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Check Before You Invest : Scarnose International Ltd

BSE: 543537 NSE: ISIN: INE0IXR01019
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Scarnose International Ltd belong to?
Scarnose International Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Scarnose International Ltd a good quality company?
Scarnose International Ltd is a quality company, based on a 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 Scarnose International Ltd undervalued or overvalued?
Scarnose International 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 125.35 50.04
Price to Book 2.46 2.22
Price to Sales 1.98 0.98
EV to EBITDA 90.97 92.61
Q.4 Is Scarnose International Ltd a good buy now?
Scarnose International Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Scarnose International Ltd?
Scarnose International Ltd revenue growth is -12.7% for FY-2025, which is below its 5-year CAGR of 0.08%, indicating slower growth.

Q.2 Gross Profit margin of Scarnose International Ltd?
Scarnose International Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.2% for FY-2025, which is above its 5-year median of 0.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Scarnose International Ltd?
Scarnose International Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 0.75% for FY-2025, which is above its 5-year median of 0.3% indicating increasing margins.

Q.4 Net Profit Margin of Scarnose International Ltd?
Scarnose International Ltd Net Profit Margin is 1.58% for FY-2025, is above its 5-year median of 0.35%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.2 0.5
Operating Profit Margin (%) 0.75 0.3
Net Profit Margin (%) 1.58 0.35

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Scarnose International Ltd?
Scarnose International Ltd Return on Asset is 1.96%, which is in line with its 5-year historical median of 1.96%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Scarnose International Ltd?
Scarnose International Ltd Return on capital employed is 2.63% for FY-2025, which is in line with its 5-year historical median of 2.63%. 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 Scarnose International Ltd?
Scarnose International Ltd Return on equity is 1.98% for FY-2025, which is in line with its 5-year historical median of 1.98%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Scarnose International Ltd?
Scarnose International Ltd Cash conversion cycle is 81 days, above its 5-year historical median of 52 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) 1.24 2.98
ROE (%) 1.98 1.98
ROCE (%) 2.63 2.63
Cash Conversion Cycle 81 days 52 days

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

Q.9 Debt to Equity ratio of Scarnose International Ltd?
Scarnose International Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.03, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Scarnose International Ltd?
Scarnose International Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Scarnose International Ltd?

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

Peer comparison (industry-wise, mcap)

E: How does Scarnose International Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Scarnose International Ltd vs industry peers?
Scarnose International Ltd revenue CAGR is 0.08%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -12.7 -
Gross Profit Growth (%) 1,200 17.9
Operating Profit Growth (%) 0 16.4
Net Profit Growth (%) 1,800 17.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.24 0.52
ROE (%) 1.98 2.05
ROCE (%) 2.63 3.6
Cash Conversion Cycle (days) 80.56 46

Valuation & price assessment

Q.1 Stock return of Scarnose International Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 14.94% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 14.9% 13%
Q.2 Valuation ratios of Scarnose International Ltd vs historical?
The current P/E ratio of 125.35 is higher than its historical median of 50.04, 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 125.35 50.04 33.62
Price to Book 2.46 2.22 1.57
Price to Sales 1.98 0.98 2.21
EV to EBITDA 90.97 92.61 14.09

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