🟢 1. At a Glance
Pearl Global Industries Ltd is a ₹6,958 Cr smallcap garment exporter that’s quietly stitched together 55% profit CAGR over 5 years. With ROE at 22.5%, OPMs now at 9%, and sales compounding at 22%, the company seems to be wearing its fundamentals well. But with promoter holding dropping and a 31.6x P/E, is this fashion play haute couture or hot potato?
👗 2. Hook – “Export King with Desi DNA?”
You’ve heard of wearing your heart on your sleeve. Pearl Global wears Zara’s margins on its collar.
This desi company isn’t making reels, it’s making Ralph Lauren shirts. It supplies to global fashion retailers across continents. Think design-to-delivery, all under one umbrella. Sales have jumped from ₹1,500 Cr to ₹4,500 Cr in 5 years.
But here’s the twist: while your jeans got tighter, their operating margins widened. ROCE has gone from 12% to 22%. What’s cooking in this Bangladesh-to-Bhiwandi export machine?
🧵 3. WTF Do They Even Do?
Pearl Global is a full-stack garment exporter focused on:
- 👕 Women’s wear, Men’s wear & Kidswear
- 🧵 Products: Knits, Woven, Bottoms
- 🌎 Clients: Top global fashion brands (names undisclosed, but think Zara/H&M/Walmart-type scale)
- 🌐 Footprint: India, Bangladesh, Indonesia, Vietnam, Jordan
- 🧑🎨 Capabilities: Product design, sampling, manufacturing, compliance, and supply chain management
This is not a local Kurti-maker. This is fashion BPO at scale. Think of it as Wipro for Wardrobes.
💰 4. Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,491 | 2,714 | 3,158 | 3,436 | 4,506 |
| Net Profit (₹ Cr) | 17 | 70 | 153 | 169 | 231 |
| OPM (%) | 4% | 6% | 9% | 9% | 9% |
| ROCE (%) | 5% | 12% | 19% | 21% | 22% |
| ROE (%) | 4% | 15% | 23% | 22% | 23% |
| EPS (₹) | 3.99 | 15.74 | 34.47 | 40.11 | 54.06 |
🧠 TL;DR:
- Sales tripled in 5 years
- Profits 10x’d
- Margins stable at 9%
- ROE and ROCE now sexy AF
📊 5. Valuation – Cheap, Meh, or Crack?
| Valuation Metric | Value |
|---|---|
| P/E | 31.6x |
| P/B | 6x |
| Price/Sales | 1.54x |
| Market Cap | ₹6,958 Cr |
| PEG Ratio | ~0.6 (based on 5Y profit CAGR) |
🧪 Fair Value Range Calculation (EduInvesting Rulebook):
Let’s assume normalized EPS growth of 20% going ahead (conservative).
- FY25 EPS = ₹54.06
- At 20x → ₹1,081 (lower bound)
- At 30x → ₹1,621 (upper bound)
🎯 FV Range: ₹1,080–₹1,620
Current Price: ₹1,512
Verdict: Close to upper band. Margin of safety? Tailor it yourself.
🔥 6. What’s Cooking – News, Triggers, Drama
- 👔 Acquisitions: Stake buy in PT Pinnacle (Indonesia) & Pearl GT Holdco – scaling operations
- 🔄 Rejig: New COO + Director reshuffle in FY25
- 🔄 QIP of ₹149.5 Cr raised for expansion – a rarity in this space
- 🇧🇩 Bangladesh Plant Disruptions: Temporary closures due to political unrest
- 🧶 New unit in Bangladesh: Pearl Knitting & Dyeing Industries set up in 2025
🎤 Concall Mood: “Our diversified global footprint insulates us from region-specific risks.” – Management, May 2025
🏦 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹23 Cr |
| Reserves | ₹1,133 Cr |
| Borrowings | ₹773 Cr |
| D/E Ratio | ~0.65x |
| Total Assets | ₹2,595 Cr |
🧠 TL;DR:
- Leverage is rising slightly (QIP → debt reduction cushion?)
- Net worth has nearly doubled in 3 years
- No red flags, but no “debt-free” badge either
💵 8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net |
|---|---|---|---|---|
| 2023 | ₹365 | -₹26 | -₹200 | ₹139 |
| 2024 | ₹352 | -₹128 | -₹152 | ₹72 |
| 2025 | ₹176 | -₹104 | ₹101 | ₹174 |
🧠 Cash from operations is decent, but capex + working capital absorption is high. Still, not a cash-burning machine.
📈 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 22.1% |
| ROE | 22.5% |
| Inventory Days | 108 |
| Debtor Days | 26 |
| Cash Conversion Cycle | 49 days |
| Interest Coverage | ~3.5x |
🧠 This is as clean as an exporter can get in this industry.
💸 10. P&L Breakdown – Show Me the Money
- Operating leverage is kicking in as sales scale
- FY25 EBITDA ~₹417 Cr on ₹4,506 Cr revenue → 9.3% margin
- Net margins are 5%+ (rare for an exporter)
- Employee & manufacturing expenses still largest cost heads
🧵 11. Peer Comparison – Who Else Is in the Game?
| Company | P/E | ROCE | OPM | Rev (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|---|---|---|
| Page Industries | 74x | 59% | 21.5% | 4,935 | 729 |
| Arvind Ltd | 25x | 12.5% | 10.2% | 8,329 | 353 |
| Gokaldas Exports | 42x | 11.7% | 9.6% | 3,864 | 158 |
| Kitex Garments | 43x | 10.2% | 20.4% | 983 | 135 |
| Pearl Global | 32x | 22.1% | 9.3% | 4,506 | 231 |
🧠 Pearl beats peers on:
- ROCE
- Growth
- Global diversification
But is still behind Page in brand power and moat.
🧑💼 12. Miscellaneous – Shareholding, Promoters
| Group | Jun 2022 | Mar 2025 |
|---|---|---|
| Promoters | 66.58% → 62.81% 🔻 | |
| FIIs | 5.59% → 7.39% 🔼 | |
| DIIs | 1.45% → 11.56% 🚀 | |
| Public | 26.37% → 18.24% 🔻 |
📌 Takeaway:
- Promoters trimmed stake (QIP dilution?)
- Domestic institutions clearly bullish
🧑💼 KMP Highlights:
- CEO: Deepak Kumar Seth (Chairman & MD)
- COO (Newly appointed): 2025 board reshuffle
🧑⚖️ 13. EduInvesting Verdict™
Pearl Global is the exporter that stitched its way from “meh” to multibagger – quietly, efficiently, globally. It’s not building a consumer brand like Page, but it’s become the backend muscle of global fashion. ROCEs are elite, growth is real, and operations are diversified.
That said:
- P/E > 30 = premium pricing
- Promoter stake falling = eyebrow raiser
- Bangladesh exposure = geopolitical risk
But if India ever had a Foxconn for fashion, Pearl might be it.
🎯 Fair Value Range: ₹1,080–₹1,620
✍️ Written by Prashant | 📅 09 July 2025
Tags: Pearl Global, textile exporters, fashion manufacturing, ROCE, Page Industries, apparel, smallcap stocks, EduInvesting, garment sector, QIP
