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INVESTMENT INSIGHTS

Check Before You Invest : Sovereign Diamonds Ltd

BSE: 523826 NSE: ISIN: INE959D01013
  |   Sector:  Consumer Durables   |   Industry:  Diamond & Jewellery

Snapshot

Q.1 Which industry/sub-sector does Sovereign Diamonds Ltd belong to?
Sovereign Diamonds Ltd belongs to the Consumer Durables sector, operating specifically within the Diamond & Jewellery segment.
Q.2 Is Sovereign Diamonds Ltd a good quality company?
Sovereign Diamonds Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is Sovereign Diamonds Ltd undervalued or overvalued?
Sovereign Diamonds Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Sovereign Diamonds Ltd a good buy now?
Sovereign Diamonds 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

Q.1 Revenue growth of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd revenue growth is -26.3% for FY-2025 , which is below its 5 year CAGR of -9.3% , indicating slower growth.
Q.2 Gross Profit margin of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.1% for FY-2025 , which is below its 5 year median of 7.8% , indicating decreasing margins.
Q.3 Operating Profit Margin of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 1.8% for FY-2025 , which is below its 5 year median of 8.11% indicating decreasing margins.
Q.4 Net Profit Margin of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Net Profit Margin is 0.06% for FY-2025 , is below with its 5 year median of 5.07%, indicating decreasing margins.
Current Level Historic Median
Gross Profit Margin 3.1 7.8
Operating Profit Margin 1.8 8.11
Net Profit Margin 0.06 5.07
Q.5 Return on Asset of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Return on Asset is 0.04%, which is below its 5 year historical median of 4.35%, indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Return on equity is 0.07% for FY-2025 , which is below its historical median of 8.52%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Return on capital employed is 4.99% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Cash conversion cycle is 425 days, above its historical median of 331 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.68 0.83
ROE 0.07 8.52
ROCE 4.99 8.85
Cash Conversion Cycle 425 days 331 days
Q.9 Debt to Equity ratio of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Debt-to-Equity ratio is 0.52 , which is in line with the industry average of 0.52 , indicating similar to debt levels in the industry.
Q.10 Debt to cash flow from operations of Sovereign Diamonds Ltd?
Sovereign Diamonds Ltd Debt to cash flow from operations is 3.5 , which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Sovereign Diamonds Ltd?
Promoters hold 65.01% of the Sovereign Diamonds Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Sovereign Diamonds Ltd vs industry peers?
Sovereign Diamonds Ltd revenue CAGR is -9.25% , compared to the industry median CAGR of 5.39% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 20 91.1
Gross Profit 0.6 1.4
Operating Profit 0.4 2.5
Net Profit 0 1
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.68 1.17
ROE 0.07 5.76
ROCE 4.99 7
Cash Conversion Cycle (days) 425.33 140

Valuation & price assessment

Q.1 Stock return of Sovereign Diamonds Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 8.6% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 8.6% 33% -3.2% -38.4%
Q.3 Valuation ratios of Sovereign Diamonds Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings - 3.86 55.94
Price to Book 1.05 0.64 1.89
Price to Sales 0.84 0.34 1.24
EV to EBITDA -3.59 5.18 17.15

Check more companies

1. Thangamayil Jeweller
2. PC Jeweller
3. Bluestone Jewellery
4. Sky Gold & Diamonds
5. Senco Gold
6. Goldiam Internatl.
7. Vaibhav Global
8. Rajesh Exports
9. D.P. Abhushan
10. Shringar House
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