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Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Rainbow Denim had a gross margin of 18.19% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Rainbow Denim Gross Margin % Related Terms
Rainbow Denim Gross Margin % Historical Data
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The historical data trend for Rainbow Denim's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Textile Manufacturing subindustry, Rainbow Denim's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rainbow Denim Gross Margin % vs Manufacturing - Apparel & Accessories Industry
For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Rainbow Denim's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Rainbow Denim's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Rainbow Denim (BOM:532441) has a Gross Margin % of 18.19% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Rainbow Denim and its competitors. This is 178% above median its historical median of 6.54.
Is Rainbow Denim's Gross Margin % too high?
Rainbow Denim's current Gross Margin % of 18.19% is 178% above median its 10-year median of 6.54. The Manufacturing - Apparel & Accessories industry median Gross Margin % is 28.34. Rainbow Denim's value of 18.19% is 35.8% below this industry median. Overall, Rainbow Denim has a GF Score™ of 4/100, reflecting its overall financial health beyond just this single metric.
How does Rainbow Denim's Gross Margin % compare to AIN?
Rainbow Denim's Gross Margin % of 18.19% can be compared against companies in the Manufacturing - Apparel & Accessories industry. The industry median Gross Margin % is 28.34. Rainbow Denim's value of 18.19% is 35.8% below this benchmark. While the company's 10-year median is 6.54 vs. the industry median of 28.34, Rainbow Denim has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Manufacturing - Apparel & Accessories company?
The median Gross Margin % among Manufacturing - Apparel & Accessories companies is 28.34, based on 1,025 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rainbow Denim's current Gross Margin % of 18.19% is 35.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Rainbow Denim and its competitors. For the Manufacturing - Apparel & Accessories industry, the median Gross Margin % is 28.34 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rainbow Denim's current Gross Margin % is 18.19%, which is 178% above median its own 10-year median of 6.54. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rainbow Denim stock overvalued right now?
Rainbow Denim (BOM:532441) has a current Gross Margin % of 18.19%. The current Gross Margin % is 18.19%, which is 178% above median its 10-year median of 6.54 and 35.8% below the Manufacturing - Apparel & Accessories industry median of 28.34. Rainbow Denim's overall GF Score™ is 4/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Rainbow Denim (BOM:532441), the current Gross Margin % is 18.19% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Rainbow Denim Ltd is an Indian firm operating in the textile industry. It is principally engaged in the single segment of manufacturing and distribution of denim fabric. Its product range consists of crosshatch denim, slubby denim, structured (dobby) denim, polyester filament weft denim, multi-count denim fabrics, doubled yarn warp denim, and silky denim and others.
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