Thomas Scott (India) Limited (TSIL) has been making waves in the textile sector since its inception in October 2010. Originally formed to acquire the Retail Division of Bang Overseas Limited, the demerger took effect on April 1, 2011, and was officially completed by August 5, 2011. TSIL made its debut on the NSE and BSE in January 2012 and has since established a strong presence in the market.

Overview of TSIL’s Operations

With a market capitalization of Rs 320 crore, TSIL specializes in manufacturing and trading a variety of textile products. The company operates 31 retail outlets across India, focusing on both men’s formal and casual wear through large format stores. Their centralized warehousing and logistics center plays a crucial role in enhancing supply chain efficiency.

Recent Investor Interest

In a notable move, Ashish Kacholia, often referred to as India’s Warren Buffet, recently acquired a 2.53% stake in TSIL. This investment highlights the growing appeal of the company among institutional investors.

• Foreign Institutional Investors (FIIs) have increased their stake from 0.3% in the quarter ending September 2024 to 0.88% as of now.
• Domestic Institutional Investors (DIIs) have also shown confidence, with their holdings rising from 0.99% to 2.63% over the same period.

These trends are particularly noteworthy given the recent FII outflows, which have been substantial over the past few years.

Strong Financial Performance

TSIL’s financial metrics are impressive and likely contributed to Kacholia’s investment. The company’s Return on Capital Employed (ROCE) exceeds 31%, significantly above the industry median of 14%. This means that for every Rs 100 invested, TSIL generates a profit of Rs 31.

Revenue Growth

The company has shown remarkable growth in sales, jumping from Rs 21 crore in FY19 to Rs 90 crore in FY24, reflecting a compounded annual growth rate (CAGR) of 33% over five years.

• From April to December 2024, TSIL has already recorded sales of Rs 113 crore, indicating a strong financial year ahead.
• EBITDA has also turned around, moving from a loss of Rs 1 crore in FY19 to a profit of Rs 13 crore in FY24.

Profitability Metrics

• TSIL reported a net loss of Rs 1 crore in FY19, but by FY24, it achieved net profits of Rs 10 crore.
• In the first three quarters of FY24, the company has already generated Rs 7.22 crore in profits.

As of March 17, 2025, TSIL’s shares are priced at Rs 289, representing a 40% discount from its all-time high of Rs 509 reached in January 2025. Over the past five years, the stock has skyrocketed by 6,322%, from just Rs 4.5 in March 2020.

Market Valuation and Concerns

Currently trading at a price-to-earnings (P/E) ratio of 29x, TSIL’s valuation aligns with the industry median. However, its 10-year median P/E was 11x, while the industry median stands at 27x.

Promoter Holdings Decline

One area of concern is the continuous decline in promoter holdings, which have dropped from 69.64% in September 2023 to 53.73% by March 2025. Additionally, the absence of dividend payouts, despite consistent profits, raises flags for potential investors.

Future Outlook

The Indian textile market is projected to reach US$ 350 billion by 2030, growing at a CAGR of 10%. This sector currently contributes 2.3% to GDP, with expectations to grow to 5% by 2030. The government has also allocated Rs 5,272 crore for the Ministry of Textiles in the 2025-26 budget, marking a 19% increase from the previous year.

Should You Invest in TSIL?

Ashish Kacholia’s involvement in TSIL underscores the company’s potential, particularly regarding its capital efficiency and profitability metrics. The growing interest from FIIs and DIIs, even amidst market outflows, indicates a strong belief in TSIL’s future.

However, investors should remain cautious due to declining promoter shares and the lack of dividends. As the Indian textile industry gears up for significant growth, it will be interesting to see how TSIL navigates these challenges while capitalizing on emerging opportunities.

Keeping a close eye on this stock could be beneficial—consider adding it to your watchlist!

Final Note

This article provides insights and data regarding TSIL and the textile industry but is not intended as investment advice. Always consult a financial advisor before making investment decisions tailored to your financial goals.