The company processes raw hides into finished leather and manufactures leather products, primarily safety and fashion footwear, for global export markets.
The company lacks a structural moat, as evidenced by low average ROCE (8.1%) and thin net margins (2.1%) which suggest a commodity-like business model. While they have long-standing customer relationships, the lack of pricing power is reflected in returns that barely exceed the cost of capital.
Capital is primarily deployed into working capital and maintenance of manufacturing facilities. While they pay a small dividend, the low ROE (5.8%) suggests that reinvested earnings are not generating significant value for shareholders.
The business succumbed to a classic squeeze where thin margins left no room for error. Over five years, the heavy burden of working capital and high promoter pay drained the remaining liquidity, while the lack of pricing power prevented the company from passing on rising input costs. The precarious financial structure, marked by low interest coverage, eventually buckled under the weight of its debt, and the ambiguity surrounding land ownership led to a legal quagmire that paralyzed the company's ability to refinance or sell assets.
RichFakir rates Super Tannery Ltd's business quality as poor — 33/100 on our quality score (profitability, growth, balance-sheet strength and capital allocation). We assess its competitive moat as none.
On our model, Super Tannery Ltd is trading about 12% above our estimate of fair value; we rate its price expensive. This is an educational estimate from public filings, not a recommendation.
RichFakir's educational verdict on Super Tannery Ltd is: Not rated. A poor business at an expensive price — it does not make our shortlist right now.
RichFakir's educational estimate of Super Tannery Ltd's fair value is about ₹7 per share, derived from public filings. It's our estimate for research — not a price target or a recommendation to buy or sell.
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