Garment Mantra Lifestyle Ltd: Valuation Shift Enhances Price Attractiveness Amid Mixed Returns

Valuation Metrics Show Positive Recalibration

Garment Mantra’s current price-to-earnings (P/E) ratio stands at 7.94, reflecting a modest discount relative to many peers in the garments and apparels sector. This is a slight improvement from previous levels and positions the stock as attractively valued compared to industry heavyweights. The price-to-book value (P/BV) ratio is 1.09, indicating the market values the company’s net assets close to book value, a sign of reasonable valuation without excessive premium.

Enterprise value to EBITDA (EV/EBITDA) is recorded at 9.38, which is competitive within the sector, especially when contrasted with several peers trading at significantly higher multiples. For instance, R&B Denims and SBC Exports are classified as very expensive with EV/EBITDA multiples of 34.37 and 50.97 respectively, underscoring Garment Mantra’s relative valuation appeal.

Additionally, the company’s PEG ratio is an exceptionally low 0.04, suggesting that earnings growth expectations are not fully priced in, which could be an attractive feature for value-oriented investors seeking growth at a reasonable price.

Comparative Peer Analysis

When compared with other companies in the garments and apparels sector, Garment Mantra’s valuation stands out for its affordability. Himatsingka Seide, another peer, holds a very attractive valuation with a P/E of 8.33 and EV/EBITDA of 8.82, slightly higher than Garment Mantra but still within a similar range. Conversely, companies such as Sumeet Industries and Pashupati Cotsp. trade at P/E multiples above 70 and 90 respectively, reflecting a very expensive valuation tier.

Sportking India, also rated attractive, trades at a higher P/E of 11.68 but a lower EV/EBITDA of 7.04, indicating some variation in capital structure and earnings quality across the sector. Indo Rama Synthetics, another attractive peer, has a P/E of 8.03 and EV/EBITDA of 7.54, reinforcing the notion that Garment Mantra is competitively priced within its peer group.

Financial Performance and Returns Context

Garment Mantra’s return metrics present a mixed picture. The stock has surged 19.57% in the past week and 38.66% over the last month, vastly outperforming the Sensex’s 2.94% and 0.59% returns over the same periods. Year-to-date, the stock remains positive with a 20.44% gain, while the Sensex has declined by 1.36%. However, over longer horizons, the stock has underperformed; it has declined 2.82% over one year and 9.30% over three years, compared to Sensex gains of 7.97% and 38.25% respectively. The five-year return is notably negative at -50.85%, contrasting sharply with the Sensex’s 63.78% rise. Over a decade, however, Garment Mantra has delivered a robust 325.17% return, outpacing the Sensex’s 249.97% gain, highlighting its long-term growth potential despite recent volatility.

Quality and Profitability Metrics

Despite the improved valuation, Garment Mantra’s profitability metrics remain modest. The latest return on capital employed (ROCE) is 5.80%, while return on equity (ROE) stands at 7.67%. These figures are below sector averages, reflecting operational challenges or capital inefficiencies that may be weighing on investor sentiment. The absence of a dividend yield further limits income appeal, although the company’s low valuation multiples may compensate for this in the eyes of value investors.

The enterprise value to capital employed ratio is 1.07, indicating the market values the company’s capital base close to its book value, consistent with the P/BV ratio. The EV to sales ratio is a low 0.41, underscoring the stock’s inexpensive nature relative to revenue generation.

Market Capitalisation and Analyst Sentiment

Garment Mantra holds a market cap grade of 4, reflecting its micro-cap status within the garments and apparels sector. The company’s Mojo Score has improved to 40.0, prompting an upgrade in its Mojo Grade from a strong sell to a sell as of 14 Nov 2025. This upgrade signals a cautious but positive shift in analyst sentiment, recognising the improved valuation and recent price momentum while acknowledging ongoing risks.

Investors should note that while the valuation has become more attractive, the company’s fundamental quality metrics and longer-term return profile suggest a need for careful consideration before committing capital.

Price Movement and Trading Range

The stock closed at ₹1.65 on 10 Feb 2026, up 19.57% from the previous close of ₹1.38. The day’s trading range was ₹1.52 to ₹1.65, with the 52-week high at ₹2.11 and low at ₹1.05. This recent price appreciation reflects renewed investor interest, likely driven by the improved valuation and positive short-term momentum.

However, the stock’s longer-term price performance remains subdued relative to the broader market, emphasising the importance of monitoring fundamental improvements alongside valuation shifts.

Investment Implications

Garment Mantra Lifestyle Ltd’s transition from a very attractive to an attractive valuation grade suggests that the stock is becoming more reasonably priced, potentially offering a value entry point for investors willing to accept moderate profitability and micro-cap risks. The low P/E and PEG ratios indicate that the market may be underestimating future earnings growth, while the EV multiples confirm the stock’s relative affordability within the garments and apparels sector.

Nevertheless, investors should weigh these valuation benefits against the company’s modest returns on capital and mixed historical performance. The recent upgrade in Mojo Grade to a sell from a strong sell reflects this balanced view, signalling cautious optimism rather than a full endorsement.

For those seeking exposure to the garments and apparels sector, Garment Mantra presents an intriguing micro-cap opportunity with improving valuation metrics but requires careful monitoring of operational and market developments.

Conclusion

In summary, Garment Mantra Lifestyle Ltd’s valuation parameters have shifted favourably, enhancing its price attractiveness amid a backdrop of strong short-term price gains. While the company remains modest in profitability and has underperformed over longer periods, the improved P/E, P/BV, and EV/EBITDA ratios relative to peers provide a compelling case for value investors. The recent Mojo Grade upgrade to sell from strong sell further supports a cautiously positive outlook, suggesting that the stock may be poised for a recovery phase if operational metrics improve.

Investors should continue to track the company’s financial performance and sector dynamics closely to capitalise on potential upside while managing inherent micro-cap risks.

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