Iris Clothings (IRISDOREME)

FairStock Score: 39/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth of 45.81% shows strong demand and business momentum.
• ROCE of 17.89% indicates decent capital efficiency in an asset-light apparel business.
• Low debt-to-equity of 0.21 keeps financial risk moderate.
• Piotroski F-Score of 7/9 points to sound fundamentals and lower distress risk.
• Promoter holding of 61.17% aligns management with minority shareholders.

Concerns

• P/E of 43.12 and P/B of 5.18 leave no margin of safety.
• Profit growth of 27% trails sales growth; latest quarter net margin is only about 6%.
• Zero dividend yield means investors must rely entirely on capital gains.
• The apparel industry has low entry barriers, intense competition, and limited durable moat.

AI Analysis

Iris Clothings is a fast-growing apparel player, but I begin with price: ₹36.62, market cap ₹614 Cr. For a garments company, that demands a P/E of 43.12 and 5.18 times book value. Benjamin Graham taught that growth is not a substitute for value. Sales rose 45.81%, and profit is up 27%, yet the latest quarter tells the real story: ₹49 Cr in revenue produced only ₹3 Cr in net profit, roughly a 6% margin. Apparel is a fiercely competitive, low-moat business where style shifts quickly and buyers hold power. Still, a 17.89% ROCE is respectable, and debt-to-equity of 0.21 shows the balance sheet is not reckless. Promoter holding of 61.17% aligns owners with public shareholders, and a Piotroski score of 7/9 suggests the financial health is sound. My concern is price. Paying 43 times earnings for a 27% profit grower leaves little room for error. The advanced PEG of 1.18 looks acceptable only if the high growth continues for several years. In my experience, apparel brands rarely deliver such linear, dependable compounding; competition and shifting fashion squeeze margins. With zero dividend, all returns must come from share price gains, adding risk. FairStock score of 40/100 labels it mixed, which seems correct. This is a fast grower, not a Graham-style bargain. I would not buy here without a wider margin of safety. If you own it, monitor every quarter. If you don't, put it on the watchlist and wait for a better price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer