At a Glance
Premco Global just dropped its Q1 FY26 results—and it’s looking like a well-stitched quarter. Revenue hit ₹29.7 Cr (+21% YoY), and PAT clocked in at ₹3.62 Cr (+18% QoQ), with OPM stretching to 19.85%. The company also declared a ₹4/share interim dividend, because apparently someone remembered shareholders exist. But the real kicker? The CEO just resigned. Coincidence or “thank you, now I leave”? Either way, this ₹145 Cr elastic tape manufacturer is punching above its weight with serious consistency.
Introduction
If you thought elastic tapes were boring, Premco Global is here to change your mind—and maybe your dividend portfolio. This 1986-born Mumbai-based company manufactures woven and knitted elastic tapes. Its clients? Mostly exporters, apparel giants, and hygiene product makers.
Despite being in a niche textile corner, Premco is that rare smallcap: profitable, consistent, dividend-paying, and totally ignored. With a market cap of just ₹145 Cr and a P/E of 13.9, it’s trading more like an undervalued PSU than a consumer-facing textile supplier. Yet, it keeps delivering earnings like clockwork and paying out ~80% of profits as dividends. Investors, pay attention—this elastic has some spring left.
Business Model (WTF Do They Even Do?)
Premco makes narrow woven elastic and knitted tapes used in garments, innerwear, baby products, and medical applications. Their key offerings include:
- High-grade elastic tapes for lingerie & athleisure
- Custom woven materials for diaper and hygiene segments
- Export-grade product for MNCs
Exports form a significant revenue chunk, and the company is a certified Single Star Export House. Customers are sticky (pun intended), and quality + certifications keep competition low. The result: a high-margin, low-volume, B2B niche with repeat orders.
Financials Overview
- Q1 FY26:
- Revenue: ₹29.68 Cr
- PAT: ₹3.62 Cr
- OPM: 19.85%
- FY25 (full year):
- Revenue: ₹109 Cr
- PAT: ₹10 Cr
- EPS: ₹28.78
With an ROCE of 11.4% and ROE of 8.65%, Premco is solid, not flashy. Add a 2.27% dividend yield and ~₹9 EPS run rate, and you’ve got a sturdy cash cow in elastic clothing.
Valuation – The Crystal Ball Section
- P/E Method:
- EPS TTM = ₹30.68
- Sector P/E = 15
- Fair Value = ₹30.68 × 15 = ₹460
- EV/EBITDA:
- EBITDA ≈ ₹17 Cr
- EV/EBITDA multiple = 8
- Implied EV = ₹136 Cr → Per share ≈ ₹420
- Dividend Yield Method:
- ₹4 interim + ₹4 final = ₹8 annually
- Yield at ₹440 = 1.8%; if expected yield is 2.5% → Fair Value = ₹320
🎯 Fair Value Range: ₹320–₹460
(Current price ₹440: Fair, leaning toward top end)
What’s Cooking – News, Triggers, Drama
- Dividend Bonanza: ₹4 interim dividend declared.
- CEO Exit: Ramesh Panwar resigned—no scandal, just “personal reasons.” Hmmm.
- AGM Buzz: Both interim & final dividend record dates locked.
- Margins Rising: Q1 OPM 19.85% vs FY25 avg 14%.
- Export Tailwinds: Weak rupee could benefit earnings.
Balance Sheet
| Particulars (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 3 | 3 | 3 |
| Reserves | 105 | 110 | 104 |
| Borrowings | 12 | 6 | 10 |
| Total Assets | 130 | 130 | 129 |
Auditor’s Roast: Low debt, high reserves, and consistent payout. It’s a clean balance sheet you wish every microcap had.
Cash Flow – Sab Number Game Hai
| (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating Cash Flow | 19 | 11 | 5 |
| Investing Cash Flow | -13 | 7 | -5 |
| Financing Cash Flow | -5 | -12 | -13 |
| Net Cash Flow | 1 | 5 | -12 |
Commentary: Free cash is real. Lower cash in FY25 due to payouts, not operational issues.
Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE (%) | 9% | 10% | 8.65% |
| ROCE (%) | 9% | 10% | 11.4% |
| OPM (%) | 15% | 15% | 15%+ |
| D/E Ratio | 0.1 | 0.06 | 0.09 |
Verdict: Sensible and safe. Nothing “sexy” here—but very dateable long-term.
P&L Breakdown – Show Me the Money
| (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 93 | 98 | 109 |
| EBITDA | 14 | 15 | 17 |
| PAT | 9 | 10 | 10 |
Commentary: Topline grows slowly, margins stable. PAT consistent. A financial metronome.
Peer Comparison
| Company | Revenue (₹ Cr.) | PAT (₹ Cr.) | P/E |
|---|---|---|---|
| KPR Mill | 6,388 | 797 | 50 |
| Trident | 6,951 | 436 | 36 |
| Vardhman Textile | 9,862 | 852 | 16 |
| Premco Global | 112 | 10 | 14 |
Comment: For its size, Premco’s P/E is cheaper and its margins stronger than many peers.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 66.98%—unchanged.
- Public: 33%—very stable.
- No FII/DII—This one’s still flying under radar.
Promoter Commentary: Not selling, not pledging, not hyping. Old-school ethics meets steady returns.
EduInvesting Verdict™
Premco Global is a delightful microcap in a boring industry—boring in the best way. Consistent revenue, healthy OPM, dividend cheer, and a clean balance sheet make it ideal for investors who want safety with yield. The growth is moderate, not miraculous.
SWOT Analysis
- Strengths: High margins, regular dividends, low debt.
- Weaknesses: Slow topline growth, export dependence.
- Opportunities: Expanding client base, import substitution.
- Threats: Raw material volatility, forex risks, leadership exit.
Final Word: Premco is not going to be your next multibagger, but it might just be your most peaceful holding. Good for passive investors who like elastic cashflows.
Written by EduInvesting Team | 30 July 2025SEO Tags: Premco Global, Elastic Tapes, Textile Microcap, Dividend Stocks
