Equity ratio is 0.31, which is lower the industry average of 0.36, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Aditya Spinners Ltd?
Aditya Spinners Ltd Debt to cash flow from operations is 8.97, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Aditya Spinners Ltd?

Q.1 Promoter shareholding and pledge status of Aditya Spinners Ltd?
Promoters hold 66.37% of the Aditya Spinners Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Aditya Spinners Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Aditya Spinners Ltd vs industry peers?
Aditya Spinners Ltd revenue CAGR is 1.61%, compared to the industry median CAGR of 1.47%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 0.7 1.5
Gross Profit Growth (%) -89.7 1.8
Operating Profit Growth (%) -66.7 -1.5
Net Profit Growth (%) -198.4 2.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.93 0.94
ROE (%) -3.81 -
ROCE (%) -1.17 6.13
Cash Conversion Cycle (days) 41.6 61

Valuation & price assessment

Q.1 Stock return of Aditya Spinners Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 11.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
11.7% 10.7% -8.4% -28%
Q.2 Valuation ratios of Aditya Spinners Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 8.14, 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 - 8.14 9.43
Price to Book 0.56 0.87 0.72
Price to Sales 0.4 0.55 0.40
EV to EBITDA 17.32 8.93 7.20

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