At a Glance
Aananda Lakshmi Spinning Mills Ltd is a ₹6 Cr market-cap “textile” company that officially shut down its spinning division in FY25. It still reports profits, but 100% of it comes from other income. With negative reserves, book value of ₹–43.9, and zero institutional interest, this is less a turnaround and more an accounting hallucination in cotton clothing.
1. 🎯 Introduction with Hook
If you bought this stock at ₹10 and watched it go to ₹25, congratulations — you have more luck than LIC IPO investors.
But here’s the real picture:
- 🚨 Spinning operations discontinued
- 💸 Net worth = negative ₹18.85 Cr
- 📉 Sales growth (5Y) = –23.9% CAGR
- 💀 Book Value: –₹43.9
And yet, it trades at a P/E of 1.76 — not because it’s cheap, but because it’s delusional.
2. 🧶 WTF Do They Even Do? (Business Model)
They used to make:
- Grey Yarn: For sweaters, socks, innerwear
- Specialty Mélange Yarn: Cotton/Viscose, Poly/Viscose blends
⚠️ As per FY25 filings, the spinning division has been shut.
Now, there’s no clarity on what business they’re continuing. FY25 “revenue” is ₹2.5 Cr — but mostly non-core.
So basically, this is now a shell with a name, a BSE listing, and a questionable future.
3. 💸 Financials – Profit, Margins, Earnings Breakdown
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM | EPS |
|---|---|---|---|---|
| FY22 | ₹4.78 | ₹1.31 | -17% | ₹3.74 |
| FY23 | ₹0.21 | ₹5.01 | -90% | ₹14.32 |
| FY24 | ₹2.10 | ₹4.08 | 69% | ₹11.66 |
| FY25 | ₹2.54 | ₹3.09 | 67% | ₹8.83 |
BUT WAIT…
- FY25 Other Income = ₹1.48 Cr
- FY23 Other Income = ₹5.57 Cr
- FY22 Other Income = ₹3.6 Cr
So >90% of profits = non-operational gains.
4. 🧮 Valuation – Cheap, Meh, or Crack?
- CMP: ₹17
- EPS: ₹8.83
- P/E: 1.76x
- Book Value: –₹43.9
- ROE: ❌ (Net worth is negative)
📉 It looks cheap. But remember:
This is a “P/E trap” — because E (earnings) is not from operations. It’s from “other things” (land? trading? don’t know).
🧮 Fair Value Range
Assuming zero growth, no dividend, no real business left:
- Optimistic (for being listed): ₹2 – ₹4
- Actual fair value: ₹0
5. 🚨 What’s Cooking – News, Disclaimers, Audits
- ❌ Spinning division discontinued in FY25
- 🚨 Audit qualification due to unpaid dues
- 👨💼 Appointed internal auditor for the first time in FY25
- 🛑 Confirmed “Going Concern” doubts in filing
- 📄 SEBI “Large Corporate” reporting marked as “Not Applicable” (duh)
So the company doesn’t know what it’s doing. Neither does the auditor.
6. 📉 Balance Sheet – How Much Debt, How Much Debt?
| Year | Borrowings | Reserves | Net Worth |
|---|---|---|---|
| FY22 | ₹27.6 Cr | ₹–31 Cr | ₹–3.4 Cr |
| FY24 | ₹20 Cr | ₹–21.9 Cr | ₹–1.9 Cr |
| FY25 | ₹13.3 Cr | ₹–18.9 Cr | ₹–5.6 Cr |
✅ Debt has reduced
❌ But net worth is still deeply negative
How? Possibly due to asset sales, settlements, or writing off liabilities. But that’s not sustainable ops.
7. 💰 Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF |
|---|---|---|---|
| FY24 | ₹2.54 Cr | ₹1.16 Cr | ₹–3.69 Cr |
| FY25 | ₹6.92 Cr | ₹0.02 Cr | ₹–6.80 Cr |
Looks like the company generated some cash in FY25 and paid down debt. But this is not operational — just balance sheet repair.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | NA (neg. net worth) |
| ROCE | NA |
| OPM | 67.3% |
| Debtor Days | 10.1 |
| D/E | NA (no equity) |
| P/BV | ❌ Can’t compute — negative BV |
Looks great on surface (OPM 67%)… until you realize it’s from ₹2.5 Cr revenue and ₹1.5 Cr other income.
9. 🧾 P&L Breakdown – Show Me the Paisa
- FY25 Sales: ₹2.54 Cr
- FY25 Other Income: ₹1.48 Cr
- Interest + Dep: ₹~0.1 Cr
- Profit Before Tax: ₹3.08 Cr
Verdict: Accounting profit. No cash business.
10. 🧵 Peer Comparison – Should You Even Compare?
| Company | P/E | MCap (₹ Cr) | ROE | BV |
|---|---|---|---|---|
| KPR Mill | 49x | ₹39,000+ | 17% | ₹146 |
| Trident | 43x | ₹15,800 | 8.3% | ₹9.2 |
| Aananda Lakshmi | 1.76x | ₹5.9 | NA | –₹43.9 |
This is like comparing a ghost kitchen to D-Mart.
11. ⚠️ Misc – Promoters, DII, Shareholding
- Promoters: 58.67%
- DIIs: 0.02% (maybe forgot to unsubscribe?)
- Public: 41.3%
- ~7,500 shareholders still exist
🚩 Consistent audit flags
🚩 No dividend ever
🚩 No promoter buying
🚩 No visibility on what business remains
12. 🧑⚖️ EduInvesting Verdict™
This is a “valuation trap in a polyester suit.”
Yes, it’s cheap.
Yes, the P/E is low.
But there’s no E. No B (book). No biz. No DCF. No DII.
🧮 Fair Value Range: ₹0 – ₹4
📉 CMP: ₹17
Verdict: “Threadbare, and mostly imaginary”
If you’re investing in this, you’re not betting on yarn — you’re betting on a backdoor listing.
✍️ Written by Prashant | 📅 July 8, 2025
Tags: Aananda Lakshmi Spinning Mills, textile penny stock, discontinued operations, fake P/E trap, EduInvesting yarn exposé
