Altman Z″
Needs current assets and current liabilities.
MADHURKNIT · Textile · INE1P5601010
Analyst mean 0.00 · 0 analysts · 0% bullishThis company listed within the last twelve months, so its prospectus is still the primary source. The figures below were extracted from the DRHP and RHP before listing and scored then, and they are shown here as they stand in the IPO record rather than restated.
Each flag is a fact read in the filing, shown with the context that makes it meaningful.
Stated objects, as worded in the offer document. Deployment against them is tracked separately.
Claims made in the offer document, to be read against what the company has reported since.
Madhur Knit Crafts Limited was originally incorporated in August 1997 and commenced its commercial operations in 2013 with a primary focus on manufacturing blankets. The Company operates a vertically integrated yarn-to-cloth manufacturing facility admeasuring over 300,000 square feet located in Ludhiana, Punjab, which houses processes including knitting, dyeing, printing, brushing, and finishing. The facility has an annual installed production capacity of 75,00,000 KGs, with a capacity utilization of 64.50% in Fiscal 2025 and 69.75% for the eleven-month period ended February 28, 2026. The Company primarily sells its products B2B to wholesalers, institutional buyers, and retailers, and also exports finished blankets. It reaches its target market through direct customer engagement, established distribution networks of regional partners, and word-of-mouth referrals. To maintain product standards, its operations conform to ISO 9001:2015 certification requirements.
The Company's primary operational moat is its vertically integrated 'yarn-to-cloth' manufacturing model, which centralizes all major textile processing stages in-house to reduce lead times, optimize costs, and capture an additional 2.5% in gross margins. This is further supported by its strategic location within the prominent Ludhiana textile cluster.
Madhur Knit Crafts Limited is a Ludhiana-based vertically integrated textile manufacturer engaged in the production of fabrics and garments, with a primary focus on consumer products such as blankets.
Source: p. 123, 126, 131
The comparable set the company chose, which is itself a disclosure.
As presented in the offer document. Post-listing figures are in the statements above.
| Basis | Period | Related party revenue cr | Pat cr | Ebitda cr | Pat margin | Revenue cr | Pat margin derived |
|---|---|---|---|---|---|---|---|
| standalone | 11M-FY26 | 3.321 | 12.3523 | 25.6731 | 6.34% | 194.6905 | yes |
| standalone | FY25 | 5.9005 | 11.0325 | 23.2751 | 6.43% | 171.635 | yes |
| standalone | FY24 | 1.2575 | 1.7043 | 8.044 | 1.57% | 108.3845 | yes |
Written before listing, answered from the document itself.
How are the fresh IPO proceeds distributed and what portion is for balance-sheet repair?
The fresh issue proceeds are primarily allocated to balance sheet refinancing: ₹20.85 Cr (51.56% of specified proceeds) is allocated for prepaying/repaying corporate borrowings and ₹15.92 Cr (39.36%) is for working capital. Only ₹3.68 Cr (9.09%) is allocated for capital expenditure on solar panels.
p. 80, 81
Who are the promoters and what is their acquisition cost?
The promoters are Arun Gupta, Piyush Gupta, and Chirag Gupta. Following early face value subscriptions, preferential rights issues, and a massive bonus allotment of 2,682,025 shares in June 2025, their nominal acquisition cost per share is extremely low.
p. 63, 68
Are there material related party purchase streams or dependencies?
Yes. The company has significant raw material purchase dependencies on related parties: in 11M-FY26, it purchased raw materials worth ₹15.39 Cr from promoter-owned M/s National Yarn Agency and ₹21.82 Cr from group company Star Cottex Limited.
p. 20, 21, F-30
Does operating cash flow align with reported profitability?
No. Despite standalone PAT expanding rapidly to ₹11.03 Cr in FY25, Cash Flow from Operations was deeply negative at ₹-2.56 Cr. This mismatch is driven by uncollected trade receivables rising to ₹38.23 Cr and inventories swelling to ₹38.94 Cr.
p. 18, 20, F-4, F-5
What structural listing choices and market parameters apply to this offer?
The offer is a fresh issue listing on the NSE EMERGE platform, with Skyline Financial Services acting as the registrar and SKI Capital Services as the Lead Manager. NNM Securities is the designated market maker. Although eligible by size for Mainboard, the company chose the SME platform.
p. 3, 5, 8, 40
What the issue priced at, on the figures in the document.
Ceo: Arun Gupta (Managing Director)
Outstanding direct tax demand against the Company u/s AY 2025-26: INR 0.0031 Cr (Interest on TDS default of INR 0.31 Lakhs recorded on Income Tax portal, though already deposited on 09.07.2026). Criminal proceedings initiated BY the Company: 1 case under Section 138 of the NI Act against Vasu Knitwears (Rahul Arora) involving INR 0.1285 Cr for dishonoured cheques; 1 case under Section 138 of the NI Act against 3V International involving INR 0.2000 Cr for machine purchase advance refund. Commercial litigation initiated BY the Company: 1 recovery claim before MSME Samadhan against M/s Pooja Wollen Industries seeking recovery of INR 0.7942 Cr (comprising principal of INR 0.4659 Cr and interest of INR 0.3284 Cr) u/s 18 of the MSMED Act. Litigations against promoters, other directors, and group entities are Nil u/s RHP reporting.
Auditor name: M/s V. V. Bhalla & Co., Chartered Accountants
Skin in game: 69.82%
None disclosed. The Peer Reviewed Auditor has confirmed that there are no adverse observations, reservations, qualifications, or matters of emphasis in the statutory audit reports of the Company for FY 23, FY 24, FY 25, or the stub period ended Feb 28, 2026.
Auditor changed last 3y: Yes
Source: p. 18, 19, 23, 208, 211, F-2, F-3, F-35
Numbered markers are corporate actions and, once the filings are read, capital and governance events. Prices are split-adjusted so the series is continuous.
What the numbers mean when read together — computed from the filings, not a score.
Operating cash is only 31% of profit, and operating cash has been negative in 3 of the last 4 years — this is a pattern, not a one-off timing gap.
Why this reading: Flagged because the shortfall is persistent (3 weak years), material, and unexplained by a single year of working-capital movement.
Latest operating cash ₹4 cr vs trailing profit ₹13 cr. A repeated gap between profit and cash points to structural earnings quality issues rather than benign timing.
Free cash flow swings between positive and negative across the cycle.
Why this reading: Surfaced for context, not as a concern — it only becomes meaningful if it persists or pairs with other signals.
Latest ₹0 cr, negative in 3 of 4 years.
Every score below is calculated here from the reported numbers — none of it is asserted. Open the notebook at the foot of the section to see each formula with this company's figures in it.
Needs current assets and current liabilities.
Piotroski F-Score — fundamental momentum — Joseph Piotroski, University of Chicago, 2000, in a study of whether accounting signals could improve returns among cheap stocks.
Nine yes-or-no tests across profitability, leverage and operating efficiency. Each pass scores one. It asks a narrow question: is this business getting better or worse on its own terms, year over year?
How to read it7 or more suggests improving fundamentals; 3 or fewer suggests deterioration. It measures direction, not quality — a weak company improving can score higher than a strong one holding steady.
Where it failsA single year of comparison, so one unusual year distorts it. Says nothing about valuation, competitive position or management. Piotroski designed it to rank already-cheap stocks, not to judge a company in isolation.
Needs trade receivables, current assets, other expenses.
Accruals are 6.4% of assets. Free cash flow negative in 3 of 4 years.
DuPont decomposition — Devised inside the DuPont Corporation in the 1920s and still the standard way to read a return on equity.
Splits return on equity into its three sources, so the same headline number can be traced to very different businesses.
How to read itA 20% ROE built on margin and turnover is a different proposition from a 20% ROE built on 3× leverage. The first survives a downturn; the second amplifies it.
Where it failsA single year. Negative equity makes it meaningless. Leverage is structural for lenders, so the third term carries no signal there.
Revenue grew faster than the capital behind it, which is what operating leverage looks like: the existing asset base is working harder.
cumulative operating cash flow ÷ cumulative net profit
₹-5 cr ÷ ₹27 cr, over 4 years
-0.19×
Below 1.0 and persistent means profit is being recognised before the cash arrives.(net profit − operating cash flow) ÷ average total assets
(₹13 − ₹4) cr ÷ average assets
6.4%
The share of profit that is accounting entries rather than cash. Above ~10% is where accruals start to dominate.net margin × asset turnover × leverage
6.2% × 1.32 × 3.64
29.5%
Splits ROE into whether returns come from operations or from borrowing.EBIT ÷ finance cost
₹24 cr ÷ ₹7 cr
3.43×
How many times operating profit covers the interest bill.borrowings ÷ net worth
₹74 cr ÷ ₹44 cr
1.68×
Read against the sector — infrastructure carries more than software.growth in fixed assets + CWIP, against growth in revenue
capital +94% vs revenue +137%, FY2023 to FY2026
-43pp gap
Money going in far faster than revenue coming out. For an incubator this is expected — the test is whether it eventually converts.Needs more balance-sheet detail (only 3 of 6 flags testable).
NOPAT over equity plus debt less cash, at a notional 25% tax. Incremental ROIC is the return on money put in since then — the number that decides whether growth creates value or consumes it.
Return on invested capital, and incremental ROIC — Standard in corporate finance; the incremental form was popularised by Michael Mauboussin as the test of whether growth creates value.
ROIC measures what the business earns on all the capital it employs — equity plus debt, less cash. Incremental ROIC asks a sharper question: what has it earned on the money put in since a chosen year?
How to read itROIC comfortably above the cost of capital — call it 11–13% in India — means growth compounds. Below it, growth consumes. Incremental below headline means recent investment is earning less than the legacy business.
Where it failsDistorted in the year of a large acquisition. Understated for companies mid-build, where capital is deployed but capacity has not yet been commissioned — an incubator will look poor until it does not.
Read downward. Cash can cover EBITDA and still not survive capex — the third rung is where a capital-hungry business shows itself.
The earnings quality ladder — Not a named model — the standard sequence an analyst walks when testing whether reported profit is real.
Three ratios read in order, each stricter than the last.
How to read itRead downward. Each rung failing where the one above passed tells you exactly where the cash is going.
Where it failsA single year of heavy capex depresses the third rung legitimately. Judge it across a cycle.
Against a policy rate near 6%, most sound Indian corporates borrow between 7% and 10%.
Cost of debt — Interest expense over average borrowings — the effective rate the company actually pays.
What the lenders charge, which is a market verdict on credit quality that no rating agency delay affects.
How to read itAgainst a policy rate near 6%, most sound Indian corporates borrow between 7% and 10%. Read the direction over years as much as the level.
Where it failsUnderstated where a large share of interest is capitalised into projects under construction. Not meaningful for lenders, where interest is cost of goods.
Models that need these lines are withheld rather than estimated: net worth, current assets, current liabilities, trade receivables, inventory, net block. Nothing on this page is back-solved from a figure the company did not publish.
Each framework below is a set of stated, mechanical criteria from published work, run against this company's own filed numbers. Passing or failing a screen is not a verdict — different frameworks disagree by design, and that disagreement is itself informative.
Benjamin Graham's stated criteria for a defensive stock, applied to the filed numbers. A company failing several is not disqualified — Graham designed these to be deliberately strict.
Two ratios only: what the business earns on its capital, and what you pay for those earnings. Designed to be ranked across a universe rather than read in isolation.
The fundamental half of William O'Neil's framework. The market and leadership components are judgement calls and are not scored here.
The characteristics long-term holders commonly look for: cash-backed earnings, high returns on capital, and debt that never forces a decision.
Bars are revenue; the line is net margin. Revenue rising while the line falls is the shape worth noticing.
Operating cash first, then what the business spent and raised.
One year is a snapshot. These are the two lines that matter across a cycle.
Rising debtor or inventory days against flat sales is the earliest visible sign of stress.
Set your own assumptions and watch the numbers move. A scenario calculator — the outputs are the arithmetic of your inputs.
One canonical set of figures — the same numbers used everywhere else on this page and on the screener.
Where cash gets stuck. A rising inventory or debtor line against flat sales is the earliest sign of trouble in the numbers.
| Measure | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|
| Debtor days
How long customers take to pay | 57 | 95 | 81 | 92 |
| Inventory days
How long stock sits before it sells | 155 | 108 | 119 | 160 |
| Payable days
How long the company takes to pay suppliers | 64 | 56 | 48 | 86 |
| Cash conversion cycle
Debtor + inventory − payable days | 148 | 148 | 153 | 167 |
| Working capital days | 46 | 56 | 59 | 74 |
| ROCE %
Return on capital employed | — | 10.0% | 25.0% | 24.0% |
The shape of the business over time (annual) — read the direction, not the single print.
| Line | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|
| Revenue from operations | 89 | 108 | 172 | 211 |
| Other income | 0 | 0 | 0 | 0 |
| Depreciation | 2 | 2 | 2 | 3 |
| Finance cost | 3 | 4 | 6 | 7 |
| Profit before tax | 1 | 2 | 15 | 17 |
| Net profit (owners) | 1 | 2 | 11 | 13 |
| EPS (₹) | 0.93 | 1.75 | 10.28 | 9.52 |
Exceptional items, total income and EBITDA are read from the filed statements.
| Metric | Mar 2025 | Mar 2026 | Feb 2026 11m |
|---|---|---|---|
| Revenue | 98 | 97 | 195 |
| Other Income | 0 | 0 | 0 |
| Expenses | 85 | 83 | 169 |
| Depreciation | 1 | 1 | 2 |
| Finance cost | 4 | 4 | 7 |
| Profit before tax | 8 | 9 | 17 |
| Net Profit | 6 | 7 | 12 |
| EPS | 5.45 | 4.89 | 9.03 |
| Item | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|
| Equity Capital | 10 | 10 | 11 | 14 |
| Reserves | 5 | 7 | 19 | 30 |
| Borrowings | 34 | 58 | 67 | 74 |
| Net block | 16 | 21 | 31 | 31 |
| CWIP | 0 | 6 | 0 | 0 |
| Investments | 0 | 0 | 0 | 0 |
| Total Assets | 65 | 91 | 123 | 160 |
| Line | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|
| Cash from operations | 0 | -6 | -3 | 4 |
| Cash from investing | -1 | -13 | -4 | -4 |
| Cash from financing | 1 | 20 | 6 | 1 |
| Free cash flow | -1 | -19 | -6 | 0 |
| Net change in cash | 0 | 0 | 0 | 2 |
Cash from operations is the number profit has to answer to. Free cash flow is what remains after the business pays for its own growth.
These are coverage counts, not ratings. Each one asks a fixed set of questions of the filings and reports how many the company answered. A company that discloses nothing counts nothing here — that is a statement about the disclosure, not about the business.
The same read, applied to the companies this one competes with.