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Check Before You Invest : Veejay Lakshmi Engineering Works Ltd

BSE: 522267 NSE: ISIN: INE466D01019
  |   Sector:  Textiles & Apparels   |   Industry:  Textile - Machinery

Snapshot

Q.1 Which industry/sub-sector does Veejay Lakshmi Engineering Works Ltd belong to?
Veejay Lakshmi Engineering Works Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile - Machinery segment.
Q.2 Is Veejay Lakshmi Engineering Works Ltd a good quality company?
Veejay Lakshmi Engineering Works 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 Veejay Lakshmi Engineering Works Ltd undervalued or overvalued?
Veejay Lakshmi Engineering Works 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 1.91 1.21
Price to Sales 0.25 0.34
EV to EBITDA -35.7 8.98
Q.4 Is Veejay Lakshmi Engineering Works Ltd a good buy now?
Veejay Lakshmi Engineering Works 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 Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd revenue growth is -8.5% for FY-2025, which is below its 5-year CAGR of 2.98%, indicating slower growth.

Q.2 Gross Profit margin of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Gross profit margin which is the profit after deduction of direct costs, is -1% for FY-2025, which is above its 5-year median of -1.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -1.77% for FY-2025, which is in line with its 5-year median of -1.77% indicating stable margins.

Q.4 Net Profit Margin of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Net Profit Margin is -4.16% for FY-2025, is above its 5-year median of -5.23%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -1 -1.1
Operating Profit Margin (%) -1.77 -1.77
Net Profit Margin (%) -4.16 -5.23

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Return on Asset is -5.56%, which is in line with its 5-year historical median of -5.56%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Return on capital employed is -1.54% for FY-2025, which is above its 5-year historical median of -2.4%. 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 Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Return on equity is -19.69% for FY-2025, which is in line with its 5-year historical median of -19.69%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Cash conversion cycle is 56 days, below its 5-year historical median of 93 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) 1.34 1.05
ROE (%) -19.69 -19.69
ROCE (%) -1.54 -2.4
Cash Conversion Cycle 56 days 93 days

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

Q.9 Debt to Equity ratio of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Debt-to-Equity ratio is 1.95, which is above the industry average of 0.00, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Veejay Lakshmi Engineering Works Ltd?
Veejay Lakshmi Engineering Works Ltd Debt to cash flow from operations is -13.38, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Veejay Lakshmi Engineering Works Ltd?

Q.1 Promoter shareholding and pledge status of Veejay Lakshmi Engineering Works Ltd?
Promoters hold 63.83% of the Veejay Lakshmi Engineering Works Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Veejay Lakshmi Engineering Works Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Veejay Lakshmi Engineering Works Ltd vs industry peers?
Veejay Lakshmi Engineering Works Ltd revenue CAGR is 2.98%, compared to the industry median CAGR of 5.58%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -8.5 5.6
Gross Profit Growth (%) 0 8.5
Operating Profit Growth (%) 0 41.9
Net Profit Growth (%) 0 32
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.34 0.9
ROE (%) -19.69 3.23
ROCE (%) -1.54 10.88
Cash Conversion Cycle (days) 55.8 79

Valuation & price assessment

Q.1 Valuation ratios of Veejay Lakshmi Engineering Works 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.2 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 - - 29.04
Price to Book 1.91 1.21 1.76
Price to Sales 0.25 0.34 2.25
EV to EBITDA -35.7 8.98 9.06
Q.3 Stock return of Veejay Lakshmi Engineering Works Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -1.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-1.9% -1.5% 1.3% -34.6%

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