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Check Before You Invest : Sutlej Textiles And Industries Ltd

BSE: 532782 NSE: SUTLEJTEX ISIN: INE645H01027
  |   Sector:  Textiles & Apparels   |   Industry:  Textile - Spinning

Snapshot

Q.1 Which industry/sub-sector does Sutlej Textiles And Industries Ltd belong to?
Sutlej Textiles And Industries Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile - Spinning segment.
Q.2 Is Sutlej Textiles And Industries Ltd a good quality company?
Sutlej Textiles And Industries Ltd is a average quality company, based on a somewhat consistent 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 Sutlej Textiles And Industries Ltd undervalued or overvalued?
Sutlej Textiles And Industries 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 0.75 0.84
Price to Sales 0.24 0.30
EV to EBITDA 21.38 23.98
Q.4 Is Sutlej Textiles And Industries Ltd a good buy now?
Sutlej Textiles And Industries 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 Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd revenue growth is -1% for FY-2025, which is below its 5-year CAGR of 2.07%, indicating slower growth.

Q.2 Gross Profit margin of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 0.1% for FY-2025, which is below its 5-year median of 5.2%, indicating decreasing margins.

Q.3 Operating Profit Margin of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 1.6% for FY-2025, which is below its 5-year median of 5.54% indicating decreasing margins.

Q.4 Net Profit Margin of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Net Profit Margin is -2.56% for FY-2025, is below its 5-year median of -0.19%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 0.1 5.2
Operating Profit Margin (%) 1.6 5.54
Net Profit Margin (%) -2.56 -0.19

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Return on Asset is -3.29%, which is below its 5-year historical median of -0.17%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Return on capital employed is -2.61% for FY-2025, which is below its 5-year historical median of 2.16%. 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 Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Return on equity is -7.37% for FY-2025, which is below its 5-year historical median of -0.38%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Cash conversion cycle is 96 days, below its 5-year historical median of 109 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) 1.29 1.27
ROE (%) -7.37 -0.38
ROCE (%) -2.61 2.16
Cash Conversion Cycle 96 days 109 days

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

Q.9 Debt to Equity ratio of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Debt-to-Equity ratio is 0.98, which is above the industry average of 0.36, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Sutlej Textiles And Industries Ltd?
Sutlej Textiles And Industries Ltd Debt to cash flow from operations is 13.27, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sutlej Textiles And Industries Ltd?

Q.1 Promoter shareholding and pledge status of Sutlej Textiles And Industries Ltd?
Promoters hold 63.96% of the Sutlej Textiles And Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sutlej Textiles And Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sutlej Textiles And Industries Ltd vs industry peers?
Sutlej Textiles And Industries Ltd revenue CAGR is 2.07%, 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 (%) -1 1.5
Gross Profit Growth (%) 0 1.8
Operating Profit Growth (%) 0 -1.5
Net Profit Growth (%) 0 2.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.29 0.94
ROE (%) -7.37 -
ROCE (%) -2.61 6.13
Cash Conversion Cycle (days) 96.45 61

Valuation & price assessment

Q.1 Stock return of Sutlej Textiles And Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -4.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-4.3% -6% -7% -11.4%
Q.2 Valuation ratios of Sutlej Textiles And Industries 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 - - 9.43
Price to Book 0.75 0.84 0.72
Price to Sales 0.24 0.30 0.40
EV to EBITDA 21.38 23.98 7.20

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