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Check Before You Invest : Sakar Healthcare Ltd

BSE: 0 NSE: SAKAR ISIN: INE732S01012
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Sakar Healthcare Ltd belong to?
Sakar Healthcare Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Sakar Healthcare Ltd a good quality company?
Sakar Healthcare Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Sakar Healthcare Ltd undervalued or overvalued?
Sakar Healthcare Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 57.42 41.89
Price to Book 5.39 2.75
Price to Sales 6.95 4.06
EV to EBITDA 25.37 16.59
Q.4 Is Sakar Healthcare Ltd a good buy now?
Sakar Healthcare Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Sakar Healthcare Ltd?
Sakar Healthcare Ltd revenue growth is 15.8% for FY-2025, which is in line with its 5-year CAGR of 16.44%, indicating stable growth.

Q.2 Gross Profit margin of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Gross profit margin which is the profit after deduction of direct costs, is 24.1% for FY-2025, which is above its 5-year median of 22.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 28.18% for FY-2025, which is above its 5-year median of 24.94% indicating increasing margins.

Q.4 Net Profit Margin of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Net Profit Margin is 9.86% for FY-2025, is in line with its 5-year median of 9.86%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 24.1 22.5
Operating Profit Margin (%) 28.18 24.94
Net Profit Margin (%) 9.86 9.86

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Return on Asset is 4.35%, which is in line with its 5-year historical median of 4.35%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Return on capital employed is 8.52% for FY-2025, which is in line with its 5-year historical median of 8.95%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Return on equity is 6.48% for FY-2025, which is below its 5-year historical median of 8.48%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Cash conversion cycle is 70 days, above its 5-year historical median of 28 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.44 0.44
ROE (%) 6.48 8.48
ROCE (%) 8.52 8.95
Cash Conversion Cycle 70 days 28 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Debt-to-Equity ratio is 0.31, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Sakar Healthcare Ltd?
Sakar Healthcare Ltd Debt to cash flow from operations is 2.54, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Sakar Healthcare Ltd?

Q.1 Promoter shareholding and pledge status of Sakar Healthcare Ltd?
Promoters hold 52.86% of the Sakar Healthcare Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sakar Healthcare Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sakar Healthcare Ltd vs industry peers?
Sakar Healthcare Ltd revenue CAGR is 16.44%, compared to the industry median CAGR of 5.35%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 15.8 5.4
Gross Profit Growth (%) 26.5 14
Operating Profit Growth (%) 31.6 11.5
Net Profit Growth (%) 50 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.44 0.79
ROE (%) 6.48 9.17
ROCE (%) 8.52 11.52
Cash Conversion Cycle (days) 70.31 76

Valuation & price assessment

Q.1 Stock return of Sakar Healthcare Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 41.05% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 41.1% 45.8% 154.8%
Q.2 Valuation ratios of Sakar Healthcare Ltd vs historical?
The current P/E ratio of 57.42 is higher than its historical median of 41.89, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 57.42 41.89 31.09
Price to Book 5.39 2.75 2.85
Price to Sales 6.95 4.06 2.82
EV to EBITDA 25.37 16.59 15.99

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