1. At a Glance – Polyester Ka Phoenix, Bankruptcy Se Utha Hua Beast
Raj Rayon Industries Ltd is that stock which looks like it came straight out of a Bollywood redemption arc. Once bankrupt, shut down, NCLT-bound and written off by everyone except maybe one very stubborn promoter… and now suddenly posting quarterly sales of ₹305 Cr, PAT of ₹5.87 Cr, and a market cap of ₹1,215 Cr. Stock price at ₹21.8, promoter holding at a jaw-dropping 94.14%, debt of ₹208 Cr, and ROE of 15.3%.
Sounds sexy? Wait. Operating margin is just 5.33%, ROCE is 6.78%, and the stock trades at 36x earnings and 8.9x book value for a commodity polyester yarn player.
In the last 12 months, profits are up 1,976% (low base alert screaming from the rooftop), sales are growing at 27%, but quarterly profit just fell 28% YoY even as sales jumped 33%.
So what is Raj Rayon today?
A turnaround story?
A leveraged capex bet?
Or a finely dressed balance-sheet illusion?
Grab chai. This one is messy, interesting, and slightly dangerous.
2. Introduction – From NCLT Graveyard to Polyester Party
Raj Rayon’s past is not just ugly – it’s textbook failure. Between FY14–FY19, the company bled money like a punctured water tanker. Obsolete machinery, crushing debt, negative ROCE for years, and finally… production stopped in 2018.
Game over? Not quite.
Enter SVG Group in FY21. They didn’t buy a company – they bought a corpse. Assets, land, machinery, liabilities, creditors, the whole drama. Operational creditors were paid off. Old junk machines were thrown out. Fresh term loans of ₹1,850 million were sanctioned for revival.
Fast forward to FY25:
- Sales: ₹1,091 Cr
- PAT: ₹33.4 Cr
- EPS: ₹0.60
- Capacity utilisation climbing
- Plants humming again in Silvassa
But here’s the thing:
