At a Glance
Standard Industries Ltd (SIL) just reported another quarterly loss of ₹1.03 Cr in Q1 FY26. Revenue stood at a meager ₹10.5 Cr (↑26% YoY but still pocket change). Margins are as negative as investor sentiment, with OPM at -25%. Despite having a legacy of over 130 years, the company is stuck in a loop of losses, low promoter confidence (20% holding), and debtors who apparently take 571 days to pay.
Introduction
Imagine a company with a glorious past, decent assets, and a product line ranging from cotton sarees to dhotis. Now imagine the same company bleeding cash quarter after quarter while the real estate side sleeps like Rip Van Winkle. Welcome to Standard Industries.
While competitors innovate, SIL clings to its towel and bed sheet business—losing money faster than it sells. The dividend yield of 5.5% may seem attractive, but it’s basically a consolation prize while equity erodes slowly.
Business Model (WTF Do They Even Do?)
SIL operates in two segments:
- Property Division – manages a few legacy assets but no significant development activity.
- Trading in Textiles & Chemicals – involves cotton towels, bed sheets, dhotis, sarees, and blended fabrics.
In short, they trade in low-margin commodities and hold properties without unlocking value. The model is not broken—it’s fossilized.
Financials Overview
Q1 FY26:
- Revenue: ₹10.5 Cr (↑26% YoY)
- EBITDA: -₹2.7 Cr (loss)
- PAT: -₹1.0 Cr (vs. -₹4.4 Cr Q4 FY25)
- EPS: -₹0.16
FY25 Snapshot:
- Revenue: ₹28 Cr
- PAT: -₹14 Cr
- Margins: Negative for 3 consecutive years.
Commentary: Cost structure is high, sales tiny, and losses persistent. Other income sometimes saves the day, but not this time.
Valuation
At ₹19.1, market cap ₹123 Cr. P/E? Non-existent (loss-making).
Fair Value Range
- P/E Method: Not applicable.
- Asset Value Approach: Book value ₹18.6 → intrinsic value near ₹15–20.
- DCF: With continuous losses, even a DCF throws up its hands.
Fair Value Range: ₹15 – ₹20
(Current price ₹19 is at the upper edge, supported only by assets and dividend.)
What’s Cooking – News, Triggers, Drama
- Q1 Loss: Minimal loss, but still no turnaround signs.
- Dividend: Historically high yield, but sustainability questionable.
- Property Division: Unlocking value here is the only potential trigger.
- Debt: Reduced, but contingent liabilities ₹43 Cr loom like a ghost.
Balance Sheet
| Particulars (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 193 | 176 | 150 |
| Liabilities | 78 | 72 | 63 |
| Net Worth | 115 | 104 | 87 |
| Borrowings | 26 | 22 | 13 |
Auditor Remark: Net worth eroding, borrowings low, but cash reserves shrinking.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | -106 | -6 | 1 |
| Investing CF | 60 | 21 | 15 |
| Financing CF | -23 | -14 | -19 |
Remark: Negative operating cash for years; investing cash positive due to asset sales. Classic survival mode.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 13% | -7% | -10.5% |
| ROCE | 13% | -7% | -7.8% |
| P/E | NA | NA | NA |
| PAT Margin | -3% | -43% | -37% |
| D/E | 0.2 | 0.2 | 0.15 |
Comment: Ratios screaming stress; dividend is the only thing keeping some investors around.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 21 | 27 | 28 |
| EBITDA | -12 | -11 | -12 |
| PAT | 22 | -0 | -14 |
Remark: Revenue stagnant, losses repeating – financial Groundhog Day.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| EFC India | 774 | 132 | 25 |
| PE Analytics | 44 | 13 | 16 |
| Homesfy | 59 | 1.3 | 64 |
| Standard Ind. | 32 | -13 | NA |
Remark: Peers have at least some profits. SIL is lagging badly.
Miscellaneous – Shareholding, Promoters
- Promoters: 20.3% (alarmingly low).
- FIIs: 38.9% – surprisingly high; maybe they like the dividend?
- DIIs: 4%
- Public: 37%
Promoter Bio: Legacy promoters seem indifferent, as if waiting for a property monetization miracle.
EduInvesting Verdict™
Standard Industries is a classic example of a value trap – a company that looks cheap on book value but continues to burn cash. While its high dividend yield might tempt income-seeking investors, the sustainability of payouts is doubtful given negative profits and shrinking reserves.
SWOT
- Strengths: Legacy assets, low debt, dividend yield.
- Weaknesses: Persistent losses, negative margins, low promoter confidence.
- Opportunities: Unlocking property value, strategic partnerships.
- Threats: Prolonged losses, contingent liabilities, poor cash flows.
Conclusion:
Unless the property division suddenly delivers or management reinvents the business, SIL will remain stuck in a cycle of losses and low investor interest. Investors holding this for dividends should remember: even a towel business can dry up.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Standard Industries, Textile & Realty Stocks, Q1 FY26 Results, Value Trap Analysis
