Salona Cotspin Limited (SALONA) AI Stock Analysis

• Market Cap: ₹1.40B
• Dividend Yield: 0.36%
• Average Volume (3M): 231.00
• Price to Earnings (P/E): 104.7
• Beta (1Y): 0.84
• Revenue Growth: -13.03%
• EPS Growth: -81.40%
• Country: IN
• Employees: 248
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.62
• Shares Outstanding: 5,262,400
• 10 Day Avg. Volume: 96
• 30 Day Avg. Volume: 231
• PEG Ratio: -0.82
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 6.72
• 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: 52 Neutral
• Price Target: ₹266.00 ▲(3.10% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is primarily held back by mixed financial performance (margin pressure, high leverage, and uneven cash generation) and an extremely unattractive valuation (very high P/E with low yield). Technical indicators are mildly supportive, but not strong enough to offset the fundamental and valuation risks.

Positive Factors

Improving Equity Position

A rising shareholders' equity and improving equity ratio signal gradual repair to the capital structure. Over 2-6 months this supports solvency, provides a larger buffer against losses, and increases capacity to raise capital or absorb cyclical textile demand shocks.

Stable Operating Margins

Relatively stable EBIT/EBITDA margins indicate durable operational controls and manufacturing efficiency. This consistency helps preserve cash generation potential through industry cycles and provides management flexibility to invest or defend margins when revenue is volatile.

Lean Workforce Scale

A modest employee base suggests a comparatively lean cost structure for a manufacturer. Over months this can translate into lower fixed overhead, faster implementation of productivity measures, and the ability to scale labor intensity with demand without large structural costs.

Negative Factors

High Leverage

Sustained high debt-to-equity raises refinancing and interest coverage risk, constraining capital allocation. Over several months this can limit investment, force higher working-capital financing during seasonality, and increase vulnerability to rising rates or demand weakness.

Margin Pressure

A declining gross margin reflects rising input or production costs versus pricing power. Persisting margin erosion over 2-6 months reduces operating leverage, compresses cash available for capex or deleveraging, and makes profitability more sensitive to revenue dips in a competitive apparel market.

Inconsistent Cash Generation

Variable and occasionally negative free cash flow undermines the company's ability to self-fund operations and investments. Over months this increases reliance on external financing, raises liquidity risk, and can force short-term trade-offs between capex, debt reduction, and working-capital needs.

Salona Cotspin Limited Business Overview & Revenue Model

Company Description

Salona Cotspin Limited produces and sells cotton yarn, knitted fabrics, and garments in India. The company offers ring spin, open end, slub, hank, and compact cotton and blend yarn products. It also provides grey, dyed, and printed fabrics; and knitwear apparels. The company also exports its products. Salona Cotspin Limited was incorporated in 1994 and is based in Coimbatore, India.

How the Company Makes Money

Salona Cotspin Limited generates revenue primarily through the sale of its cotton yarns, which are sold to textile manufacturers and retailers both in India and globally. The company benefits from a diverse customer base, which helps mitigate risks associated with market fluctuations. In addition to yarn production, SALONA may also engage in value-added services such as custom spinning and dyeing, which further enhance its revenue streams. The company likely has partnerships with suppliers of raw cotton to ensure a steady supply of high-quality materials, and it may also collaborate with distributors to expand its market reach. Overall, the combination of direct product sales, value-added services, and strategic partnerships contributes significantly to SALONA's earnings.

Salona Cotspin Limited Financial Statement Overview

Summary

Mixed fundamentals: revenue and profitability show volatility with declining gross margin, balance sheet leverage is high despite improving equity, and free cash flow has been inconsistent with periods of negative FCF.

Income Statement

The company's revenue has shown a mixed trend with fluctuations in growth rates. The gross profit margin has been declining, indicating increased cost pressures. Net profit margin has also shown volatility, with a notable drop in recent years, reflecting challenges in maintaining profitability. Despite this, EBIT and EBITDA margins have remained relatively stable, suggesting operational efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage which could pose risks in financial stability. However, stockholders' equity has been increasing, which is a positive sign. The equity ratio has improved over time, reflecting a better capital structure, but overall leverage remains a concern.

Cash Flow

Cash flow statements indicate variability in free cash flow, with some periods showing negative free cash flow, reflecting challenges in cash generation. The operating cash flow to net income ratio has been inconsistent, suggesting potential difficulties in translating income into cash flow. Free cash flow to net income ratio has also seen fluctuations, highlighting cash management issues.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	6.34B	6.62B	6.74B	4.87B	6.47B	2.30B
Gross Profit	922.72M	730.64M	514.88M	824.34M	1.10B	485.63M
EBITDA	339.29M	321.22M	304.79M	351.26M	374.58M	148.78M
Net Income	12.66M	31.33M	61.27M	175.69M	197.89M	62.00M
Balance Sheet
Total Assets	3.55B	3.54B	3.64B	2.70B	2.28B	1.38B
Cash, Cash Equivalents and Short-Term Investments	28.38M	21.14M	11.52M	8.04M	4.02M	5.32M
Total Debt	2.37B	2.39B	2.57B	1.57B	1.39B	766.61M
Total Liabilities	2.70B	2.72B	2.84B	1.96B	1.71B	1.00B
Stockholders Equity	851.75M	825.77M	797.68M	741.80M	572.40M	380.17M
Cash Flow
Free Cash Flow	121.48M	187.61M	-840.64M	-85.92M	-547.00M	-301.92M
Operating Cash Flow	207.62M	450.40M	-119.04M	-50.15M	-347.82M	-237.47M
Investing Cash Flow	-85.43M	-262.64M	-719.09M	-33.88M	-195.08M	-52.88M
Financing Cash Flow	-121.42M	-187.22M	838.08M	83.94M	541.57M	290.48M

Salona Cotspin Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 258.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SALONA, the sentiment is Positive. The current price of 258 is below the 20-day moving average (MA) of 265.23, above the 50-day MA of 255.97, and above the 200-day MA of 256.73, indicating a neutral trend. The MACD of 3.76 indicates Positive momentum. The RSI at 50.52 is Neutral, neither overbought nor oversold. The STOCH value of 58.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:SALONA.

Salona Cotspin Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
LOYALTEX	56 Neutral	₹953.17M	-1.31	―	―	-30.97%	80.99%
SURYALAXMI	55 Neutral	₹1.03B	53.55	―	―	4.60%	226.64%
ZENITHEXPO	55 Neutral	₹1.02B	172.50	―	―	8.45%	―
SALONA	52 Neutral	₹1.40B	104.73	―	0.36%	-13.03%	-81.40%
PRITI	49 Neutral	₹487.26M	106.63	―	―	―	―

Salona Cotspin Limited Corporate Events

Salona Cotspin Reports ROC Order Over Minor Filing Delay, No Financial Impact

Salona Cotspin Limited has disclosed that it received an order from the Registrar of Companies, Coimbatore, for a procedural lapse under the Companies Act, 2013 related to a two-day delay in filing E-form MGT-15 for the financial year 2021-22. The company clarified that the order does not impose any monetary penalty on either the company or its officers and that the action has no significant impact on its financials, operations, or other business activities, indicating that the issue is a minor compliance matter rather than a substantive regulatory setback.