At a Glance
UPGL is in the business of spinning, weaving, and yelling “grey fabric sabse sasta!” across Gujarat. The company posted ₹602 Cr revenue in FY25 with a 198% profit jump, a 20% ROE, and a stock price that’s surged 137% in one year. But wait – with P/E at 28x and no dividends, is it denim glory or a polyester bubble?
1. 🧵 Introduction – Spinning Profits or Spinning Stories?
- Started in 2010, listed on NSE Emerge. Core business? Manufacturing and trading of woven fabrics and yarn.
- They specialize in gray denim and cotton fabric, which sounds dull… until you realize it’s the backbone of the ₹1,000 jeans you wear.
- The entire business operates out of Gujarat, which could be either operational discipline or geographical risk. You decide.
📈 FY25 Net Profit: ₹18 Cr
📦 FY25 Revenue: ₹602 Cr
🧠 That’s a Net Margin of ~3%, better than many struggling textile peers.
2. 👕 WTF Do They Even Do?
- 🏭 Core Operations:
- Spinning yarn 🧵
- Weaving grey denim, grey fabric
- Some contract manufacturing
- 🛒 Also trades in:
- Raw yarn
- Woven fabric
- 📍 Entire business = Gujarat-centric. They eat, sleep, dye and ship from one state.
🎯 Low-profile B2B supplier — you won’t see them on Myntra or Instagram.
3. 📊 Financials – Profit, Margins, ROE, Growth
| Metric | FY24 | FY25 |
|---|---|---|
| Revenue | ₹908 Cr | ₹602 Cr |
| Net Profit | ₹7 Cr | ₹18 Cr |
| ROE | 14% | 20% |
| ROCE | 14.7% | 15% |
| EPS | ₹0.29 | ₹0.77 |
| OPM | 3.4% | 7.1% |
🧠 Despite a drop in revenue, profits almost tripled. Margin expansion suggests either cost efficiency or better pricing power.
4. 📈 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹21.6 |
| P/E | 28x |
| Book Value | ₹4.24 |
| P/B | 5.1x |
| Market Cap | ₹496 Cr |
🧮 Fair Value Range (based on ₹0.77 EPS and 15–20x P/E)
→ ₹11.5 – ₹15.4
🐂 Bullish dream (25x): ₹19
😐 CMP of ₹21.6 = fully priced — bordering on optimism.
5. 🧻 What’s Cooking – News, Triggers, Drama
- 📈 Promoter Holding up from 45.5% → 51.5%
- 📉 Public holding down — less operator noise?
- 👩💼 New CS appointed (July 2025)
- 📄 Clean FY25 results, no red flags
- 🎯 ROE of 20%, which is chef’s kiss in the textile sector
🎭 But… no dividends, P/E rich, and Gujarat concentration remains a risk.
6. 📊 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity | ₹23 Cr |
| Reserves | ₹74 Cr |
| Borrowings | ₹118 Cr |
| Other Liabilities | ₹30 Cr |
| Total Assets | ₹246 Cr |
| Fixed Assets | ₹94 Cr |
🔍 Decent balance sheet.
💣 Borrowings are 5x equity — but manageable due to improving cash flow and profit.
7. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY24 | ₹2 Cr | -₹21 Cr | ₹12 Cr | -₹7 Cr |
| FY25 | ₹19 Cr | -₹3 Cr | -₹17 Cr | ₹0 Cr |
🧠 Strong CFO in FY25 = healthy operational discipline
⚠️ Previous year’s investing outflow shows expansion. This year = stabilization mode.
8. 🧾 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 20% |
| ROCE | 15% |
| Debtor Days | 59 |
| Inventory Days | 31 |
| Payable Days | 13 |
| CCC | 77 days |
| EPS | ₹0.77 |
| OPM | 7.1% |
📉 OPMs are low but consistent.
📈 ROE = Textbook investor fantasy.
🧼 Working capital cycle? Clean compared to textile peers with 100+ day cycles.
9. 📦 P&L Breakdown – Show Me the Fabric
| FY | Sales | Net Profit | EPS |
|---|---|---|---|
| FY24 | ₹908 Cr | ₹7 Cr | ₹0.29 |
| FY25 | ₹602 Cr | ₹18 Cr | ₹0.77 |
🧾 Revenue fell — possibly due to yarn prices or market cooling
💥 But profit margin doubled = better cost control or product mix shift
👀 Future quarters will show if this was a one-off “margin bump” or structural change.
10. 👕 Peer Comparison – Textile Gang Wars
| Company | ROE | P/E | Market Cap | OPM |
|---|---|---|---|---|
| KPR Mill | 17.04% | 51x | ₹40,600 Cr | 19.5% |
| Trident | 8.28% | 43x | ₹15,900 Cr | 13% |
| Vardhman | 9.3% | 16x | ₹14,400 Cr | 12.9% |
| Welspun | 13.7% | 21.9x | ₹14,000 Cr | 12.3% |
| UPGL | 20% | 28x | ₹496 Cr | 7.1% |
🪡 United Polyfab has best ROE among peers, but also lowest scale.
P/E is higher than Vardhman, despite revenue being 1/15th.
11. 🏛️ Misc – Shareholding, Management Moves
- 👨👩👧 Promoter Holding: Up to 51.5% (✅)
- 👫 Public Holding: 40.2% (⛔ High but coming down)
- 🧾 DIIs entering slowly (now at 2.2%) – Interesting signal
- 🪑 Management reshuffling in July 2025 – new CS onboard
🧠 Silent confidence from management — not yelling, just executing?
12. 🚩 Red Flags Checklist
✅ ROE is real, not accounting jugglery
⚠️ Debt is high-ish (₹118 Cr), but not spiraling
⚠️ P/E > 25x = fully priced for textile
✅ Promoter buying = good sign
❌ No dividends yet
⚠️ Gujarat-only exposure – all eggs, one dyeing unit
13. 🧑⚖️ EduInvesting Verdict™
United Polyfab is quietly stitching together a turnaround story.
✔️ ROE of 20%
✔️ Consistent profit
✔️ Margin expansion
✔️ Promoter confidence
But…
❌ Stock has run 137% in 1 year
❌ CMP bakes in FY27 dreams
❌ Valuation cushion is gone
🎯 Fair Value Range: ₹11–₹15
🔥 CMP of ₹21.6 = Overheated. Might need a cooldown cycle.
🧠 Watchlist-worthy for textile sector fans — but fresh entry at this level? Abhi thoda kapda mehenga hai boss.
✍️ Written by Prashant | 📅 July 5, 2025
Tags: United Polyfab, UPGL, textile stock, fabric manufacturing, ROE 20%, Gujarat company, SME textile, EduInvesting
