The quarterly performance underscores the persistent operational challenges facing this Below Average quality company, which continues to grapple with negative book value, weak profitability metrics, and a bearish technical outlook. With revenues of ₹1.31 crores declining 12.08% quarter-on-quarter and 15.48% year-on-year, Mid India Industries faces mounting pressure in an increasingly competitive textile export market.
The textile manufacturer's performance reflects the structural challenges plaguing small-scale export-oriented spinning units in India. With a negative book value of ₹2.76 per share and shareholder funds of negative ₹4.50 crores as of March 2025, the company's financial foundation remains precarious. The September quarter's return to losses highlights the fragility of the company's operations, where even modest revenue declines translate into bottom-line pressure.
Financial Performance: Struggling to Maintain Positive Trajectory
Mid India Industries' Q2 FY26 financial performance reveals a company unable to sustain the brief profitability achieved in Q1 FY26. Net sales of ₹1.31 crores in the September quarter declined 12.08% sequentially from ₹1.49 crores in June, whilst the year-on-year comparison showed a steeper 15.48% contraction from ₹1.55 crores in September 2024. This marks the third consecutive quarter of declining revenues on a year-on-year basis, signalling persistent demand weakness in the company's export markets.
Operating profitability remains the company's Achilles' heel. Operating profit before depreciation, interest, tax and other income (PBDIT) stood at negative ₹0.01 crores in Q2 FY26, translating to an operating margin of negative 0.76%. Whilst this represents a marginal improvement from the negative 9.49% margin in March 2025, it marks a deterioration from the positive 2.01% margin achieved in the immediately preceding June quarter. The company's inability to maintain positive operating margins reflects fundamental issues with cost structure and pricing power.
| Quarter | Net Sales (₹ Cr) | QoQ Change | YoY Change | Operating Margin | PAT (₹ Cr) |
|---|---|---|---|---|---|
| Sep'25 | 1.31 | -12.08% | -15.48% | -0.76% | -0.01 |
| Jun'25 | 1.49 | +8.76% | +46.08% | 2.01% | 0.02 |
| Mar'25 | 1.37 | -42.44% | -3.52% | -9.49% | -0.04 |
| Dec'24 | 2.38 | +53.55% | — | 2.52% | 0.04 |
| Sep'24 | 1.55 | +51.96% | — | 0.65% | -0.01 |
| Jun'24 | 1.02 | -28.17% | — | 0.0% | -0.11 |
| Mar'24 | 1.42 | — | — | -19.01% | -0.19 |
Other income of ₹0.02 crores in Q2 FY26 provided marginal support, preventing deeper losses. However, the company's reliance on non-operating income to offset operational deficiencies is unsustainable. After accounting for depreciation of ₹0.01 crores, the company posted a pre-tax loss of ₹0.01 crores and a net loss of ₹0.01 crores for the quarter, with a PAT margin of negative 0.76%.
On a half-yearly basis (H1 FY26), the company reported revenues of ₹2.80 crores and a net profit of ₹0.01 crores, representing a marginal improvement from the losses of previous periods. However, this improvement appears fragile given the deteriorating trajectory in Q2 FY26.
Operational Challenges: Negative Book Value and Weak Capital Efficiency
Mid India Industries operates with a fundamentally weak balance sheet that constrains its operational flexibility and growth prospects. As of March 2025, the company reported shareholder funds of negative ₹4.50 crores, comprising share capital of ₹16.30 crores offset by reserves and surplus of negative ₹20.80 crores. This negative net worth position reflects accumulated losses over multiple years, with the reserves deficit widening from ₹20.68 crores in March 2024 to ₹20.80 crores in March 2025.
The company's asset base has contracted significantly. Fixed assets stood at ₹0.33 crores as of March 2025, down from ₹0.49 crores a year earlier and ₹1.23 crores in March 2023, indicating minimal capital expenditure and ongoing asset depreciation. Current assets of ₹1.20 crores as of March 2025 represent a sharp decline from ₹3.57 crores in March 2024, suggesting working capital pressures and potentially constrained operations.
Critical Balance Sheet Weakness
Negative Net Worth Alert: Mid India Industries operates with negative shareholder funds of ₹4.50 crores, resulting in a negative book value per share of ₹2.76. This technical insolvency position, where liabilities exceed assets, represents a fundamental risk for equity investors. The company's ability to continue operations depends on creditor support and promoter commitment, both of which remain uncertain in the absence of sustained profitability improvements.
Return on equity (ROE) and return on capital employed (ROCE) metrics paint a concerning picture. The company's average ROE stands at 0.0%, whilst the latest ROE is reported as negative due to the negative book value. Average ROCE of 3.34% indicates minimal returns generated on capital deployed, well below the cost of capital for any reasonable investor. The latest ROCE is classified as "Negative Capital Employed," reflecting the distressed nature of the balance sheet.
The company maintains minimal debt, with long-term borrowings at zero and current liabilities of ₹5.98 crores as of March 2025, comprising primarily trade payables of ₹5.90 crores. Whilst the absence of formal debt reduces financial risk, the elevated trade payables relative to current assets suggest potential working capital management challenges and strained supplier relationships.
Industry Context: Export-Oriented Textile Sector Headwinds
Mid India Industries operates in the highly competitive garments and apparels sector, specifically focusing on export-oriented cotton spinning. The company's 100% export orientation exposes it to global demand fluctuations, currency volatility, and intense price competition from larger, more efficient manufacturers. The Indian textile export sector has faced headwinds in recent quarters due to weak demand in key markets, rising input costs, and competitive pressure from countries like Bangladesh and Vietnam.
The company's location in Mandsaur, Madhya Pradesh—a cotton-growing region—theoretically provides proximity to raw materials. However, this advantage has not translated into sustained competitive positioning, as evidenced by the company's declining revenues and negative operating margins. The broader sector has seen consolidation favouring larger players with scale advantages, modern equipment, and diversified product portfolios—attributes that Mid India Industries lacks.
The company's micro-cap status (₹14.00 crores market capitalisation) and minimal institutional interest (0.25% institutional holdings) reflect market scepticism about its turnaround prospects. With no investments in capacity expansion or modernisation visible in recent financial statements, the company appears to be in a survival mode rather than growth trajectory.
Peer Comparison: Lagging Industry Standards Across Metrics
A comparison with peers in the garments and apparels sector reveals Mid India Industries' significant underperformance across key financial and valuation metrics. The company's ROE of 0.0% compares unfavourably with peers such as Gujarat Cotex (3.69%) and Sri Nachammai Cotton Mills (7.72%), highlighting inferior capital efficiency and profitability.
| Company | P/E (TTM) | Price/Book | ROE (%) | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Mid India Industries | 1243.69 | -2.76 | 0.0% | 0.01 | NA |
| Gujarat Cotex | 19.16 | 1.66 | 3.69% | 0.42 | NA |
| Sri Nachammai Cotton | NA (Loss Making) | 0.73 | 7.72% | 2.11 | NA |
| Asia Pack | 54.55 | 0.36 | 0.0% | -0.07 | NA |
Mid India Industries' P/E ratio of 1243.69 times appears extraordinarily elevated, reflecting minimal earnings relative to market capitalisation. This valuation multiple is unsustainable and suggests the stock is significantly overvalued relative to its earnings power. The negative price-to-book ratio of negative 2.76 times reflects the company's negative net worth, a red flag absent in most peer companies.
Whilst the company maintains low leverage with a debt-to-equity ratio of 0.01, this reflects limited access to credit rather than prudent financial management. Peers like Gujarat Cotex demonstrate that moderate leverage (0.42 times) can be employed effectively to support operations when combined with positive ROE and sustainable profitability.
Valuation Analysis: Risky Grade Reflects Fundamental Weaknesses
Mid India Industries carries a "RISKY" valuation grade, a classification that accurately reflects the company's precarious financial position and uncertain prospects. Trading at ₹7.63 as of November 17, 2025, the stock has declined 36.42% from its 52-week high of ₹12.00, though it remains 14.39% above its 52-week low of ₹6.67.
The company's valuation multiples present a contradictory picture. The P/E ratio of 1243.69 times appears absurdly high, reflecting minimal trailing twelve-month earnings. The negative price-to-book value of negative 2.76 times indicates the market is valuing the company below its liquidation value—or more accurately, assigning value despite negative book value based on going-concern assumptions. The EV/EBITDA multiple of negative 12.39 times and EV/Sales of 1.89 times reflect the distressed nature of the business.
The PEG ratio of 12.17 suggests the stock is expensive relative to its growth prospects, though this metric has limited relevance for a company with negative book value and inconsistent profitability. The absence of dividend payments (yield: NA) eliminates any income component for investors, leaving capital appreciation as the sole potential return driver—a challenging proposition given the company's operational struggles.
From a fair value perspective, assigning a reasonable valuation to Mid India Industries is problematic given the negative net worth. Traditional valuation methodologies (DCF, P/E multiples, P/BV ratios) break down when applied to companies with negative equity. Any investment at current levels represents a speculative bet on operational turnaround and balance sheet restructuring—outcomes that appear unlikely based on recent performance trends.
Shareholding Pattern: Stable Promoter Base Amid Minimal Institutional Interest
The shareholding pattern of Mid India Industries reveals a stable promoter base controlling 50.71% of equity as of September 2025, unchanged from June 2025. The promoter group, led by Ranchod Prasad Laxmi Narayan HUF (23.05%), Pradeep Ganediwal (14.53%), and Ranchhod Prasad Ganediwal (5.56%), has maintained consistent holdings over recent quarters. Notably, there is no promoter pledging, eliminating one source of financial risk.
| Category | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|
| Promoter Holding | 50.71% | 50.71% | 50.92% | 0.00% |
| FII Holding | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 0.25% | 0.25% | 0.25% | 0.00% |
| Non-Institutional | 49.04% | 49.04% | 48.82% | 0.00% |
The complete absence of foreign institutional investor (FII) and mutual fund holdings signals institutional investors' lack of confidence in the company's prospects. With only 0.25% held by other domestic institutional investors (DII), Mid India Industries operates outside the radar of professional fund managers who typically drive liquidity and price discovery in equity markets.
The non-institutional shareholding of 49.04% comprises retail investors and potentially high-net-worth individuals, a shareholder base that may lack the sophistication or resources to influence corporate governance improvements. The stability of shareholding pattern, whilst eliminating volatility from large block sales, also suggests limited interest from new investors who might bring fresh capital or strategic direction.
Stock Performance: Severe Underperformance Across All Timeframes
Mid India Industries' stock price performance reflects the market's dim view of the company's prospects. Trading at ₹7.63 as of November 17, 2025, the stock has delivered negative returns across most relevant timeframes, significantly underperforming the Sensex benchmark.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -6.27% | +1.69% | -7.96% |
| 1 Month | +4.95% | +1.19% | +3.76% |
| 3 Months | -2.80% | +5.40% | -8.20% |
| 6 Months | -4.03% | +3.18% | -7.21% |
| Year-to-Date | -18.13% | +8.72% | -26.85% |
| 1 Year | -22.70% | +9.50% | -32.20% |
| 3 Years | -45.19% | +37.57% | -82.76% |
The stock's one-year return of negative 22.70% compares unfavourably with the Sensex's positive 9.50% return, resulting in negative alpha of 32.20 percentage points. This underperformance extends across virtually all timeframes, with the three-year return of negative 45.19% contrasting sharply with the Sensex's positive 37.57% gain. The stock has also underperformed its sector, with the garments and apparels index delivering positive 3.29% returns over the past year whilst Mid India Industries declined 22.70%.
The stock's beta of 1.50 indicates higher volatility than the broader market, with volatility of 67.34% compared to the Sensex's 12.26%. This high beta, combined with negative returns, places Mid India Industries in the "HIGH RISK LOW RETURN" category—an unattractive risk-reward profile for most investors. The risk-adjusted return of negative 0.34 over the past year, compared to the Sensex's positive 0.77, further underscores the poor risk-adjusted performance.
"With negative book value, declining revenues, and inconsistent profitability, Mid India Industries exemplifies the challenges facing small-scale, export-oriented textile manufacturers in an increasingly competitive global market."
Technical Analysis: Bearish Trend Signals Further Downside Risk
Technical indicators paint a uniformly bearish picture for Mid India Industries. The stock currently trades in a "BEARISH" trend, with the stock price of ₹7.63 positioned below all key moving averages—5-day (₹7.89), 20-day (₹7.70), 50-day (₹7.87), 100-day (₹7.82), and 200-day (₹8.12). This alignment of moving averages above the current price suggests sustained selling pressure and lack of buying support.
Multiple technical indicators confirm the negative outlook. The MACD indicator shows bearish signals on both weekly and monthly timeframes, whilst Bollinger Bands indicate bearish conditions weekly and mildly bearish conditions monthly. The Dow Theory suggests "Mildly Bearish" conditions on a monthly basis, with no clear trend on the weekly timeframe. Only the KST indicator shows a "Mildly Bullish" signal on the weekly timeframe, though this is contradicted by bearish monthly readings.
Key technical levels suggest limited near-term upside. Immediate support rests at ₹6.67 (the 52-week low), whilst immediate resistance appears at ₹7.70 (20-day moving average area). Major resistance zones exist at ₹7.82 (100-day moving average), ₹8.12 (200-day moving average), and the distant 52-week high of ₹12.00. The stock's position 36.42% below its 52-week high and only 14.39% above its 52-week low suggests greater downside risk than upside potential from current levels.
Investment Thesis: Below Average Quality Meets Risky Valuation
Mid India Industries' investment profile reflects a combination of fundamental weaknesses and elevated risk factors that justify its current proprietary score of 12 out of 100 and "STRONG SELL" rating. The company's "BELOW AVERAGE" quality grade stems from weak long-term financial performance, with five-year sales growth of negative 4.07%, minimal EBIT growth of 1.36%, and average ROE of 0.0%. The "RISKY" valuation grade reflects the negative book value, unsustainable P/E multiple, and absence of earnings visibility.
The financial trend is classified as "FLAT" for Q2 FY26, reflecting marginal improvements in some metrics offset by the return to losses. The technical trend remains firmly "BEARISH," with the stock trading below all major moving averages and multiple indicators signalling continued weakness. This combination of flat fundamentals and bearish technicals creates a challenging environment for potential investors.
Key Strengths & Risk Factors
Key Strengths
- No Promoter Pledging: Zero pledged shares eliminates one source of financial stress and demonstrates promoter commitment, albeit in a challenging business environment.
- Low Leverage: Debt-to-equity ratio of 0.01 indicates minimal formal borrowings, reducing interest burden and financial risk from debt servicing.
- Stable Promoter Holding: Consistent 50.71% promoter stake over recent quarters suggests long-term commitment, though this has not translated into operational improvements.
- Strategic Location: Proximity to cotton-growing regions in Madhya Pradesh provides theoretical raw material sourcing advantages, though this has not materialised into competitive advantage.
- Export Orientation: 100% export focus provides access to global markets, though this also exposes the company to international competition and demand volatility.
Key Concerns
- Negative Net Worth: Shareholder funds of negative ₹4.50 crores and book value per share of negative ₹2.76 represent fundamental balance sheet distress requiring restructuring.
- Inconsistent Profitability: Return to losses in Q2 FY26 after brief Q1 profit demonstrates inability to sustain positive earnings trajectory.
- Declining Revenues: Sequential 12.08% and year-on-year 15.48% revenue declines in Q2 FY26 signal weakening demand and competitive positioning.
- Negative Operating Margins: Operating margin of negative 0.76% in Q2 FY26 reflects fundamental cost structure issues and lack of pricing power.
- Zero Institutional Interest: Complete absence of FII and mutual fund holdings reflects professional investors' lack of confidence in turnaround prospects.
- Asset Base Erosion: Fixed assets declining from ₹1.23 crores (Mar'23) to ₹0.33 crores (Mar'25) indicates lack of reinvestment and potential operational constraints.
- Weak Return Metrics: Average ROE of 0.0% and average ROCE of 3.34% demonstrate poor capital efficiency and value destruction for equity holders.
Outlook: Limited Visibility for Sustainable Turnaround
The outlook for Mid India Industries remains challenging across multiple dimensions. The company's return to losses in Q2 FY26 after a brief profitable quarter in Q1 FY26 suggests operational improvements are fragile and unsustainable. With revenues declining both sequentially and year-on-year, the company faces fundamental demand challenges that appear structural rather than cyclical.
Positive Catalysts (Limited)
- Potential recovery in global textile demand could support revenue stabilisation
- Rupee depreciation might improve export competitiveness marginally
- Cost rationalisation initiatives could improve operating margins if implemented
- Promoter infusion of capital could address negative net worth, though no indication of such plans
Red Flags (Critical)
- Continued revenue decline trajectory with no visible turnaround strategy
- Inability to sustain positive operating margins even in favourable quarters
- Negative net worth requiring urgent capital infusion or restructuring
- Complete absence of institutional investor interest limiting liquidity and governance oversight
- Bearish technical indicators suggesting continued selling pressure
- Asset base erosion indicating lack of capacity for growth or modernisation
For the company to achieve sustainable turnaround, it would require: (1) significant capital infusion to address negative net worth, (2) operational restructuring to achieve consistent positive margins, (3) revenue growth through market share gains or product diversification, and (4) modernisation of asset base to improve competitiveness. None of these catalysts appear imminent based on available information, making the current "STRONG SELL" rating appropriate.
The Verdict: Avoid This Distressed Micro-Cap
Score: 12/100
For Fresh Investors: Avoid entirely. The negative net worth, inconsistent profitability, declining revenues, and absence of visible turnaround catalysts make this an unsuitable investment for any risk profile. The stock's classification as "RISKY" valuation and "BELOW AVERAGE" quality, combined with bearish technical trends, presents an unfavourable risk-reward equation.
For Existing Holders: Consider exiting positions at current levels or on any technical bounce towards ₹8.12 (200-day moving average). The return to losses in Q2 FY26 after brief Q1 profitability demonstrates the fragility of any operational improvements. With the stock down 22.70% over the past year and negative 45.19% over three years, holding onto hopes of recovery appears imprudent given fundamental deterioration.
Fair Value Estimate: Given the negative book value and inconsistent earnings, traditional valuation methodologies are not applicable. Any value assigned represents speculative turnaround potential rather than intrinsic worth. Current price of ₹7.63 appears unsupported by fundamentals, with downside risk towards the 52-week low of ₹6.67 more probable than upside towards resistance levels.
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. The views expressed are based on publicly available information as of November 17, 2025, and are subject to change. Past performance is not indicative of future results.
