1. At a Glance
SEL Manufacturing Company Ltd is what happens when a once-large textile empire decides to speed-run every possible financial red flag. Incorporated in 1969, SEL today trades at ₹31 with a market cap of ~₹103 crore, while sitting on ₹968 crore of debt, negative net worth (Book Value: –₹90.7), and a PAT of –₹173 crore.
Quarterly numbers? Sales ₹2.05 crore, PAT –₹42.4 crore, and an OPM of –37%—which means every towel they sell politely sets fire to cash.
ROCE is –12.6%, current ratio is 0.03 (yes, that decimal point is intentional), and interest coverage is –1.25, implying interest is paid using optimism and prayers. Promoters hold 75%, but 36% is pledged, which tells you lenders are already sitting on the sofa with shoes on.
This isn’t a turnaround story yet. This is a survival documentary.
2. Introduction
Once upon a time, SEL Manufacturing was a vertically integrated textile player doing yarn, fabric, towels, and garments. Then came leverage, expansion, more leverage, bad cycles, worse governance, and finally CIRP.
Post-resolution, new management took over, but the ghosts of the past didn’t get the memo. Banks declared the company a wilful defaulter on massive historical dues, credit ratings vanished, working capital lines dried up, and vendors started demanding cash like it’s a roadside momo stall.
Since FY21, SEL has clocked cumulative losses of ₹31,722 lakh, continues to default, and
struggles to even hire senior management because—surprise—CIBIL databases have long memories.
The business exists. The factories exist. The market exists.
The balance sheet does not cooperate.
3. Business Model — WTF Do They Even Do?
SEL is a vertically integrated textile manufacturer. In theory, that’s great.
They manufacture:
- Yarn (their main revenue engine)
- Terry towels
- Knitted & processed fabrics
- Ready-made garments
Revenue split (FY21 data):
- Yarn ~74%
- Terry towels ~16%
- Knitted cloth & others ~6%
- Job work ~4%
So basically, SEL is a yarn company wearing a towel as a cape.
But vertical integration only works when:
- You have working capital
- Banks trust you
- Customers don’t Google you
SEL currently fails all three.
4. Financials Overview
Standalone – Rs. Crores
| Metric | Latest Qtr | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 2.05 | 4.51 | 5.00 | –54.6% | –59.0% |
| EBITDA | –0.76 | –2.40 | –2.00 | NA | NA |
| PAT | –42.40 | –41.00 | –44.00 | –3.5% | +3.6% |
| EPS (₹) | –12.30 | –12.00 | –13.35 | NA | NA |
Commentary:
Revenue is collapsing faster than textile demand during lockdowns. Losses remain structurally embedded. Any “improvement” is statistical noise, not a trend.
5. Valuation Discussion — Fair Value Range Only
Let’s
