🔍 At a Glance
Shree Karni Fabcom makes technical textiles—coated, knitted, woven polyester fabrics. FY25 net profit grew 8%, sales rose 31%, and they’ve bagged a vendor tag with Walmart India. But with operating cash still negative, CWIP ballooning, and a 27x P/E, is this just another SME hype stock dressed up in branded threads?
🧩 1. WTF Do They Even Do?
This isn’t your mama’s cotton kurta business.
Shree Karni manufactures:
- Technical Textiles used in industrial and functional products
- Products include:
- 🧵 Woven fabrics
- 🧵 Knitted fabrics
- 🧵 Coated textiles
- All 100% polyester (because why not ruin the environment in style)
They serve B2B buyers across India. Bonus: they just got listed as a Walmart India vendor in June 2025. Hype meter = tingling.
📊 2. Financials – Profit, Margins, ROE
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 127 | 127 | 167 🚀 |
| EBITDA (₹ Cr) | 15 | 25 | 28 |
| PAT (₹ Cr) | 5 | 15 | 16 |
| OPM (%) | 12% | 19% | 17% |
| ROE (%) | 13% | 19.9% | 18.8% |
🧠 TL;DR:
- Growth is real: Sales +31%, PAT +8%
- Margins are chunky for textiles
- ROE is SME gold standard (~19%)
💸 3. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹565 |
| Market Cap | ₹408 Cr |
| EPS (FY25) | ₹21.37 |
| P/E | 27x |
| Book Value | ₹132 |
| P/B | 4.29x 😶 |
🎯 EduFair Value Estimate:
Assign P/E band of 15–20x (good ROE but cash issues)
➡️ Fair Value = ₹320 – ₹430
So yes, current price bakes in a Walmart IPO-sized fantasy.
🍿 4. What’s Cooking – News, Triggers, Drama?
🧵 New Noida Facility went live June 27, 2025
🛒 Walmart India vendor approval same day
📉 P/E of 27x despite flat FY24 → FY25 profit
🧾 Clarification sought by NSE for March 2025 results under Reg. 33
📤 Promoter holding dipped from 70.8% → 69.2%
👀 Something’s cooking. Hopefully not polyester.
🏦 5. Balance Sheet – How Much Debt, How Many Dreams?
| Year | Reserves | Debt | Total Assets | CWIP |
|---|---|---|---|---|
| FY23 | ₹61 Cr | ₹79 Cr | ₹164 Cr | ₹3 Cr |
| FY25 | ₹86 Cr | ₹103 Cr | ₹232 Cr | ₹31 Cr 🚧 |
- Debt grew 30% in 2 years
- CWIP went 10x = Noida facility gulping cash
- Asset base rising — but working capital cycle is dragging
💰 6. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹(7) Cr | ₹(8) Cr | ₹42 Cr | ₹26 Cr |
| FY24 | ₹(7) Cr | ₹(41) Cr | ₹31 Cr | ₹(16) Cr |
⛔ Negative CFO in both years
🧱 Capex is real — ₹41 Cr cash out in FY24
💸 Financed via fresh borrowings + equity
🧠 Free cash = Nonexistent
📏 7. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| OPM | 17% |
| ROCE | 14.1% |
| ROE | 18.8% |
| Debt/Equity | ~1.1x |
| Inventory Days | 150 |
| Debtor Days | 114 |
| CCC | 178 days 🧯 |
Execution is decent, but working capital and capex stress remain.
📈 8. P&L Breakdown – Show Me the Money
| FY25 | Value |
|---|---|
| Revenue | ₹167 Cr |
| EBITDA | ₹28 Cr |
| Depreciation | ₹6 Cr |
| Interest | ₹3 Cr |
| PBT | ₹22 Cr |
| PAT | ₹16 Cr |
| EPS | ₹21.37 |
➡️ Clean structure
➡️ High interest coverage
🚨 But future growth needs to deliver hard to justify ₹565
🧊 9. Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Mcap (₹ Cr) |
|---|---|---|---|---|
| Shree Karni | 27x | 18.8% | 17% | ₹408 |
| KPR Mill | 48x | 17.4% | 19.5% | ₹39,000 |
| Garware Tech | 39x | 18.7% | 20.7% | ₹8,983 |
| Vardhman | 16x | 9.3% | 12.9% | ₹14,260 |
| Trident | 43x | 8.3% | 13.0% | ₹16,073 |
🧠 Verdict: Karni has peer-level profitability, but is still small-cap and high-risk.
👥 10. Shareholding – Promoters, Public, Institutions
| Date | Promoters | FIIs | DIIs | Public |
|---|---|---|---|---|
| Mar ’24 | 70.7% | 5.05% | 3.39% | 20.9% |
| Apr ’25 | 69.2% | 0.04% | 2.48% | 28.2% 🔺 |
📉 FII dump
📈 Public entry
🧠 Promoter dilution minor but worth tracking
🧠 EduInvesting Verdict™
Shree Karni: Great fabric margins, average cash logic.
🧵 Business model: ✅
📦 Revenue scale-up: ✅
💵 Cash flow? Still on vacation.
🛒 Walmart tag? Optionality, not certainty.
It’s not a scam. It’s also not KPR Mill. Yet.
🎯 EduFair Value: ₹320 – ₹430
Current CMP: ₹565 = Fully priced for perfection
Execution must seamlessly scale to justify it.
✍️ Written by Prashant | 📅 June 30, 2025
Tags: Shree Karni Fabcom, Technical Textile Stocks, Walmart Vendor Stocks, SME to Midcap, EduInvesting, High ROE Stocks, Textile Capex Stories
