Salona Cotspin Limited (SALONA) AI Stock Analysis

• Market Cap: ₹1.37B
• Dividend Yield: 0.36%
• Average Volume (3M): 231.00
• Price to Earnings (P/E): 108.0
• Beta (1Y): 0.98
• Revenue Growth: -13.03%
• EPS Growth: -81.40%
• Country: IN
• Employees: 248
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Apparel - Manufacturers
• EPS (TTM): 2.03
• 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: 55 Neutral
• Price Target: ₹252.00 ▼(-2.33% Downside)

The overall stock score of 55 reflects a mixed financial performance with significant challenges in profitability and cash flow management. The technical analysis shows a positive price trend, but bearish momentum indicators suggest caution. The high P/E ratio indicates potential overvaluation, and the low dividend yield offers limited income potential. These factors collectively contribute to a cautious outlook for the stock.

Positive Factors

Rising shareholders' equity

An increasing shareholders' equity point to a strengthening capital base that cushions losses and supports investment. Over a 2-6 month horizon this improves solvency, allows more internal funding for working capital or capex, and reduces immediate reliance on external financing.

Stable operating margins (EBIT/EBITDA)

Relatively stable EBIT and EBITDA margins indicate persistent operational efficiency despite revenue volatility. This durability helps preserve cash generation potential, supports coverage of fixed costs, and gives management time to address top-line weakness without immediate margin collapse.

Improving equity ratio

An improving equity ratio signals a healthier capital structure and reduced proportionate reliance on debt. Over months this lowers refinancing and solvency risk, enhances lender confidence, and increases flexibility to fund working capital or strategic initiatives from shareholder capital.

Negative Factors

Declining revenue trend

A ~13% year-over-year revenue decline reflects shrinking sales or lost market share. Persisting over several quarters, this erodes scale economics, pressures margins, limits cash flow, and constrains the firm's ability to invest in product competitiveness or distribution expansion.

High leverage

Material debt-to-equity exposes the company to interest and refinancing risk. Over the medium term this raises fixed financial costs, reduces flexibility for capital allocation, and makes the business more vulnerable to revenue shortfalls or rising borrowing rates.

Variable cash generation

Inconsistent operating cash conversion and intermittent negative FCF undermine liquidity and force reliance on external funding. Over 2-6 months this weakens the firm's ability to meet working capital needs, invest in growth, and absorb cyclical downturns without restructuring financing.

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

Salona Cotspin Limited exhibits a mixed financial performance with certain strengths and weaknesses. The company faces challenges in revenue growth and profitability margins, compounded by high leverage on the balance sheet. Cash flow variability indicates potential liquidity issues, pointing towards a need for improved cash management. Despite these challenges, there is some stability in operational efficiency and a gradual strengthening of equity.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.29B	6.62B	6.74B	4.87B	6.47B	2.30B
Gross Profit	892.00M	730.64M	514.88M	824.34M	1.10B	485.63M
EBITDA	332.44M	321.22M	304.79M	351.26M	374.58M	148.78M
Net Income	23.90M	31.33M	61.27M	175.69M	197.89M	62.00M
Balance Sheet
Total Assets	0.00	3.54B	3.64B	2.70B	2.28B	1.38B
Cash, Cash Equivalents and Short-Term Investments	21.14M	21.14M	11.52M	8.04M	4.02M	5.32M
Total Debt	0.00	2.39B	2.57B	1.57B	1.39B	766.61M
Total Liabilities	-825.77M	2.72B	2.84B	1.96B	1.71B	1.00B
Stockholders Equity	825.77M	825.77M	797.68M	741.80M	572.40M	380.17M
Cash Flow
Free Cash Flow	0.00	187.61M	-840.64M	-85.92M	-547.00M	-301.92M
Operating Cash Flow	0.00	450.40M	-119.04M	-50.15M	-347.82M	-237.47M
Investing Cash Flow	0.00	-262.64M	-719.09M	-33.88M	-195.08M	-52.88M
Financing Cash Flow	0.00	-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: Negative
• 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 above the 20-day moving average (MA) of 246.49, above the 50-day MA of 256.89, and above the 200-day MA of 255.54, indicating a bullish trend. The MACD of -0.78 indicates Negative momentum. The RSI at 57.49 is Neutral, neither overbought nor oversold. The STOCH value of 69.27 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%
SALONA	55 Neutral	₹1.37B	108.05	―	0.36%	-13.03%	-81.40%
SURYALAXMI	55 Neutral	₹1.14B	20.62	―	―	4.60%	226.64%
ZENITHEXPO	55 Neutral	₹1.18B	20.00	―	―	8.45%	―
PRITI	52 Neutral	₹698.78M	24.77	―	―	―	―
LOYALTEX	49 Neutral	₹1.02B	-8.05	―	―	-30.97%	80.99%

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.