The company, which manufactures colour and black-and-white television sets alongside critical TV components, has struggled to maintain profitability amidst challenging market conditions. The stock closed at ₹34.02 on February 06, 2026, down 2.80% from the previous day's close of ₹35.00, trading significantly below all major moving averages and reflecting persistent bearish sentiment. The company's book value stands at ₹74.63 per share, implying the stock trades at a steep 54% discount to its book value at 0.54x price-to-book ratio.
Financial Performance: Persistent Losses Erode Shareholder Value
Salora International's financial performance over recent years paints a troubling picture of sustained operational distress. For the financial year ending March 2019, the company reported net sales of ₹175.00 crores, representing a 37.80% year-on-year increase from ₹127.00 crores in FY18. However, this revenue growth failed to translate into profitability, with the company posting a net loss of ₹5.00 crores in FY19 compared to a loss of ₹10.00 crores in the previous year.
The operating profit margin excluding other income stood at a meagre 3.40% in FY19, a significant improvement from the negative 3.90% margin in FY18, yet still reflecting extremely thin profitability at the operational level. The company's profit after tax margin remained deeply negative at -2.90% in FY19, demonstrating the fundamental challenge in converting revenues into bottom-line profits. Interest costs of ₹7.00 crores in FY19 continued to burden the income statement, whilst depreciation charges of ₹2.00 crores further compressed already negative pre-tax profits.
Looking at the broader historical context, the company has struggled with consistent profitability over the past six years. Between FY14 and FY19, net sales declined from ₹393.00 crores to ₹175.00 crores, representing a compound annual decline that underscores severe market share erosion and operational challenges. The five-year sales growth rate of just 1.51% reflects stagnation in the company's core business activities.
| Period | Net Sales (₹ Cr) | YoY Growth | Operating Margin | Net Profit (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| FY19 (Mar'19) | 175.00 | +37.80% | 3.40% | -5.00 | -2.90% |
| FY18 (Mar'18) | 127.00 | -60.30% | -3.90% | -10.00 | -7.90% |
| FY17 (Mar'17) | 320.00 | +3.90% | 0.90% | -2.00 | -0.60% |
| FY16 (Mar'16) | 308.00 | +5.50% | 2.30% | 0.00 | 0.00% |
| FY15 (Mar'15) | 292.00 | -25.70% | 2.40% | 0.00 | 0.00% |
| FY14 (Mar'14) | 393.00 | N/A | 1.30% | 1.00 | 0.30% |
Operational Challenges: Weak Profitability and Capital Inefficiency
Salora International's operational metrics reveal fundamental weaknesses that explain the company's persistent inability to generate shareholder value. The return on equity (ROE) stands at an alarming 0.00%, indicating the company has failed to generate any returns on shareholder capital over the measurement period. This represents one of the most critical red flags for investors, as it demonstrates complete capital inefficiency and the destruction of shareholder wealth.
The return on capital employed (ROCE) paints an equally concerning picture at -5.28% on average and -1.95% for the latest period, meaning the company generates negative returns on the total capital deployed in the business. This metric, calculated as EBIT minus other income divided by capital employed minus cash and current investments, shows the company is destroying value on its operational assets. The negative ROCE indicates that even before considering the cost of debt and equity, the business operations are fundamentally unprofitable.
Critical Profitability Concerns
Return on Equity: At 0.00%, the company has generated no returns for shareholders, representing complete capital inefficiency and wealth destruction over the measurement period.
Return on Capital Employed: At -1.95% (latest) and -5.28% (average), the company destroys value on operational assets, indicating fundamental business model challenges that require urgent strategic intervention.
Interest Coverage: Average EBIT to interest ratio of -3.08x means the company cannot service its debt obligations from operating profits, raising serious solvency concerns.
The company's interest coverage ratio stands at a deeply negative -3.08x on average, meaning operating profits are insufficient to cover interest expenses. This creates a dangerous debt spiral where the company must rely on additional borrowing or equity dilution to service existing debt obligations. With interest costs of ₹7.00 crores in FY19 against operating losses, the financial structure appears increasingly unsustainable.
On the balance sheet front, shareholder funds declined from ₹113.47 crores in FY14 to ₹65.78 crores in FY19, representing a 42% erosion of net worth over five years due to accumulated losses. Long-term debt increased from ₹9.01 crores to ₹16.49 crores during the same period, whilst current liabilities surged from ₹64.53 crores to ₹94.05 crores, driven primarily by ballooning trade payables that jumped from ₹20.89 crores to ₹39.24 crores. This deteriorating balance sheet reflects growing vendor pressure and working capital stress.
Market Context: Severe Underperformance Across All Timeframes
Salora International's stock performance has been catastrophic across virtually all measurement periods, significantly underperforming both the broader market and its sectoral peers. Over the past year, the stock has plummeted 46.00%, generating a negative alpha of 53.07 percentage points versus the Sensex's positive 7.07% return. This massive underperformance reflects sustained investor pessimism about the company's prospects and fundamental business challenges.
The medium-term picture is equally grim, with the stock declining 55.25% over two years versus the Sensex's 15.78% gain, producing a negative alpha of 71.03 percentage points. Over three years, whilst the Sensex surged 38.13%, Salora International declined 1.68%, underperforming by 39.81 percentage points. Even the five-year performance, which shows a nominal 31.86% gain, dramatically underperformed the Sensex's 64.75% return by 32.89 percentage points.
| Period | Stock Return | Sensex Return | Alpha | Sector Return |
|---|---|---|---|---|
| 1 Day | -2.80% | 0.32% | -3.12% | — |
| 1 Week | -2.24% | 1.59% | -3.83% | — |
| 1 Month | -7.68% | -1.74% | -5.94% | — |
| 3 Months | -20.37% | 0.32% | -20.69% | — |
| 6 Months | -20.33% | 3.77% | -24.10% | — |
| 1 Year | -46.00% | 7.07% | -53.07% | -18.76% |
| 2 Years | -55.25% | 15.78% | -71.03% | — |
| 3 Years | -1.68% | 38.13% | -39.81% | — |
Notably, the stock has underperformed its Trading & Distributors sector by 27.24 percentage points over the past year, with the sector declining 18.76% compared to Salora's 46.00% plunge. This suggests company-specific issues beyond general sectoral headwinds. The stock currently trades at ₹34.02, down from a 52-week high of ₹64.50 (47.26% below peak) and just 11.54% above its 52-week low of ₹30.50, indicating the stock is trading near multi-year lows.
From a technical perspective, the stock remains in a confirmed bearish trend as of February 06, 2026, trading below all key moving averages: 5-day MA (₹34.37), 20-day MA (₹35.45), 50-day MA (₹36.03), 100-day MA (₹39.67), and 200-day MA (₹41.89). Both MACD and KST indicators flash bearish signals on weekly and monthly timeframes, whilst Bollinger Bands suggest mildly bearish momentum. The stock's beta of 1.18 indicates higher volatility than the broader market, classified as a high-beta stock with 60.93% annualised volatility.
Peer Comparison: Weakest Link in Sector
When benchmarked against peers in the Trading & Distributors sector, Salora International emerges as the weakest performer across virtually all key metrics. The company's return on equity of 0.00% compares unfavourably to peers such as Chandra Prasad International (19.05%), Medico Intercontinental (13.98%), Continental India (12.95%), and Newtrac Foods (16.01%). This massive gap in capital efficiency underscores fundamental operational challenges that set Salora apart from healthier competitors.
| Company | P/E (TTM) | P/BV | ROE | Debt/Equity | Market Cap |
|---|---|---|---|---|---|
| Salora Intl. | NA (Loss Making) | 0.54x | 0.00% | 0.40 | ₹31 Cr |
| Chandra Pr. Intl | NA (Loss Making) | 0.77x | 19.05% | 1.16 | — |
| Medico Intercon. | 3515.00x | 0.74x | 13.98% | 1.37 | — |
| Gini Silk Mills | 19.31x | 0.69x | 3.31% | -0.01 | — |
| Contil India | 14.60x | 2.73x | 12.95% | 0.00 | — |
| Newtrac Foods | 79.61x | 2.78x | 16.01% | -0.08 | — |
The company's price-to-book value ratio of 0.54x appears superficially attractive compared to peers like Continental India (2.73x) and Newtrac Foods (2.78x), but this discount reflects justified concerns about asset quality and earning power rather than a genuine value opportunity. The market is essentially pricing in significant doubt about the company's ability to generate economic value from its asset base. With a market capitalisation of just ₹31.00 crores, Salora International ranks at the bottom of its peer group, classified as a micro-cap stock with associated liquidity and volatility risks.
Valuation Analysis: Deep Discount Reflects Fundamental Concerns
Salora International's valuation metrics present a complex picture where apparent cheapness masks deeper fundamental problems. The stock trades at 0.54x price-to-book value, representing a 46% discount to book value of ₹74.63 per share. However, this discount should not be interpreted as a value opportunity but rather as the market's rational assessment of impaired asset quality and questionable going-concern viability given persistent losses.
Traditional valuation multiples like price-to-earnings ratio are not applicable given the company's loss-making status. The enterprise value to EBITDA ratio stands at -22.11x, whilst EV to EBIT is -20.05x—both negative due to operating losses. The enterprise value to sales ratio of 0.40x appears low but provides little comfort when the company cannot convert revenues into profits. The EV to capital employed ratio of 0.67x suggests the market values the business at a significant discount to the capital invested, reflecting doubts about the productive deployment of those assets.
The company's overall valuation assessment is classified as "RISKY" by analytical frameworks, having maintained this designation since April 2023 with brief interruptions. This classification reflects the combination of operational losses, weak balance sheet, and uncertain turnaround prospects. The absence of dividend payments since July 2009 (last dividend of ₹1.00 per share) further underscores the company's inability to generate distributable cash flows.
Shareholding Pattern: Stable Promoter Base Amidst Zero Institutional Interest
The shareholding pattern of Salora International reveals a company with stable promoter ownership but virtually no institutional participation, reflecting the lack of confidence from sophisticated investors. Promoter holding has remained steady at 73.76% across the last five quarters from December 2024 through December 2025, with no sequential changes. This stability suggests promoters remain committed to the business despite operational challenges, though it also means no fresh capital infusion from promoter groups.
| Quarter | Promoter | FII | Mutual Funds | Insurance | Other DII | Non-Institutional |
|---|---|---|---|---|---|---|
| Dec'25 | 73.76% | 0.00% | 0.00% | 0.00% | 0.00% | 26.24% |
| Sep'25 | 73.76% | 0.00% | 0.00% | 0.00% | 0.00% | 26.24% |
| Jun'25 | 73.76% | 0.00% | 0.00% | 0.00% | 0.00% | 26.24% |
| Mar'25 | 73.76% | 0.00% | 0.00% | 0.00% | 0.00% | 26.24% |
| Dec'24 | 73.76% | 0.00% | 0.00% | 0.00% | 0.00% | 26.24% |
The complete absence of foreign institutional investor (FII) holdings at 0.00%, mutual fund participation at 0.00%, insurance company holdings at 0.00%, and other domestic institutional investor (DII) holdings at 0.00% is highly significant. Total institutional holding stands at a negligible 0.01%, indicating that sophisticated institutional investors have completely shunned the stock due to fundamental concerns about business viability and governance.
The non-institutional shareholding of 26.24% has remained stable, comprising primarily retail investors and potentially high-net-worth individuals. Key promoters include Gopal Sitaram Jiwarajka (31.44%), Gopal Kumar Jiwarajka (17.02%), Neetu Jiwarajka (8.30%), and Manori Properties Pvt. Ltd. (6.35%), with the Jiwarajka family maintaining consolidated control. Positively, there is no promoter pledging, eliminating one potential risk factor, though this provides limited comfort given the operational challenges.
Investment Thesis: Multiple Red Flags Signal Caution
Salora International's investment thesis is fundamentally challenged by a confluence of negative factors across valuation, quality, financial trends, and technical indicators. The proprietary analytical score of 17 out of 100 places the company firmly in "Strong Sell" territory (0-30 range), reflecting severe concerns about the business's viability and investment attractiveness.
The quality assessment grades the company as "Below Average," reflecting weak long-term financial performance characterised by stagnant sales growth of 1.51% over five years, negative average ROCE of -5.28%, and zero return on equity. The financial trend is classified as "Negative" as of December 2025, driven by a 48.70% sequential decline in quarterly net sales versus the previous four-quarter average. The technical trend remains firmly "Bearish," with the stock trading below all major moving averages and multiple indicators flashing sell signals.
Key Strengths & Risk Factors
Limited Positives
- Stable Promoter Base: 73.76% promoter holding with no pledging demonstrates family commitment to the business
- No Pledged Shares: Zero promoter pledging eliminates one potential risk factor
- Improving Operating Margins: FY19 operating margin of 3.40% improved from -3.90% in FY18
- Revenue Recovery: FY19 sales of ₹175 crores marked 37.80% growth from depressed FY18 base
- Valuation Discount: Trading at 0.54x book value provides potential downside protection if turnaround materialises
Critical Risk Factors
- Persistent Losses: Company remains loss-making with -₹5.00 crores net loss in FY19
- Zero Return on Equity: 0.00% ROE indicates complete failure to generate shareholder returns
- Negative ROCE: -1.95% latest ROCE shows value destruction on operational assets
- Weak Interest Coverage: -3.08x average EBIT-to-interest ratio raises solvency concerns
- Deteriorating Balance Sheet: Shareholder funds declined 42% from ₹113.47 crores (FY14) to ₹65.78 crores (FY19)
- No Institutional Interest: 0.01% institutional holding reflects zero confidence from sophisticated investors
- Severe Stock Underperformance: 46.00% decline over one year with -53.07% alpha versus Sensex
- Bearish Technical Setup: Trading below all moving averages with confirmed bearish trend
- Micro-Cap Liquidity Risk: ₹31 crore market cap with thin trading volumes
- No Dividends Since 2009: 17-year dividend drought underscores cash generation challenges
Outlook: What to Watch
Potential Positive Catalysts
- Sustained improvement in operating margins beyond 5% for multiple quarters
- Return to profitability with positive net profit for consecutive quarters
- Reduction in debt levels and improved interest coverage above 2x
- Institutional investor participation indicating improved confidence
- Strategic restructuring or business model pivot to address structural challenges
Critical Red Flags
- Further deterioration in quarterly sales or widening losses
- Breach of debt covenants or inability to service interest obligations
- Any promoter share pledging or dilutive capital raising
- Continued institutional investor exodus or insider selling
- Stock breaking below ₹30.50 support (52-week low)
- Working capital crisis indicated by rising creditor days or supplier disputes
The Verdict: Avoid This Value Trap
Overall Score: 17/100
For Fresh Investors: Avoid initiating any position. The combination of persistent losses, zero return on equity, negative ROCE, deteriorating balance sheet, and complete absence of institutional interest creates an extremely high-risk profile. The apparent valuation discount at 0.54x book value is a classic value trap reflecting justified concerns about business viability rather than a genuine opportunity.
For Existing Holders: Consider exiting positions at current levels or on any technical bounce. The 46.00% decline over the past year may tempt some to hold hoping for recovery, but the fundamental deterioration across all key metrics—profitability, capital efficiency, balance sheet strength, and cash generation—suggests further downside risk. The negative financial trend, bearish technical setup, and zero institutional participation indicate limited near-term catalysts for recovery.
Fair Value Estimate: Given the loss-making status, negative returns on capital, and structural business challenges, traditional valuation methodologies are not applicable. The current market price of ₹34.02 already reflects significant distress, trading at 0.54x book value. Any potential recovery would require fundamental business transformation, return to sustained profitability, and demonstrated ability to generate positive returns on capital—outcomes that appear highly uncertain based on the six-year track record of value destruction.
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. Past performance is not indicative of future results, and all investments carry risk of loss.
