1. At a Glance – Blink and You’ll Miss It
Sheshadri Industries Ltd is one of those stocks that quietly sits in the corner of the market, trading at ₹19–20, market cap barely ₹10 crore, and yet throws financial ratios at you that look straight out of a multibagger WhatsApp forward. Stock P/E of 2.06, ROCE of 55%, earnings yield of 19% — all this from a company whose book value is negative ₹21.6 and whose current ratio is a horrifying 0.14.
Latest quarter (Q3 FY26) shows ₹6.83 crore revenue and ₹1 crore PAT, but profits are shrinking QoQ and YoY, while revenue itself is down 20% YoY. Meanwhile, TTM profit is inflated by ₹10.5 crore of other income, including exceptional write-backs.
This is not a “steady compounder” story. This is a “balance sheet survivor with accounting drama” story. Question is — are we watching a genuine recycling-led turnaround, or just a temporarily profitable patient still on ventilator?
2. Introduction – The Textile Zombie That Refuses to Die
Sheshadri Industries was incorporated in 2009, entered cotton spinning at exactly the wrong time, loaded itself with debt, burnt cash for years, and then did what many small textile companies eventually do — shut down the loss-making parts and reinvented itself just enough to stay alive.
Post-COVID, management realised old cotton spinning machines were power-guzzling dinosaurs. Losses piled up, electricity bills laughed louder than shareholders, and cotton spinning was quietly shown the exit door. The pivot? Recycled polyester spun yarn, a segment with better demand and relatively lower operational pain.
But don’t confuse “less painful” with “healthy”. The company is still carrying negative net worth, accumulated losses, and liabilities exceeding current assets. The recent profitability owes more to asset sales, write-backs, and other income than to roaring operational excellence.
So yes, profits are back on paper. But the business model is still walking a tightrope — without a safety net.
3. Business Model – WTF Do
They Even Do?
Let’s simplify this without putting you to sleep.
Core Yarn Business
Sheshadri manufactures:
- Cotton yarn
- Polyester yarn
- Blended yarn
But the real focus now is recycled polyester spun yarn, because:
- Cotton spinning = power + labour + losses
- Recycled poly yarn = better demand + lower stress
Speciality yarns include:
- Mélange yarn
- Slub/fancy yarn
- Doubled yarn
These are niche products, usually sold to fabric manufacturers looking for texture and differentiation.
Garments Business
There’s also a readymade garment unit in Telangana with ~10,000 pieces/day capacity. Exports contribute only ~6% of revenue, so garments are clearly not the hero here — more like a side character with limited screen time.
The Twist
Around 14% of FY25 revenue came from commission income, not manufacturing. Add rent income and write-backs, and suddenly Sheshadri looks less like a textile manufacturer and more like a financially distressed multi-activity entity trying everything to stay afloat.
If this were a Bollywood movie, the business model would be called “Adjust Karke Chal Raha Hai”.
4. Financials Overview – Numbers That Need Adult Supervision
EPS data (₹):
- Q1 FY26: -2.56
- Q2 FY26: 2.98
- Q3 FY26: 2.02
Average EPS = (-2.56 + 2.98 + 2.02) / 3 = 0.81
Annualised EPS = 0.81 × 4 = ₹3.24
So forget the flashy TTM EPS of ₹14.8 —
