Precot Ltd. (PRECOT) AI Stock Analysis

• Market Cap: ₹5.67B
• Dividend Yield: 0.7%
• Average Volume (3M): 5.89K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 1.30
• Revenue Growth: -8.05%
• EPS Growth: -23.39%
• Country: IN
• Employees: 2,224
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Apparel - Manufacturers
• EPS (TTM): 5.86
• Shares Outstanding: 12,000,000
• 10 Day Avg. Volume: 9,661
• 30 Day Avg. Volume: 5,894
• PEG Ratio: 0.17
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 13.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ₹423.00 ▲(9.77% Upside)

The score is primarily supported by stable-to-improving fundamentals (better operating margins and positive operating cash flow) but held back by inconsistent revenue growth, leverage risk, and mixed technical signals (negative MACD and price still below longer-term moving averages). Valuation is reasonable on P/E, though the dividend yield is low.

Positive Factors

Improving operating margins

Sustained improvement in gross and EBIT/EBITDA margins indicates the company is capturing cost efficiencies and improving operating leverage. Over a multi-month horizon this supports durable profitability, better cash generation and capacity to withstand raw-material volatility in cotton markets.

Positive operating cash flow

Consistent positive operating cash flow demonstrates core business cash generation, enabling funding for working capital, routine capex and debt servicing without recurring external financing. This underpins financial resilience and operational continuity over the next several months.

Moderate balance sheet stability

A balanced debt-to-equity structure and solid equity ratio provide an asset base to support operations and growth. This structural stability improves access to credit and cushions shocks, helping maintain production and supplier terms across a 2–6 month horizon.

Negative Factors

Inconsistent revenue growth

Declining and inconsistent top-line growth undermines scale benefits and puts pressure on fixed-cost absorption. Over the medium term weaker revenue trends risk margin erosion, reduced bargaining power with buyers, and slower recovery of working capital tied to seasonal textile cycles.

Relatively high total debt

Elevated absolute debt increases interest and refinancing vulnerability, reducing strategic flexibility. In a sector exposed to input-price swings and cyclical demand, higher leverage can constrain investment, amplify earnings volatility and pressure liquidity over coming months.

Unstable free cash flow

Volatile free cash flow due to uneven capex makes reinvestment, debt reduction and dividend policy unpredictable. This inconsistency can force reliance on external funding for growth or working capital, weakening balance-sheet resilience during downturns or cotton-cost spikes.

Precot Ltd. Business Overview & Revenue Model

Company Description

Precot Limited engages in the manufacture and sale of yarn and technical textile products in India. It offers hygienic products, such as cotton pads and balls, exfoliating pads, cotton wool rolls and pleats, cotton spunlace rolls/tapes, and absorbent cotton fiber. The company also provides cotton yarns and threads that are suitable for weaving, crocheting, sewing, and textile production. Its products are used for cosmetic, personal hygiene, and medical use. The company also exports its products. The company was formerly known as Precot Meridian Limited and changed its name to Precot Limited in December 2020. Precot Limited was incorporated in 1962 and is based in Coimbatore, India.

How the Company Makes Money

Precot Ltd. generates revenue through multiple streams, primarily from the sale of its core products such as cotton and blended yarns, greige fabrics, and finished textiles. The company engages in direct sales to manufacturers in the apparel and home textiles sectors, as well as exports to international markets, which contribute significantly to its earnings. Additionally, Precot Ltd. has established partnerships with various retailers and brands, enhancing its market reach and driving sales volume. The company also focuses on value-added products, which generally yield higher profit margins, thus diversifying its revenue base. Furthermore, improvements in operational efficiency and cost management play a crucial role in enhancing profitability.

Precot Ltd. Financial Statement Overview

Summary

Income statement shows improving gross profit and stronger EBIT/EBITDA margins, but net margins remain modest and recent revenue growth is inconsistent. Balance sheet is moderately stable with balanced debt-to-equity, though leverage remains a key risk. Cash flow is positive on operations, but free cash flow is uneven due to capex fluctuations.

Income Statement

Precot Ltd. shows a mixed performance in its income statement. The gross profit margin has improved over the past year, indicating efficient production and cost management. However, the net profit margin remains modest, reflecting challenges in converting sales into net earnings. Revenue growth is inconsistent, with a slight decline in the most recent year. The company has managed to increase its EBIT and EBITDA margins, demonstrating improved operating efficiency.

Balance Sheet

The balance sheet of Precot Ltd. displays moderate financial stability. The debt-to-equity ratio indicates a balanced use of debt and equity, although the total debt levels remain relatively high. The return on equity shows recovery, yet it is still not at an optimal level. The equity ratio suggests a solid asset base, supporting the company’s financial structure but highlighting potential risks from high leverage.

Cash Flow

Precot Ltd.'s cash flow statement reflects reasonable cash management with positive operating cash flow trends. However, free cash flow growth is inconsistent, and the company faces challenges in maintaining a strong free cash flow to net income ratio. The operating cash flow to net income ratio is healthy, suggesting good cash generation relative to net income, although there are fluctuations in capital expenditures impacting free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.28B	8.68B	9.33B	9.54B	9.93B	6.65B
Gross Profit	3.64B	2.88B	2.73B	485.84M	4.30B	2.84B
EBITDA	1.12B	1.15B	767.05M	379.73M	1.97B	998.17M
Net Income	347.85M	328.87M	167.82M	-260.23M	1.05B	329.48M
Balance Sheet
Total Assets	0.00	9.39B	9.54B	9.07B	9.33B	7.62B
Cash, Cash Equivalents and Short-Term Investments	94.75M	147.25M	133.05M	25.99M	14.86M	10.94M
Total Debt	0.00	3.29B	3.73B	3.79B	3.60B	3.29B
Total Liabilities	-4.48B	4.90B	5.36B	5.01B	4.89B	4.20B
Stockholders Equity	4.48B	4.48B	4.18B	4.06B	4.44B	3.42B
Cash Flow
Free Cash Flow	0.00	394.01M	465.00M	173.28M	-12.84M	145.46M
Operating Cash Flow	0.00	840.89M	1.21B	492.33M	555.39M	260.06M
Investing Cash Flow	0.00	-367.41M	-693.69M	-300.55M	-547.88M	-82.75M
Financing Cash Flow	0.00	-807.11M	-504.13M	-233.59M	9.29M	-167.85M

Precot Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 385.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:PRECOT, the sentiment is Positive. The current price of 385.35 is above the 20-day moving average (MA) of 341.10, below the 50-day MA of 391.02, and below the 200-day MA of 468.35, indicating a bullish trend. The MACD of -2.54 indicates Negative momentum. The RSI at 74.12 is Negative, neither overbought nor oversold. The STOCH value of 82.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:PRECOT.

Precot Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPLPLASTEH	71 Outperform	₹4.85B	18.87	―	1.49%	14.78%	19.77%
PRECOT	65 Neutral	₹5.67B	15.08	―	0.70%	-8.05%	-23.39%
NGLFINE	64 Neutral	₹13.52B	32.10	―	0.13%	9.83%	-50.02%
INDOBORAX	63 Neutral	₹7.87B	17.52	―	0.38%	12.35%	6.79%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MMP	58 Neutral	₹6.58B	27.32	―	0.78%	26.79%	-35.43%
SUTLEJTEX	47 Neutral	₹5.25B	-5.82	―	―	-1.07%	-5.16%

Precot Ltd. Corporate Events

Precot Confirms SEBI Compliance on Dematerialisation for December Quarter

Precot Limited has notified the stock exchange that it has received the requisite confirmation from its Registrar and Share Transfer Agent, MUFG Intime India Private Limited, under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended 31 December 2025. The certificate confirms that all securities submitted by depository participants for dematerialisation during the quarter were duly accepted or rejected, listed on the appropriate stock exchanges in line with existing securities, and that corresponding physical certificates were verified, mutilated, cancelled, and replaced with depository records as registered owners within prescribed timelines, underscoring the company’s compliance with regulatory requirements and reinforcing governance standards for its shareholders and market participants.