At a Glance
Harish Textile Engineers Ltd is a micro-cap company making textile processing machinery, polyester staple fiber (recycled from PET bottles), and some niche non-woven fabric products. The stock is up from its ₹48 lows to ₹66, but FY25 saw a red flag audit, qualified opinions, debenture defaults, and a liquidity crunch. Should we call this sustainable innovation or textile turbulence?
1. 🎬 Intro: Promoter Holding Down, P/E Up – This Microcap Is Confusing AF
- ₹22 Cr market cap company with a P/E of 91.7. Yes, 91.
- Promoters once held 65.9%, now down to 48.1%. Exit route? You decide.
- Sales? Up just 9.56% over 5 years. Not exactly compounding brilliance.
- FY25 audit note? 👇 “Liquidity crunch. Rights issue cancelled. Negative working capital. Debenture default.”
Basically, Textile Titanic meets creative compliance.
2. 🧺 WTF Do They Even Do?
Harish Textile’s product bouquet:
- Textile Machinery – Sells finishing, drying, and coating machinery across India + exports to 25 countries (including UK).
- Regenerated Polyester Staple Fiber (RPSF) – Made from recycled PET bottles. ESG bros, assemble!
- Non-woven Fabrics – Supplies for hygiene, filtration, and auto interiors.
- Side Hustle – Trading in non-ferrous metals. Because why not?
They operate 3 segments but act like 13. Diversified? Maybe. Diluted? Definitely.
3. 💰 Financials: Profit? Barely. Margins? Rarely.
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 116 | 131 | 132 |
| Net Profit (₹ Cr) | -0.09 | -0.84 | 0.72 |
| EBITDA Margin | 6% | 4% | 4% |
| ROE | -0.71% (3Y avg) | 2.64% (FY25) |
- FY25 EPS is ₹0.72. Meaning a 91x P/E is based on hope.
- Margins dropped. Sales stagnated. Profits came and went like a summer internship.
4. 📊 Valuation: Cheap, Meh, or Crack?
- Current Price: ₹66
- Book Value: ₹26.6 → P/B = 2.48
- P/E: 91.7
- Market Cap to Sales: ~0.17x
🧮 Fair Value Range (based on 10x normalized earnings of ₹1–2 Cr, EV/Sales 0.5x–1x):
👉 ₹20 – ₹40 range seems rational unless profitability truly scales.
5. 🍲 What’s Cooking? (Besides Polyester)
- Q4FY25 was a rare positive: ₹1.52 Cr PAT – biggest in 3 years.
- Sales hit ₹32.7 Cr in Q4 but came with a qualified audit opinion. Ouch.
- FY25 Rights Issue was scrapped due to weak response.
- Debenture defaults acknowledged in auditor notes.
- No dividends since inception. Basically, a shareholder fast.
6. 💼 Balance Sheet: How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Borrowings | ₹32 Cr |
| Net Worth | ₹9 Cr |
| Debt/Equity | ~3.5x |
| Reserves | Just ₹6 Cr |
- Working Capital Days reduced from 42 to 25 – but that’s because there’s no capital left to work with.
- Negative WC. Debenture payables. Limited investor confidence.
7. 💸 Cash Flow – Sab Number Game Hai
| Metric | FY25 |
|---|---|
| CFO | ₹11 Cr |
| CFI | ₹-2 Cr |
| CFF | ₹-8 Cr |
- Decent operating cash in FY25 – finally.
- But it came with juggling interest payments, working capital cutbacks, and some accounting push.
- Overall: CFO relief, but not a full clean chit.
8. 📉 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 9.6% |
| ROE | 2.6% |
| OPM | 4% |
| Interest Coverage | <1.5x |
- ROCE <10% = meh.
- ROE <3% = why bother?
- Interest burden still looms large. Lenders probably sleep with one eye open.
9. 💸 P&L Breakdown – Show Me the Money
FY25
- Sales: ₹132 Cr
- COGS + Expenses: ₹127 Cr
- Operating Profit: ₹5 Cr
- Depreciation: ₹2 Cr
- Interest: ₹4 Cr
- Other Income: ₹1 Cr
- PAT: ₹0.72 Cr
TL;DR – They sold a lot, earned a little, and paid too much interest.
10. 🔍 Peer Comparison – Why P/E So High, Bro?
| Company | P/E | ROE | OPM | Sales (₹ Cr) | M.Cap (₹ Cr) |
|---|---|---|---|---|---|
| Harish Textile | 91.7 | 2.6% | 4% | 132 | ₹22 Cr |
| Tega Industries | 57 | 15.5% | 20.7% | 1,638 | ₹11,431 Cr |
| Syrma SGS | 63 | 10.2% | 8.6% | 3,787 | ₹10,926 Cr |
| Kaynes Tech | 137 | 11% | 15% | 2,721 | ₹40,239 Cr |
🧠 So… Harish has highest P/E among mid-tier industrial stocks, and lowest return ratios. 🙃
11. 👨👩👦 Shareholding, Promoters, and Friends
- Promoters: Down from 65.89% → 48.15% (since FY22)
- Public Holding: 51.8%
- No DII or FII interest (obviously).
Biggest red flag? 17.7% promoter holding drop with no major institutional interest = microcap roulette.
12. 🧃 Miscellaneous Masala
- Company makes products that sound ESG sexy (recycling PET bottles) – but margins don’t back it.
- ₹3 face value, ₹66 price = only market cap math is hot.
- 10-year sales CAGR = 23%, but almost all growth pre-COVID.
- No dividends. No buybacks. Just stories.
13. 🧑⚖️ EduInvesting Verdict™
Harish Textile is the kind of stock that looks “industrial, green, global exporter” on paper… but feels like a recycled idea with debt problems.
Unless margins scale up big time or machinery demand booms, the ₹66 price looks inflated vs real profit potential. If you’re holding this for ESG pride, at least ask for a reusable tote bag.
Fair Value Range = ₹20 – ₹40
🧠 Watchlist for traders who like turnaround thrillers. Long-term investors? You might want to recycle your expectations.
✍️ Written by Prashant | 📅 08 July 2025
Tags: Harish Textile Engineers, textile machinery, SME stocks, PET recycling, microcap analysis, EduInvesting, stock analysis India, industrial stocks, BSE stocks, textile sector
