At a Glance
Libas Consumer Products Ltd is a B2B fashion and retail SME dabbling in designer apparel and Gangji rock salt. FY25 was spicy: a ₹2.5 Cr fire at its store, ₹11.87 Cr of possibly fake inventory, ₹2.98 Cr in doubtful loans, ₹1.24 Cr in GST disputes… and a ₹1.57 Cr net loss. All while trading at 0.45x book. Should SEBI send a salt shaker or a fire extinguisher?
1. 🎬 Intro: From Designer Lehengas to Financial Lava
- CMP: ₹14.1
- Market Cap: ₹37.3 Cr
- Book Value: ₹31.1 → P/B: 0.45x
- FY25 EPS: ₹1.00 → but hold up, auditors are calling BS
- ROE (3Y avg): 3.37%
- 5-Year Sales CAGR: 6.9%
- Promoter Holding: 30.7%
✅ Dirt cheap stock
❌ But fire, fraud, and fabric don’t mix well.
2. 👗 WTF Do They Even Do?
Dual business model:
- Fashion Retail / Ethnic Apparel
- B2B + retail designerwear (Libas, Riyaz Gangji)
- Claims tie-ups with Jabong, Glitstreet, IndianRoots (some of which… don’t even exist anymore 🫠)
- Institutional clients, corporate dressing, e-commerce, etc.
- Gangji Rock Salt
- Why? No idea. Just vibes.
- FMCG-adjacent diversification gone rogue.
So this is part Zara, part Tata Salt. Just without the sales.
3. 💰 Financials: The Rollercoaster of Revamp
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales (₹ Cr) | 81.4 | 74.3 | 91.9 |
| Net Profit (₹ Cr) | 7.6 | 5.2 | 2.64 |
| OPM % | 10.6% | -0.77% | 4.6% |
| ROE | 7% | 3% | 3.4% |
Libas is profitable… until you apply audit adjustments.
Then it’s just… 🧨.
4. 📊 Valuation: Cheap for a Reason?
- CMP: ₹14.1
- EPS: ₹1.00
- P/E: 14.1x
- P/B: 0.45x
- Market Cap / Sales: ~0.4x
🧮 Fair Value Range (based on clean earnings, if they exist):
→ ₹10 – ₹18 looks fair if we believe the numbers.
But auditors just said: “Actually, don’t.”
5. 🍲 What’s Cooking?
🔥 Fire at Mumbai store (₹2.5 Cr loss) – insurance claimed, payout pending
📉 Inventory inflated by ₹11.87 Cr
🚨 ₹2.98 Cr doubtful loans
⚠️ ₹1.24 Cr disputed GST liability
🧍♀️ MD Reshma Ganji resigned suddenly in March 2025
💼 New MD appointed; also restructured board in April 2025
🤝 FY24: ₹3 Cr order from Reliance Retail (not mentioned since)
Basically, their fashion store caught fire, but balance sheet caught a bigger one.
6. 💼 Balance Sheet – Debt Rising, MD Exiting
| Metric | FY25 |
|---|---|
| Total Assets | ₹104.8 Cr |
| Borrowings | ₹14.3 Cr |
| Equity Capital | ₹26.3 Cr |
| Reserves | ₹55.6 Cr |
Not terrible in isolation. But when inventory is overstated and cash flow is erratic, even ₹14 Cr debt can hurt.
7. 💸 Cash Flow – Patchy At Best
| FY | CFO | CFI | CFF |
|---|---|---|---|
| FY23 | ₹-13.1 Cr | ₹0.3 Cr | ₹17.1 Cr |
| FY24 | ₹-3.0 Cr | ₹0.1 Cr | ₹3.7 Cr |
| FY25 | ₹9.09 Cr | ₹0.15 Cr | ₹-2.35 Cr |
FY25 was the only year with positive cash from ops, thanks to burning unsold stock (literally and figuratively).
8. 📉 Ratios – The Financial Fashion Faux Pas
| Ratio | Value |
|---|---|
| ROCE | 4.68% |
| ROE | 3.37% |
| OPM | 4.6% |
| Debtor Days | 157 |
| Inventory Days | 147 |
| Payable Days | 21 |
| CCC | 320 days 😵 |
It takes almost a full year to convert input into cash. That’s not fashion – that’s fossilization.
9. 💵 P&L Breakdown
FY25:
- Revenue: ₹91.9 Cr
- Expenses: ₹87.7 Cr
- Operating Profit: ₹4.2 Cr
- Interest: ₹1.4 Cr
- Net Profit: ₹2.64 Cr (unaudited truth)
- Audited post-adjustment: ₹-1.57 Cr loss
Auditor note: “These numbers may not reflect true and fair view.”
Translation: Even the spreadsheet gave up.
10. 📊 Peer Comparison – Designerware vs Disasterwear
| Company | P/E | OPM | ROE | Sales (₹ Cr) | Mcap (₹ Cr) |
|---|---|---|---|---|---|
| Page Ind | 75 | 21.5% | 48.5% | 4,935 | ₹54,640 |
| Lux Ind | 27 | 9.1% | 10% | 2,583 | ₹4,488 |
| Libas | 14 | 4.6% | 3.4% | 91.9 | ₹37.3 |
Sure, Libas is cheaper. But so is used fabric. Doesn’t mean you invest in it.
11. 👨👩👦 Shareholding – Static But Suspect
- Promoter Holding: 30.7% (unchanged for 3+ years)
- No FII/DII
- Public: 69.3%
They’ve done a decent job keeping the cap table steady. But no promoter increase in stake despite low P/B = no real confidence.
12. 📎 Miscellaneous Masala
- ₹3 Cr order from Reliance Retail got a press release in 2024… but no update after
- FY24 had negative margins
- FY25 has fire damage, tax disputes, and fake stock alerts
- No dividend ever
- Website claims e-commerce tie-ups with defunct portals
The only consistent part? Inconsistency.
13. 🧑⚖️ EduInvesting Verdict™
Libas is a classic microcap:
- Low P/B, under ₹50 Cr market cap
- Fashion + FMCG diversification
- Potential for re-rating
BUT…
👉 FY25 = Auditor red flags
👉 Low ROE, weak governance, and chaotic financials
👉 Zero visibility on salt business contribution
👉 Fire incident + MD resignation + inflated inventory = 🧨
Fair Value Range = ₹10 – ₹18
More watchlist than wishlist.
✍️ Written by Prashant | 📅 08 July 2025
Tags: Libas Consumer Products, SME stocks, fashion retail India, Gangji salt, audit qualifications, fire incident, promoter holding, EduInvesting, microcap analysis, low P/B stocks India
