🪂 At a Glance
Sky Industries Ltd makes those stick-and-peel hook-and-loop fasteners (yes, desi Velcro) and fiberglass insect screens under multiple brand names. It’s a ₹79 Cr market cap textile microcap with decent margins, 11.5% OPM, and ~16.7% ROCE. Sales growth is slow, but profit growth is real. Is it flying under the radar?
1. 🎬 Introduction – “Lagta hai chipak gaya!”
Imagine a business that literally sticks around – like, that’s its whole product line. Sky Industries makes hook-and-loop fasteners, commonly (and incorrectly) called Velcro. It’s not sexy, but it’s essential.
Whether it’s:
- Your school shoes in the 90s 🥲
- Sportswear gear 👕
- Baby products 🍼
- Or even insect screens for windows 🪟
…Sky’s products are silently sitting everywhere.
But the big question is: Is this stickiness only product-level, or also stock-level?
2. 🧵 WTF Do They Even Do?
Sky Industries is in the narrow woven fabrics segment – which includes:
🧲 Hook and Loop Tape Fasteners – Used in footwear, orthopedic belts, bags, military gear, and more.
🪟 Fiberglass Insect Screens – Used in windows and ventilators. Think: mosquito protection for posh folks.
📦 Value-added products – With brand names like Sky-Magic, Sky-Walker (no relation to Star Wars, we checked), and Sky-Wonder.
They’re in B2B – selling to manufacturers across industries.
And honestly, they’re one of the only listed players doing this niche work.
3. 💸 Financials – Slow Sales, Fast Profits
Let’s break down the story:
| Metric | FY25 | FY24 | FY23 | CAGR (3Y) |
|---|---|---|---|---|
| Revenue | ₹82.7 Cr | ₹82.5 Cr | ₹74.9 Cr | ~3% |
| PAT | ₹6.1 Cr | ₹4.7 Cr | ₹1.7 Cr | ~50% |
| OPM | 11.5% | 9.2% | 7.1% | Expanding |
| ROE | 14.3% | 11.0% | 8.1% | Improving |
| ROCE | 16.7% | 14.3% | 8.1% | Consistent |
📌 Key Insight: Sales growth is flat. But profit margins have doubled in 3 years, and so has PAT. That’s operating leverage in action, baby.
4. 📊 Valuation – Cheap or Chewing Gum?
| Metric | Value |
|---|---|
| Market Cap | ₹79.7 Cr |
| P/E | 13x |
| Price/Book | 1.76x |
| Dividend Yield | 0.98% |
| CMP | ₹101 |
| FV | ₹10 |
| 3Y Stock CAGR | 14% |
🧮 Fair Value Range:
Let’s assume FY26E PAT of ₹7.5 Cr (modest 20% growth)
- At 15x P/E → ₹112 Cr → FV = ₹142/share
- At 12x P/E → ₹90 Cr → FV = ₹114/share
📍 EduFair™ Value Range: ₹114 – ₹142
Translation: The stock isn’t “cheap”, but it’s not overvalued either. You’re paying up for consistency and margins, not hypergrowth.
5. 🔥 What’s Cooking – Dividend, Capacity, Brand?
Recent updates include:
- 🧾 Dividend of ₹1/share (10%) with a record date on June 27, 2025
- 👷♂️ Some CWIP of ₹7.9 Cr has appeared suddenly in FY25 → Looks like major capex or new capacity addition
- 📈 Net profit for FY25 hit an all-time high: ₹6.1 Cr
Also: They’re sending letters to shareholders urging demat conversion – sign of an old-school company trying to modernize.
No M&A drama. No Twitter announcements. No CEO podcast. Just boring ol’ business.
6. 🧾 Balance Sheet – Solid Like Stitching
| Metric | FY25 |
|---|---|
| Borrowings | ₹11.76 Cr |
| Net Worth | ₹45.5 Cr |
| Debt-to-Equity | ~0.26x |
| Fixed Assets + CWIP | ₹18.3 Cr |
| Investments | ₹7.4 Cr |
🧵 Low leverage, healthy asset base, and consistent reinvestment in infra. They’re using profits to grow, not to party.
7. 💵 Cash Flow – Finally Positive!
| Year | CFO (₹ Cr) | CFI | CFF |
|---|---|---|---|
| FY23 | ₹1.8 Cr | -₹0.78 Cr | -₹0.89 Cr |
| FY24 | ₹9.3 Cr | -₹6.1 Cr | -₹3.0 Cr |
| FY25 | ₹6.5 Cr | -₹3.6 Cr | -₹2.8 Cr |
✅ FY25 was the third straight year of positive cash flow from operations
❌ But investing cash flow remains negative – because of that capex buildup
8. 📉 Ratios – Crunch It, Baby
| Metric | FY25 |
|---|---|
| ROCE | 16.7% |
| ROE | 14.3% |
| OPM | 11.5% |
| ROA | 9.6% |
| Inventory Days | 149 |
| CCC | 163 days |
High working capital cycle (163 days!) due to inventory bloat – common in textile/fabric plays.
9. 🧾 P&L Breakdown – Slow and Steady Wins
- FY25 Sales: ₹82.7 Cr (flat YoY)
- FY25 EBITDA: ₹9.5 Cr
- FY25 Net Profit: ₹6.1 Cr
- EPS: ₹7.76
Basically, margin expansion + lower finance cost = earnings boom. Not demand boom.
10. 🧑🤝🧑 Peer Comparison
| Company | ROCE | OPM | P/E | MCap (Cr) |
|---|---|---|---|---|
| Sky Industries | 16.7% | 11.5% | 13x | ₹80 Cr |
| Garware Tech | 24.6% | 20.7% | 38x | ₹9000 Cr |
| Indo Count | 13.5% | 12.8% | 23x | ₹5670 Cr |
| Alok Ind | -4.7% | -2.4% | NA | ₹10,099 Cr |
Sky’s valuation looks low vs peers – but peers are way bigger, global, and scale-led.
11. 🤫 Misc – Shareholding, Promoters
- Promoter holding steady at 58.1%
- Retail public = 42%, but rising number of shareholders
- No pledges, no FII/DII
👀 Clean shareholding, no funny business.
12. 🧠 EduInvesting Verdict™
Sky Industries is like that nerdy topper in a small school – low drama, clean books, decent numbers, and just enough ambition to rise.
- 💪 Profits doubled in 3 years
- 🏭 Capex could be trigger (CWIP spike)
- 🔍 Zero institutional coverage = high discoverability upside
But…
- 🐌 Sales growth is painfully slow
- 📦 High working capital cycle could eat into margin gains
- 💥 Microcap = fragile to raw material costs and order book shocks
🧾 Verdict Summary:
“Nifty nahi… nifty se niche bhi zameen hai. And this one’s holding it together with Velcro.”
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Sky Industries, Textile Stocks, Velcro India, Microcap Manufacturing, CWIP Expansion, Smallcap Textile, Hook and Loop Stocks, EduInvesting Deep Dive, Clean Balance Sheet Stocks, Value Pick
