Financial Trend Analysis
Pasupati Spinning & Weaving Mills reported a flat financial performance for the second quarter of the fiscal year 2025-26. Operating cash flow for the year stands at ₹4.37 crores, marking one of the lowest levels observed recently. Additionally, cash and cash equivalents at the half-year mark are recorded at ₹0.88 crores, indicating limited liquidity buffers. The company’s long-term financial strength appears constrained, with an average Return on Capital Employed (ROCE) of 4.25%, which suggests modest efficiency in generating returns from its capital base.
Net sales have expanded at an annual rate of 4.43% over the past five years, reflecting subdued growth relative to industry peers. The company’s capacity to service debt is also a concern, with a Debt to EBITDA ratio of 14.55 times, signalling elevated leverage and potential pressure on cash flows. These financial parameters collectively point to a cautious outlook on the company’s fundamental strength over the medium to long term.
Valuation Considerations
Despite the challenges in financial performance, Pasupati Spinning & Weaving Mills presents an attractive valuation profile. The company’s ROCE of 5.5% combined with an enterprise value to capital employed ratio of 1 indicates that the stock is trading at a discount relative to its capital base. This valuation is comparatively lower than the average historical valuations of its peers within the garments and apparels sector, suggesting potential value for investors seeking exposure to this segment.
Over the past year, the stock has generated a return of 4.74%, while profits have increased by approximately 80%. The price-to-earnings-to-growth (PEG) ratio stands at 0.1, which may imply that the market is pricing in limited growth expectations despite recent profit gains. This divergence between profit growth and stock returns highlights a nuanced valuation scenario that investors should carefully analyse.
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Technical Indicators and Market Trends
The technical outlook for Pasupati Spinning & Weaving Mills has shifted from a mildly bearish stance to a sideways trend, reflecting a more neutral market sentiment. Weekly Moving Average Convergence Divergence (MACD) readings are bullish, while monthly MACD remains mildly bearish, indicating mixed momentum signals across different time frames. The Relative Strength Index (RSI) on both weekly and monthly charts does not currently provide a definitive signal, suggesting a lack of strong directional momentum.
Bollinger Bands on the weekly chart show bullish tendencies, whereas the monthly chart indicates mild bullishness, reinforcing the sideways technical trend. Daily moving averages remain mildly bearish, which may temper short-term optimism. The Know Sure Thing (KST) indicator is bullish on a weekly basis but mildly bearish monthly, further underscoring the mixed technical picture.
Dow Theory analysis reveals no clear trend on the weekly chart and a mildly bearish stance monthly. Overall, the technical indicators suggest that the stock is consolidating, with neither strong upward nor downward momentum dominating recent trading sessions.
Stock Price and Market Performance
Pasupati Spinning & Weaving Mills closed at ₹35.60, up 1.71% from the previous close of ₹35.00. The stock’s 52-week high is ₹45.50, while the 52-week low is ₹28.88, indicating a wide trading range over the past year. Today’s intraday range was narrow, with a high of ₹35.70 and a low of ₹35.60, reflecting limited volatility in recent sessions.
When compared to the broader Sensex index, Pasupati’s returns present a mixed picture. Over one week and one month, the stock’s returns were -1.77% and -2.20% respectively, underperforming the Sensex’s marginal positive returns of -0.06% and 0.82%. Year-to-date, the stock has returned 2.30%, lagging behind the Sensex’s 8.65%. Over one year, Pasupati’s return of 4.74% trails the Sensex’s 7.31% gain. However, over longer horizons, the stock has outpaced the benchmark, with three-year returns of 43.84% versus 36.34% for the Sensex, and a notable five-year return of 318.82% compared to 90.69% for the index. The ten-year return of 137.49% remains below the Sensex’s 229.38%, indicating variability in performance across different time frames.
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Ownership and Industry Context
Pasupati Spinning & Weaving Mills operates within the garments and apparels sector, a segment characterised by competitive pressures and evolving consumer preferences. The company’s majority shareholding rests with promoters, which may influence strategic decisions and operational priorities. Within the textile industry, Pasupati’s performance and valuation metrics should be considered alongside sectoral trends and peer benchmarks to gain a comprehensive understanding of its market position.
Summary of Analytical Perspective Shift
The recent revision in the company’s evaluation reflects a nuanced balance of factors. Financially, the flat quarterly results and modest long-term growth rates temper enthusiasm, while the elevated debt servicing ratio raises caution. Valuation metrics, however, suggest the stock is trading at a discount relative to peers, supported by profit growth and a low PEG ratio. Technically, the shift to a sideways trend with mixed momentum indicators points to consolidation rather than clear directional movement.
Investors analysing Pasupati Spinning & Weaving Mills should weigh these diverse signals carefully. The company’s historical outperformance over multi-year periods contrasts with recent underperformance relative to the Sensex, highlighting the importance of time horizon in investment decisions. The interplay between valuation attractiveness and financial constraints will likely remain central to market assessments going forward.
Outlook and Considerations for Investors
Given the current market context, Pasupati Spinning & Weaving Mills presents a complex investment case. The company’s subdued financial trend and leverage concerns may warrant caution, while valuation discounts and profit growth offer potential opportunities. Technical indicators suggest a period of consolidation, which could precede either a breakout or further sideways movement depending on broader market conditions and company-specific developments.
Investors should monitor upcoming quarterly results, debt servicing capacity, and sectoral dynamics closely. Additionally, comparative analysis with peers and alternative investment options within the garments and apparels sector may provide further clarity on the stock’s relative appeal.
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