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Check Before You Invest : Avax Apparels And Ornaments Ltd

BSE: 544337 NSE: ISIN: INE0NQ401024
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Avax Apparels And Ornaments Ltd belong to?
Avax Apparels And Ornaments Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Avax Apparels And Ornaments Ltd a good quality company?
Avax Apparels And Ornaments 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 Avax Apparels And Ornaments Ltd undervalued or overvalued?
Avax Apparels And Ornaments 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 3-year
Historic Median
Price to Earnings 24.35 10.90
Price to Book 4.09 2.88
Price to Sales 1.16 0.61
EV to EBITDA 14.57 6.90
Q.4 Is Avax Apparels And Ornaments Ltd a good buy now?
Avax Apparels And Ornaments 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 Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd revenue growth is 55.8% for FY-2025, which is below its 3-year CAGR of 391.15%, indicating slower growth.

Q.2 Gross Profit margin of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.6% for FY-2025, which is in line with its 3-year median of 7.6%, indicating stable margins.

Q.3 Operating Profit Margin of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.75% for FY-2025, which is in line with its 3-year median of 7.75% indicating stable margins.

Q.4 Net Profit Margin of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Net Profit Margin is 4.75% for FY-2025, is in line with its 3-year median of 4.75%, indicating stable margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 7.6 7.6
Operating Profit Margin (%) 7.75 7.75
Net Profit Margin (%) 4.75 4.75

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Return on Asset is 23.15%, which is below its 3-year historical median of 33.27%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Return on capital employed is 43.8% for FY-2025, which is below its 3-year historical median of 71.45%. 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 Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Return on equity is 33.45% for FY-2025, which is below its 3-year historical median of 56.27%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Cash conversion cycle is 46 days, above its 3-year historical median of 35 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 4.88 5.31
ROE (%) 33.45 56.27
ROCE (%) 43.8 71.45
Cash Conversion Cycle 46 days 35 days

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

Q.9 Debt to Equity ratio of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Debt-to-Equity ratio is 0.10, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Avax Apparels And Ornaments Ltd?
Avax Apparels And Ornaments Ltd Debt to cash flow from operations is -1.17, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Avax Apparels And Ornaments Ltd?

Q.1 Promoter shareholding and pledge status of Avax Apparels And Ornaments Ltd?
Promoters hold 51.98% of the Avax Apparels And Ornaments Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Avax Apparels And Ornaments Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Avax Apparels And Ornaments Ltd vs industry peers?
Avax Apparels And Ornaments Ltd revenue CAGR is 391.15%, compared to the industry median CAGR of 4.99%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 55.8 5
Gross Profit Growth (%) 28.1 17.6
Operating Profit Growth (%) 26.7 21.1
Net Profit Growth (%) 18.1 19
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 4.88 0.66
ROE (%) 33.45 2.9
ROCE (%) 43.8 4.31
Cash Conversion Cycle (days) 46.04 49

Valuation & price assessment

Q.1 Stock return of Avax Apparels And Ornaments Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 171.75% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 171.8%
Q.2 Valuation ratios of Avax Apparels And Ornaments Ltd vs historical?
The current P/E ratio of 24.35 is higher than its historical median of 10.90, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 24.35 10.90 35.02
Price to Book 4.09 2.88 1.68
Price to Sales 1.16 0.61 2.16
EV to EBITDA 14.57 6.90 15.51

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