Cantabil Retail India Ltd Valuation Shifts to Fair: A Detailed Market Analysis

Valuation Metrics Reflect Improved Price Attractiveness

As of 18 Feb 2026, Cantabil Retail India Ltd trades at a price of ₹293.20, down 1.76% from the previous close of ₹298.45. The stock’s 52-week range spans from ₹213.00 to ₹321.50, indicating a recovery from its lows and a recent consolidation near the upper band. The company’s price-to-earnings (P/E) ratio currently stands at 27.55, a figure that has contributed to its reclassification from an expensive to a fair valuation grade by MarketsMOJO.

Complementing the P/E ratio, the price-to-book value (P/BV) is at 5.99, which, while elevated, aligns with sector norms for established garment and apparel firms. The enterprise value to EBITDA (EV/EBITDA) ratio is 12.04, reflecting a moderate premium relative to peers. These valuation multiples suggest that while the stock is not a bargain basement buy, it is reasonably priced given its growth prospects and profitability metrics.

Comparative Peer Analysis Highlights Relative Fairness

When compared with key industry peers, Cantabil’s valuation appears balanced. For instance, Vardhman Textile and Welspun Living also hold fair valuation tags, with P/E ratios of 18.42 and 56.69 respectively, and EV/EBITDA multiples of 12.21 and 17.83. Arvind Ltd, rated very attractive, trades at a lower P/E of 23.52 and EV/EBITDA of 12.02, indicating a more compelling valuation on a relative basis. Conversely, companies like Garware Tech and Indo Count Industries are classified as very expensive or fair but with significantly higher P/E ratios, suggesting Cantabil’s valuation is competitive within its sector.

Notably, some peers such as Swan Corp and Alok Industries are flagged as risky due to loss-making status, underscoring Cantabil’s relative financial stability.

Robust Financial Performance Supports Valuation

Cantabil’s return on capital employed (ROCE) is a healthy 14.75%, while return on equity (ROE) stands at 21.74%, both indicators of efficient capital utilisation and strong profitability. The PEG ratio of 0.98 further implies that the stock’s price is reasonably aligned with its earnings growth potential, a positive sign for investors seeking growth at a fair price.

Dividend yield remains modest at 0.34%, reflecting the company’s focus on reinvestment and growth rather than high payout ratios. This is consistent with the garment and apparel sector’s typical capital allocation strategies.

Stock Performance Outpaces Broader Market Benchmarks

Over multiple time horizons, Cantabil Retail has outperformed the Sensex, reinforcing its investment appeal. The stock delivered a 12.51% return over the past year compared to the Sensex’s 9.81%, and an impressive 41.73% over three years versus the Sensex’s 36.80%. The five-year return of 287.83% dwarfs the Sensex’s 61.40%, while the ten-year return of 2001.79% is extraordinary against the benchmark’s 256.90%.

Shorter-term performance shows some volatility, with a 1-week decline of 2.79% against the Sensex’s 0.98% drop, but a positive 1-month return of 1.05% compared to the Sensex’s slight fall of 0.14%. Year-to-date, Cantabil has gained 3.60%, outperforming the Sensex’s negative 2.08% return.

Mojo Score Upgrade Reflects Improved Market Sentiment

MarketsMOJO has upgraded Cantabil Retail’s Mojo Grade from Sell to Hold as of 01 Jan 2026, with a current Mojo Score of 68.0. This upgrade reflects the company’s improved valuation profile and steady financial performance. The market capitalisation grade remains modest at 3, indicating a mid-sized company with room for growth and market recognition.

The downgrade in valuation grade from expensive to fair is a key driver behind this sentiment shift, signalling that investors may now find the stock more reasonably priced relative to its earnings and asset base.

Valuation Multiples in Context of Industry Dynamics

The garment and apparel sector is characterised by cyclical demand and evolving consumer preferences, which can impact earnings visibility and valuation multiples. Cantabil’s current P/E of 27.55 is slightly above the sector average but justified by its superior ROE and consistent earnings growth. The EV/EBITDA multiple of 12.04 is in line with industry peers, suggesting the market is valuing the company’s operational cash flows fairly.

Investors should note that while the PEG ratio below 1.0 indicates undervaluation relative to growth, the relatively low dividend yield suggests a growth-oriented capital allocation strategy rather than income generation.

Risks and Considerations for Investors

Despite the positive valuation shift, Cantabil Retail faces sector-specific risks including raw material price volatility, competitive pressures, and changing fashion trends. The recent 1-week price decline of 2.79% highlights short-term market sensitivity. Additionally, the stock’s P/BV ratio near 6.0 may be considered high by value investors, signalling the need for cautious entry points.

However, the company’s strong returns over longer periods and improved valuation grade provide a compelling case for investors with a medium to long-term horizon.

Conclusion: Fair Valuation Enhances Investment Appeal

Cantabil Retail India Ltd’s transition from an expensive to a fair valuation grade marks a significant development for investors seeking exposure to the garments and apparels sector. Supported by robust profitability metrics, a reasonable PEG ratio, and strong relative returns versus the Sensex, the stock now presents a more balanced risk-reward profile.

While short-term price fluctuations and sector risks remain, the company’s improved valuation multiples and upgraded Mojo Grade to Hold suggest that Cantabil Retail is positioned for steady performance in the coming quarters. Investors should monitor valuation trends and sector dynamics closely to capitalise on potential upside while managing downside risks.

Overall, Cantabil Retail’s valuation realignment enhances its attractiveness as a core holding within the garment and apparel space, particularly for those favouring companies with solid fundamentals and reasonable pricing.

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