Hindoostan Mills Ltd Reports Flat Quarterly Performance Amid Margin Pressures

Quarterly Financial Performance: A Mixed Bag

For the quarter ended December 2025, Hindoostan Mills Ltd recorded an earnings per share (EPS) of Rs -2.53, marking its highest quarterly EPS in recent periods. This improvement has contributed to a shift in the company’s financial trend score from a negative -14 to a flat -5 over the past three months, indicating a halt in the previous downward trajectory. However, the company’s profit before tax excluding other income (PBT less OI) remained in negative territory at Rs -0.24 crore, underscoring ongoing operational challenges.

On the profitability front, the nine-month period saw a significant contraction in profit after tax (PAT), which stood at Rs 4.11 crore, reflecting a steep decline of 69.85% compared to the previous corresponding period. This sharp drop highlights the persistent margin pressures faced by the company amid a competitive garments and apparels market.

Working Capital and Liquidity Concerns

Liquidity metrics also paint a cautious picture. The company’s cash and cash equivalents at the half-year mark were at a low of Rs 4.00 crore, limiting its financial flexibility. Additionally, the debtors turnover ratio, a key indicator of receivables management efficiency, was at its lowest level of 5.15 times, suggesting slower collection cycles and potential strain on working capital.

Stock Price and Market Returns

Hindoostan Mills Ltd’s stock price closed at Rs 177.85 on 11 February 2026, up 3.58% from the previous close of Rs 171.70. The intraday trading range was between Rs 170.05 and Rs 180.00, with the 52-week high and low at Rs 224.55 and Rs 154.00 respectively. Despite the recent uptick, the stock’s longer-term returns remain underwhelming when compared to the broader market benchmark, the Sensex.

Over the past year, the stock has declined by 15.29%, while the Sensex gained 9.01%. The three-year and five-year returns for Hindoostan Mills Ltd are deeply negative at -25.27% and -30.77% respectively, contrasting sharply with Sensex’s robust gains of 38.88% and 64.25% over the same periods. The ten-year performance further emphasises this divergence, with the stock down 50.57% against the Sensex’s 254.70% rise.

Mojo Score and Analyst Ratings

Hindoostan Mills Ltd currently holds a Mojo Score of 33.0, which corresponds to a Mojo Grade of Sell. This represents an upgrade from its previous Strong Sell rating as of 2 September 2024, reflecting some stabilisation in financial performance. The company’s market capitalisation grade stands at 4, indicating a micro-cap status within the Garments & Apparels sector. Despite the recent improvement in score, the overall outlook remains cautious given the persistent challenges in profitability and working capital.

Industry Context and Sectoral Challenges

The garments and apparels industry has been navigating a complex environment characterised by fluctuating raw material costs, evolving consumer preferences, and intense competition from both domestic and international players. For Hindoostan Mills Ltd, these factors have translated into margin pressures and subdued revenue growth. The flat financial trend observed in the latest quarter suggests the company is currently in a consolidation phase, attempting to stabilise operations before pursuing growth.

Comparative Performance and Strategic Outlook

When benchmarked against peers in the garments and apparels sector, Hindoostan Mills Ltd’s financial metrics lag behind industry averages, particularly in terms of margin expansion and working capital efficiency. The company’s low cash reserves and deteriorated debtor turnover ratio highlight the need for improved operational discipline and cash flow management.

Investors should note that while the EPS improvement to Rs -2.53 is a positive sign, the continued negative PBT and sharp PAT decline over nine months indicate that profitability recovery remains a work in progress. The stock’s recent price appreciation of 3.58% may reflect short-term optimism, but the longer-term return profile remains challenging.

Investor Takeaway

Hindoostan Mills Ltd’s recent quarterly results indicate a tentative stabilisation in financial performance after a period of decline. The flat trend score improvement and highest quarterly EPS to date are encouraging signs. However, the company’s profitability remains under pressure, with a significant PAT contraction and negative PBT excluding other income. Liquidity constraints and working capital inefficiencies further complicate the outlook.

Given the stock’s underperformance relative to the Sensex over multiple time horizons, investors should approach with caution. The current Mojo Grade of Sell reflects these concerns, suggesting that the stock may not yet be ready for a sustained recovery. Prospective investors would be well advised to monitor upcoming quarterly results closely for signs of margin expansion and improved cash flow before considering exposure.

In summary, while Hindoostan Mills Ltd shows signs of halting its financial deterioration, the path to meaningful growth and profitability remains uncertain amid sectoral headwinds and internal challenges.

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