KPRMILL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.5

📊 Financials Overview:

• Revenue & Profitability: Quarterly PAT declined from 162 Cr. to 132 Cr. (-37.1%), showing margin pressure.
• Margins: ROE at 17.6% and ROCE at 21.5% indicate strong efficiency and profitability.
• Debt: Debt-to-equity at 0.05 reflects a very low leverage position, ensuring financial stability.
• Cash Flow: Dividend yield at 0.52% provides modest shareholder returns.

💹 Valuation Indicators:

• P/E Ratio: 57.1 vs Industry PE of 19.1 → significantly overvalued.
• P/B Ratio: Current Price / Book Value ≈ 8.2 → trading at a steep premium.
• PEG Ratio: -14.3 → negative, suggesting weak earnings growth outlook.
• Intrinsic Value: Current price (₹975) is above fair zone; undervaluation closer to ₹750–₹800.

🏢 Business Model & Competitive Advantage:

• KPR Mill operates in textiles, garments, and sugar with integrated operations.
• Competitive advantage lies in scale, diversified product portfolio, and strong export presence.
• Low debt and strong efficiency metrics support long-term sustainability despite cyclical risks.

📈 Entry Zone & Holding Guidance:

• Entry Zone: Attractive near ₹750–₹800 (aligned with 52-week low).
• Long-Term Holding: Suitable for investors seeking exposure to textile and garment exports; valuations are stretched, so accumulation at lower levels is preferable.

Positive

• Strong ROE (17.6%) and ROCE (21.5%) indicate efficient capital use.
• Low debt-to-equity ratio (0.05) ensures financial stability.
• DII holdings increased (+0.40%), showing domestic investor confidence.

Limitation

• High P/E ratio (57.1) compared to industry average (19.1).
• P/B ratio at 8.2 indicates steep premium valuation.
• Quarterly PAT declined (-37.1%), showing earnings pressure.

Company Negative News

• FII holdings decreased (-0.10%), showing reduced foreign investor confidence.
• Stock trading well below 52-week high (₹1,395 → ₹975), showing weak momentum.

Company Positive News

• DII holdings increased (+0.40%), reflecting domestic support.
• Strong efficiency metrics (ROE 17.6%, ROCE 21.5%) highlight operational strength.

Industry

• Industry PE at 19.1, much lower than KPR Mill’s valuation.
• Textile and garment industry benefits from export demand and domestic consumption growth.

Conclusion

⚖️ KPR Mill is a fundamentally strong textile player with excellent efficiency and low debt. However, current valuations are stretched, and profitability has weakened. Investors may consider entry near ₹750–₹800 for better risk-reward. Long-term holding is viable for those confident in textile and export growth, but monitoring earnings trends is essential.