Manomay Tex India Ltd. engages in the provision of textile business. It engages in the manufacture and sales of ready to stitch fabrics which involves winding of yarn, and weaving, as well as dispatch of garment. The company was founded by Kailashchandra Hiralal Laddh in 1978 and is headquartered in Bhilwara, India.

India

Manomay Tex India Limited

Industrials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

MANOMAY.NS reported revenue of INR 7 024mn in the last 12 months, up 29% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 35% from FY23 to INR 11.07.

The stock has been falling steadily in the past six months, losing 9% in total. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 2ppts over six months and grown 1ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 12.2% in the last 12 months, up from 8.0% in FY23. 

Historically, MANOMAY.NS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 2.8%, a growth from 2.5% in FY23. 

Manomay Tex India Limited reported a return on equity (RoE) of 14.9% in the last 12 months, up from 11.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.4% in the last 12 months, an increase from 2.8% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 6.1%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.4 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

MANOMAY.NS has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, poor working capital management, weak debt servicing capacity, and an unfavourable capital structure.

In highly turbulent market conditions, MANOMAY.NS is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, MANOMAY.NS is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Considering past and projected metrics, the stock is slightly 'cheaper' than its peers. Specifically, the stock is fairly valued on P/E, undervalued on EV/EBITDA, reasonably priced on P/FCF. 

Manomay Tex India Limited

₹ 170.4

3

Manomay Tex India Limited

₹ 170.4

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 170.4

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