Zodiac Cloth. Co (ZODIACLOTH)

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

Key Financials

Strengths

• Price near book value (P/B 1.06) offers some asset downside support.
• High promoter holding of 72.93% aligns management with shareholders.
• Piotroski F-score of 5/9 indicates moderate financial health.
• Debt/equity of 0.62 is manageable at current levels.
• Reported profit growth of 14.96%, though from a loss base, shows some improvement.

Concerns

• Negative ROE of -17.21% and ROCE of -8.18% indicate value destruction.
• Sales are declining at -9.77%, and the latest quarter shows a net loss of ₹9 Cr.
• P/E is meaningless due to zero/negative earnings, and no dividend is being paid.
• No clear economic moat in a highly competitive garments and apparels industry.

AI Analysis

Benjamin Graham often said price is what you pay, value is what you get. At ₹79.89, with book value of ₹75.50, Zodiac Cloth looks like a stock near its asset floor. But a reasonable price-to-book is not enough. The business earns a return on equity of -17.21% and a return on capital employed of -8.18%. That means every rupee retained in the business is being put to work at a loss. Sales are down 9.77%, and the latest quarter shows a net loss of ₹9 Cr on revenue of just ₹41 Cr. With no earnings, the reported P/E of 0.00 is meaningless; there is no earnings yield to protect the investor. Debt-to-equity of 0.62 is moderate, but with negative ROCE, debt becomes a heavier burden. This is a garment and apparel company, an industry with intense competition, low pricing power, and little room for durable moats. I do not see a competitive advantage here. On the positive side, promoter holding is 72.93%, so those managing the company have skin in the game. The Piotroski score of 5/9 suggests some financial soundness, and the reported profit growth of 14.96% is a mild positive—but it comes from a loss-making base and should not be overread. This is not the kind of wonderful business I prefer to buy. It is a turnaround candidate, or at best an asset-backed situation. If management can stabilise sales, reduce losses, and eventually push ROE into positive territory, the current price may offer acceptable downside protection. But I need evidence of sustained improvement, not just a cheap-looking balance sheet. I would wait on the sidelines until the operating engine starts generating real returns.

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