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INVESTMENT INSIGHTS

Check Before You Invest : Sharat Industries Ltd

BSE: 519397 NSE: SHINDL ISIN: INE220Z01013
  |   Sector:  Agriculture & Allied activities   |   Industry:  Aquaculture

Snapshot

Q.1 Which industry/sub-sector does Sharat Industries Ltd belong to?
Sharat Industries Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Aquaculture segment.
Q.2 Is Sharat Industries Ltd a good quality company?
Sharat Industries Ltd is a weak quality company, based on a inconsistent 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 Sharat Industries Ltd undervalued or overvalued?
Sharat Industries 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 37.4 27.82
Price to Book 3.92 1.77
Price to Sales 1.22 0.48
EV to EBITDA 17.94 12.40
Q.4 Is Sharat Industries Ltd a good buy now?
Sharat Industries 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 Sharat Industries Ltd?
Sharat Industries Ltd revenue growth is 25.9% for FY-2025, which is above its 5-year CAGR of 13.73%, indicating faster growth.

Q.2 Gross Profit margin of Sharat Industries Ltd?
Sharat Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.9% for FY-2025, which is above its 5-year median of 4%, indicating increasing margins.

Q.3 Operating Profit Margin of Sharat Industries Ltd?
Sharat Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.51% for FY-2025, which is above its 5-year median of 6.11% indicating increasing margins.

Q.4 Net Profit Margin of Sharat Industries Ltd?
Sharat Industries Ltd Net Profit Margin is 2.62% for FY-2025, is above its 5-year median of 1.94%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.9 4
Operating Profit Margin (%) 7.51 6.11
Net Profit Margin (%) 2.62 1.94

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sharat Industries Ltd?
Sharat Industries Ltd Return on Asset is 4.12%, which is above its 5-year historical median of 2.92%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sharat Industries Ltd?
Sharat Industries Ltd Return on capital employed is 11.88% for FY-2025, which is above its 5-year historical median of 10%. 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 Sharat Industries Ltd?
Sharat Industries Ltd Return on equity is 9.02% for FY-2025, which is above its 5-year historical median of 7.22%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Sharat Industries Ltd?
Sharat Industries Ltd Cash conversion cycle is 127 days, in line with its 5-year historical median of 124 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.58 1.52
ROE (%) 9.02 7.22
ROCE (%) 11.88 10
Cash Conversion Cycle 127 days 124 days

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

Q.9 Debt to Equity ratio of Sharat Industries Ltd?
Sharat Industries Ltd Debt-to-Equity ratio is 0.83, which is above the industry average of 0.15, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Sharat Industries Ltd?
Sharat Industries Ltd Debt to cash flow from operations is -4.39, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sharat Industries Ltd?

Q.1 Promoter shareholding and pledge status of Sharat Industries Ltd?
Promoters hold 45.01% of the Sharat Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sharat Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sharat Industries Ltd vs industry peers?
Sharat Industries Ltd revenue CAGR is 13.73%, compared to the industry median CAGR of 4.91%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 25.9 4.9
Gross Profit Growth (%) 58.3 9
Operating Profit Growth (%) 38.1 19
Net Profit Growth (%) 66.7 22.4
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.58 0.99
ROE (%) 9.02 7.49
ROCE (%) 11.88 10.75
Cash Conversion Cycle (days) 126.94 109

Valuation & price assessment

Q.1 Stock return of Sharat Industries Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 45.32% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - 45.3% 53% 55.4%
Q.2 Valuation ratios of Sharat Industries Ltd vs historical?
The current P/E ratio of 37.4 is higher than its historical median of 27.82, 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 37.4 27.82 27.52
Price to Book 3.92 1.77 1.77
Price to Sales 1.22 0.48 1.12
EV to EBITDA 17.94 12.40 13.85

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4. Waterbase
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7. NCC Blue Water
8. BKV Inds
9. Datiware Maritime
10. Alpha Commercial Ent

Check trending companies

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2. PB Fintech Ltd.
3. Go Digit General Insurance Ltd.
4. Gillette India Ltd.
5. Tata Communications Ltd.
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