Ambika Cotton Mills Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Ambika Cotton Mills Ltd trades at ₹1,593, in a confirmed uptrend and 19 weeks into that stage. That is +2.9% against its own 200-day average. It sits at 57% of a 52-week range of ₹1,176 to ₹1,904. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (3 weeks and counting).

Today the stock is in a confirmed uptrend — week 19 of stage 2, confirmed. At ₹1,593 it trades +2.9% versus its 200-day average and sits at 57% of its 52-week range (₹1,176–₹1,904).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +107% while the NIFTY 500 moved +273% — behind the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (3 weeks and counting; last ahead the week of 2026-08-21) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Ambika Cotton Mills Ltd's story is not scored yet against the markers our research file set on 31 May 2026. Where it sits in its own cycle: Not stated in the research file. Our fortnightly research layers last read it on 19 July 2026.

Our read, 31 May 2026. A cyclical value play trading at 0.99x book — Q4 FY26 delivered record quarterly revenue (₹215 Cr,) and PAT (₹24.5 Cr,) but OPM compressed 80 bps YoY, flagging that the recovery is volume-led, not margin-led.

From the numbers. The PE expansion from 5.45x (Sep 2022) to 13.4x (May 2026) occurred while TTM EPS contracted from ₹320 to ₹110 then partially recovered to ₹125. This is an unusual pattern — multiple expanded as earnings fell and are…

From the price. Price stage 2, week 19 — above its 200-day line, relative strength falling.

From the research. A cyclical value play trading at 0.99x book — Q4 FY26 delivered record quarterly revenue (₹215 Cr,) and PAT (₹24.5 Cr,) but OPM compressed 80 bps YoY, flagging that the recovery is volume-led, not margin-led.

What is proven. A cyclical value play trading at 0.99x book — Q4 FY26 delivered record quarterly revenue (₹215 Cr,) and PAT (₹24.5 Cr,) but OPM compressed 80 bps YoY, flagging that the recovery is volume-led, not margin-led.

What is not proven yet. OPM 16.5% in Q4 FY26 — down 80 bps YoY despite a 57.9% revenue surge. If cotton prices rise, OPM compresses further; the FY22 peak of 29% is structurally distant.

🚨 Layer 1 read, 19 July 2026 — DROP. Cheap cotton-yarn cyclical trading near book, but the recovery is volume-led with margins still compressing — a low-conviction value play. AMBIKCO is genuinely cheap (PE 14, ~0.99x book, net cash D/E -0.22) and FY26 revenue and PAT both grew after a 65% profit collapse from the FY22 peak. But the recovery is volume-led not margin-led — Q4 operating margin fell 80bps YoY even on a 58% revenue surge — and ROE at 7.5% sits below the cost of equity, so there is no earnings-quality engine to drive a re-rating from an already-top-decile-of-its-own-history PE. That is why it ranks at the bottom of KEEP: real value, unproven turn.

What would change Layer 1’s mind. Q1 FY27 OPM recovering back toward the high-20s (the FY22-peak level) rather than staying stuck at ~15% — a confirmed margin-led (not just volume-led) turn would flip this from a cheap-but-thin value play to a genuine early-innings inflection worth ranking up.

The test written in advance. OPM structurally compressed; cotton price spike reverts recovery — OPM structurally compressed; cotton price spike reverts recovery Q1 FY27 OPM vs quarterly cotton MCX price by the next result.

The test written in advance. PE near prior 10Y peak — limited multiple expansion room — PE near prior 10Y peak — limited multiple expansion room EPS FY27 vs FY26 ₹125; OPM above 17% by the next result.

The test written in advance. Low institutional coverage; micro-cap liquidity risk — Low institutional coverage; micro-cap liquidity risk FII holdings trend in next 2 quarters; any institutional initiation coverage by the next result.

What the company does. FY26 closed with revenue ₹781 Cr (+11.2% YoY) and PAT ₹71.6 Cr (+9% YoY) after three consecutive years of declining profitability from the FY22 peak of ₹180 Cr PAT. 12,528-spindle expansion at Dindigul (₹57 Cr,) takes capacity to 1,20,816 spindles — specialty yarn focus targeting athleisure and premium shirting for export markets. PE at 13.3x vs 10.8x median, cycle near prior peak; zero-debt balance sheet (D/E -0.22,) provides downside floor, but ROE of 7.5% is too thin to justify rerating without OPM recovery.

Lever 2 · Value-added mix — BUILDING. ₹57 Cr investment expands capacity from 1,08,288 to 1,20,816 spindles; specialty compact and multi-fold yarn targets athleisure and premium shirting at better margins than standard combed yarn. What proves it keeps working: Specialty Yarn Capacity Expansion (12,528 spindles at Dindigul). It stops working if Q1 FY27 OPM vs quarterly cotton MCX price.

Lever 10 · New geographies — BUILDING. CRISIL projects 7-9% industry revenue growth in FY26 driven by China export rebound (China = 14% of India's yarn export revenue); AMBIKCO's 60% export mix means this is a direct tailwind. What proves it keeps working: India Cotton Yarn Export Recovery — China Demand Rebound. It stops working if Q1 FY27 OPM vs quarterly cotton MCX price.

Lever 1 · Operating leverage — BUILDING. OCF ₹228 Cr in FY26 vs ₹129 Cr FY25 and negative OCF in FY23-FY24 — the working capital cycle has turned; debt reduction visible with interest costs falling to ₹2.7 Cr in Q4 FY26. What proves it keeps working: Operating Cash Flow Inflection. It stops working if Q1 FY27 OPM vs quarterly cotton MCX price.

Sources: our stock research file (31 May 2026) · quarterly results through Jun 26. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Ambika Cotton Mills Ltd reported ₹258 Cr of revenue in the Jun 26 quarter, +34.4% year on year. That is the 3rd straight quarter of year-on-year growth. Over 10 years it has compounded at 4.7% a year. The last full year, FY26, came in at ₹781 Cr. The last four reported quarters add to ₹847 Cr.

Why this happened. India's cotton yarn sector faced a sharp FY25 export slump as China ran down domestic inventories. The FY26 recovery is now confirmed in AMBIKCO's Q4 FY26 revenue of ₹215 Cr — the highest quarterly revenue in recent history — up 57.9% YoY. The sector recovery is not AMBIKCO-specific but the company's premium fine-count niche means better pricing power vs commodity yarn exporters. The risk: if China inventory normalization is done and demand moderates in FY27, Q4 FY26 may have been the peak of the export rebound.

FY26 revenue came in at ₹781 Cr (+11.3% on the year), capping 10 years at 4.7% compound. The latest quarter (Jun 26) printed ₹258 Cr, +34.4% year on year — the 3rd consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +26.0% growth against the decade's 4.7% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +23.8% over the last 4 quarters against +2.3%/yr over the last 8 — accelerating; TTM profit +36.7% vs +13.2%/yr — accelerating.

FY26-Q4. revenue ₹215 Cr and profit ₹25 Cr as reported.

FY27-Q1. revenue ₹258 Cr and profit ₹26 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Ambika Cotton Mills Ltd's operating margin is 15.0% in the Jun 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 13.0% to 29.0%. The current quarter sits inside that band.

Why this happened. The BSE disclosure in Q3 FY26 announced the 12,528-spindle expansion at Dindigul — split as 6,048 spindles already commissioned and 6,480 more planned. The project is financed through internal accruals and debt. Specialty yarn (compact, multi-fold) commands better realizations than standard combed yarn and serves as a competitive differentiator vs commodity competitors. Industry analysts estimate specialty segment contribution could rise 15pp over two fiscal years. The expansion also includes automated winding and contamination sorters, aligning with global apparel quality standards. This is the one tangible growth catalyst for FY27-FY28, but execution timing risk is material — no…

The latest quarter's operating margin is 15.0%, +1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 13.0%–29.0%.

Why the margin moved: operating margin went +1.3 pp year on year while gross margin went −3.5 pp — the gain came mostly from the gross line: input costs and pricing.

FY26-Q4. revenue ₹215 Cr and profit ₹25 Cr as reported.

FY27-Q1. revenue ₹258 Cr and profit ₹26 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Ambika Cotton Mills Ltd earned ₹26.0 Cr of net profit in the Jun 26 quarter, +62.5% year on year. It is the 4th consecutive quarter of growth. Full-year FY26 profit was ₹72.0 Cr. The 10-year compound rate is 5.0%. That is 10.1% of the quarter's revenue. The same quarter a year earlier earned ₹16.0 Cr.

Jun 26 profit was ₹26.0 Cr, +62.5% year on year — the 4th consecutive quarter of growth. On the full year, FY26 printed ₹72.0 Cr (+9.1%), and the 10-year compound rate is 5.0%.

Why profit moved: revenue contributed +34.4% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +35.0% vs revenue +26.0%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹215 Cr and profit ₹25 Cr as reported.

FY27-Q1. revenue ₹258 Cr and profit ₹26 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 109% of Ambika Cotton Mills Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹228 Cr of operating cash against ₹72.0 Cr of profit. After ₹63.0 Cr of capital spending, ₹165 Cr was left as free cash.

FY26: operating cash of ₹228 Cr against reported profit of ₹72.0 Cr, leaving free cash of ₹165 Cr after ₹63.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 109% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 109%: the cash cycle stretched 59 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving.

Router verdict: the bigger cash user is investment — capital spending ran 2.1× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Ambika Cotton Mills Ltd's cash conversion cycle runs 331 days in FY26, up from 272 days in FY21. Capital spending ran ₹147 Cr over the last 3 years. At FY26 sales of ₹781 Cr each day of that cycle holds about ₹2.1 Cr, so roughly ₹708 Cr sits inside the business at any moment.

FY26: debtors at 15 days, inventory at 387 days — roughly 12.7 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 331 days, looser than FY21's 272.

The full loop: cash goes out to suppliers and production on day 0; stock waits 387 days to sell; customers pay about 15 days after that; and suppliers themselves are paid at 71 days — netting out to the 331-day cycle.

In money terms: at FY26 sales of ₹781 Cr, each day of the cycle holds about ₹2.1 Cr — so the 331-day loop keeps roughly ₹708 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹147 Cr over the last 3 fiscal years against ₹71.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹5.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.⚠ unverified

Ambika Cotton Mills Ltd earns a ROCE of 12% in FY26. That is up from a trough of 11% in FY24. Return on invested capital clears the cost of that capital by −2.6 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 9.2% net margin on 0.71× asset turns.

FY26 ROCE is 12%, recovered from a FY24 trough of 11% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 9.2% net margin × 0.71× asset turns × 1.16× balance-sheet leverage ≈ 7.6% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 9.4% − 12.0% = a −2.6 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.⚠ unverified

Ambika Cotton Mills Ltd carries total debt of ₹51.0 Cr against shareholder equity of ₹904 Cr as of Jun 25, a debt-to-equity of 0.06 — effectively unlevered. On the annual view that ratio went from 0.10 in FY24 to 0.06 in FY25. The returns elsewhere on this page are therefore earned rather than borrowed.

Jun 25: total debt of ₹51.0 Cr against shareholder equity of ₹904 Cr — a debt-to-equity of 0.06. On the annual view, debt-to-equity went from 0.10 (FY24) to 0.06 (FY25). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions added 1.7 points of Ambika Cotton Mills Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 1.7% of the company. Promoters moved +0.2 points over the same window, to 50.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: +1.7 points over 8 quarters to 1.7%; Promoters: +0.2 points over 8 quarters to 50.4%; Foreign institutions: +0.0 points over 8 quarters to 0.5%.

Why the register moved: domestic institutions drove it (+1.7 points) — steady accumulation by institutions reading the same numbers this page reads.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Ambika Cotton Mills Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Ambika Cotton Mills Ltd trades at 11.2× P/E, mid-range by its own standards (50th percentile). Its long-run median P/E is 11.2×, measured across 10.6 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 11.2× is mid-range by its own standards (50th percentile), against a long-run median of 11.2× measured over 10.6 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +8.9% against a +5.6% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the −0.2%/yr price move, ~−3.8%/yr came from earnings growth and ~+3.6 pp from the multiple (expanding); over 10y, of the +6.9%/yr price move, ~+6.4%/yr came from earnings growth and ~+0.5 pp from the multiple (roughly flat). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

A quarterly PEG curve, which only the second data source carries, is not drawn on this page: its two data sources do not share enough overlapping reported history to be compared. A figure nobody could check is not used to price growth — the gap is a decision, not missing data.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 20 July 2026 price, Ambika Cotton Mills Ltd was paying for profit growth of about 6.4% a year. Profit itself has compounded 5.0% a year over the past 10 years. Today the market pays 11.2× P/E, the 50th percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is close to what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 20 July 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Improving Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Ambika Cotton Mills Ltd reads as improving on its fundamental arc. Improving — profit growth bottomed 7 quarters ago at −17.7% and has held its recovery at +36.7%, ROCE holding at 12.0%. The read is built from 8 quarters across 4 curves, on partial evidence.

Why it matters: a sustained climb off the trough is the setup this page is built to catch — the question moves to what you pay for it.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

54.7/100 — rank 4 of 13 in Textiles - Spinning · 87% evidence confidence

Ambika Cotton Mills Ltd scores 54.7 out of 100 against the 13 companies it is compared with in Textiles - Spinning, ranking 4. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 21.3 + 15.7 + 11 + 6.7 = 54.7. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Frequently asked questions