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INVESTMENT INSIGHTS

Check Before You Invest : Iris Clothings Ltd

BSE: 0 NSE: IRISDOREME ISIN: INE01GN01025
  |   Sector:  Textiles & Apparels   |   Industry:  Textile

Snapshot

Q.1 Which industry/sub-sector does Iris Clothings Ltd belong to?
Iris Clothings Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile segment.
Q.2 Is Iris Clothings Ltd a good quality company?
Iris Clothings Ltd is a good quality company, based on a consistently good 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 Iris Clothings Ltd undervalued or overvalued?
Iris Clothings 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 49.9 46.25
Price to Book 5.25 7.44
Price to Sales 4.16 4.03
EV to EBITDA 27.1 22.71
Q.4 Is Iris Clothings Ltd a good buy now?
Iris Clothings Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Iris Clothings Ltd?
Iris Clothings Ltd revenue growth is 20% for FY-2025, which is in line with its 5-year CAGR of 19.22%, indicating stable growth.

Q.2 Gross Profit margin of Iris Clothings Ltd?
Iris Clothings Ltd Gross profit margin which is the profit after deduction of direct costs, is 16.5% for FY-2025, which is in line with its 5-year median of 16.5%, indicating stable margins.

Q.3 Operating Profit Margin of Iris Clothings Ltd?
Iris Clothings Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 19.13% for FY-2025, which is in line with its 5-year median of 19.08% indicating stable margins.

Q.4 Net Profit Margin of Iris Clothings Ltd?
Iris Clothings Ltd Net Profit Margin is 8.97% for FY-2025, is in line with its 5-year median of 8.97%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 16.5 16.5
Operating Profit Margin (%) 19.13 19.08
Net Profit Margin (%) 8.97 8.97

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Iris Clothings Ltd?
Iris Clothings Ltd Return on Asset is 9.13%, which is in line with its 5-year historical median of 9.13%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Iris Clothings Ltd?
Iris Clothings Ltd Return on capital employed is 19.71% for FY-2025, which is in line with its 5-year historical median of 20.12%. 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 Iris Clothings Ltd?
Iris Clothings Ltd Return on equity is 17.33% for FY-2025, which is below its 5-year historical median of 18.41%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Iris Clothings Ltd?
Iris Clothings Ltd Cash conversion cycle is 214 days, above its 5-year historical median of 169 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.02 1.12
ROE (%) 17.33 18.41
ROCE (%) 19.71 20.12
Cash Conversion Cycle 214 days 169 days

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

Q.9 Debt to Equity ratio of Iris Clothings Ltd?
Iris Clothings Ltd Debt-to-Equity ratio is 0.46, 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 Iris Clothings Ltd?
Iris Clothings Ltd Debt to cash flow from operations is 14.8, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Iris Clothings Ltd?

Q.1 Promoter shareholding and pledge status of Iris Clothings Ltd?
Promoters hold 61.17% of the Iris Clothings Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Iris Clothings Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Iris Clothings Ltd vs industry peers?
Iris Clothings Ltd revenue CAGR is 19.22%, 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 (%) 20 0
Gross Profit Growth (%) 4.4 9.1
Operating Profit Growth (%) 7.7 8.5
Net Profit Growth (%) 8.3 13
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.02 0.95
ROE (%) 17.33 4.25
ROCE (%) 19.71 7.55
Cash Conversion Cycle (days) 213.82 102

Valuation & price assessment

Q.1 Stock return of Iris Clothings Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of -20.95% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - -21% -52.9% -32.7%
Q.2 Valuation ratios of Iris Clothings Ltd vs historical?
The current P/E ratio of 49.9 is higher than its historical median of 46.25, 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 49.9 46.25 20.16
Price to Book 5.25 7.44 1.32
Price to Sales 4.16 4.03 1.06
EV to EBITDA 27.1 22.71 9.31

Check more companies

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5. Vedant Fashions
6. Swan Corp
7. Pearl Global Inds.
8. Alok Inds
9. Garware Tech. Fibres
10. Indo Count Inds

Check trending companies

1. Jupiter Wagons Ltd.
2. Cochin Shipyard Ltd.
3. Bharat Petroleum Corporation Ltd.
4. Zydus Lifesciences Ltd.
5. United Spirits Ltd.
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