1. At a Glance
Soma Textiles has just turned a ₹3.6 Cr profit after a series of losses, but wait – promoters are cashing out their entire 74.98% stake for ₹87.7 Cr. An open offer at ₹47.14/share is underway while the stock trades at ₹98.6. Plot twist? Denim is cool, but this stock is on fire for reasons beyond fabric.
2. Introduction
Imagine a company selling jeans but giving investors a thriller. Soma’s sales are still in tatters (₹2 Cr Q1 revenue) yet it’s pulling profits thanks to other income magic. And now with promoters exiting, the takeover soap opera just got spicy.
3. Business Model – WTF Do They Even Do?
- Products: Denim, stretch fabric, vintage styles.
- Reality: Sales are so low they wouldn’t fill a Zara rack.
- Current Mode: Survival through asset sales & corporate restructuring.
4. Financials Overview
- Q1 FY26 Sales: ₹2.05 Cr (tiny)
- Net Profit: ₹3.63 Cr (thanks to other income)
- OPM: -114% (still bleeding operationally)
Verdict: Earnings built on other income – not fabric margins.
5. Valuation – What’s This Stock Worth?
- P/E: 222x (lol)
- Book Value: ₹47.8 (P/B 2.1x)
- Fair Value Range: ₹40–₹55 (if open offer decides the floor)
Punchline: At current prices, investors are paying Gucci prices for a roadside pair of jeans.
6. What-If Scenarios
- Bull Case: New owners turn it around → ₹120
- Bear Case: Post-open offer dump → ₹50
- Base Case: ₹70–₹90, speculative play.
7. What’s Cooking (SWOT)
Strengths: Almost debt-free, open offer trigger.
Weakness: Declining core business, massive working capital days (3,657!).
Opportunities: New owner Roadway Solutions might revamp operations.
Threats: Earnings collapse if other income vanishes.
8. Balance Sheet 💰
| Particulars (Mar’25) | Amount (₹ Cr) |
|---|---|
| Equity Capital | 33 |
| Reserves | 125 |
| Borrowings | 3 |
| Total Liabilities | 162 |
| Comment: Clean balance sheet, but reserves are slim. |
9. Cash Flow (FY23–FY25)
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | 170 | 20 | -233 |
| FY24 | 26 | 4 | -18 |
| FY25 | -6 | -1 | -4 |
| Snark: Cash flow is like old jeans – full of holes. |
10. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | -0.27% |
| ROCE | -0.92% |
| OPM | -69% |
| P/E | 222x |
| Punchline: Ratios uglier than torn denim, but traders love chaos. |
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 5 | -5 | 165 |
| FY24 | 6 | -3 | 21 |
| FY25 | 9 | -6 | 69 |
| Comment: Profits are purely from “other income stunts.” |
12. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| KPR Mill | 6,388 | 797 | 51 |
| Vardhman | 9,862 | 852 | 16 |
| Soma Textiles | 10 | 72 | 222 |
| Peer verdict: Soma is the drunk cousin at the textile family reunion. |
13. EduInvesting Verdict™
Soma Textiles is less about denim and more about takeover drama. Speculators may love the volatility, but fundamentals are threadbare.
Written by EduInvesting Team | 28 July 2025
Tags: Soma Textiles, Open Offer, Denim Stocks, EduInvesting Premium
