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INVESTMENT INSIGHTS

Check Before You Invest : Baba Arts Ltd

BSE: 532380 NSE: ISIN: INE893A01036
  |   Sector:  Media   |   Industry:  Film Production, Distribution & Entertainment

Snapshot

Q.1 Which industry/sub-sector does Baba Arts Ltd belong to?
Baba Arts Ltd belongs to the Media sector, operating specifically within the Film Production, Distribution & Entertainment segment.
Q.2 Is Baba Arts Ltd a good quality company?
Baba Arts 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 Baba Arts Ltd undervalued or overvalued?
Baba Arts Ltd appears Fair, as its key valuation ratios are in line with 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 107.26 37.40
Price to Book 2.56 2.97
Price to Sales 4.67 7.64
EV to EBITDA 67.35 24.41
Q.4 Is Baba Arts Ltd a good buy now?
Baba Arts 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 Baba Arts Ltd?
Baba Arts Ltd revenue growth is -51.2% for FY-2025, which is below its 5-year CAGR of 98.81%, indicating slower growth.

Q.2 Gross Profit margin of Baba Arts Ltd?
Baba Arts Ltd Gross profit margin which is the profit after deduction of direct costs, is 35.8% for FY-2025, which is above its 5-year median of 24.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Baba Arts Ltd?
Baba Arts Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.73% for FY-2025, which is in line with its 5-year median of 12.99% indicating stable margins.

Q.4 Net Profit Margin of Baba Arts Ltd?
Baba Arts Ltd Net Profit Margin is 25.74% for FY-2025, is above its 5-year median of 21.05%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 35.8 24.5
Operating Profit Margin (%) 12.73 12.99
Net Profit Margin (%) 25.74 21.05

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Baba Arts Ltd?
Baba Arts Ltd Return on Asset is 5.01%, which is below its 5-year historical median of 7.55%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Baba Arts Ltd?
Baba Arts Ltd Return on capital employed is 7.45% for FY-2025, which is below its 5-year historical median of 11.18%. 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 Baba Arts Ltd?
Baba Arts Ltd Return on equity is 5.52% for FY-2025, which is below its 5-year historical median of 8.1%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Baba Arts Ltd?
Baba Arts Ltd Cash conversion cycle is 384 days, above its 5-year historical median of 164 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) 0.19 0.44
ROE (%) 5.52 8.1
ROCE (%) 7.45 11.18
Cash Conversion Cycle 384 days 164 days

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

Q.9 Debt to Equity ratio of Baba Arts Ltd?
Baba Arts Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.06, indicating lower debt levels in the industry.

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

Ownership & governance

D: Promoter shareholding and pledge status of Baba Arts Ltd?

Q.1 Promoter shareholding and pledge status of Baba Arts Ltd?
Promoters hold 74.68% of the Baba Arts Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Baba Arts Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Baba Arts Ltd vs industry peers?
Baba Arts Ltd revenue CAGR is 98.81%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -51.2 0
Gross Profit Growth (%) -28.1 5.9
Operating Profit Growth (%) -59.7 3.8
Net Profit Growth (%) -26.9 9.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.19 0.1
ROE (%) 5.52 -
ROCE (%) 7.45 0.07
Cash Conversion Cycle (days) 384.4 90

Valuation & price assessment

Q.1 Stock return of Baba Arts Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 18% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 18% -7% 1.4% 50.4%
Q.2 Valuation ratios of Baba Arts Ltd vs historical?
The current P/E ratio of 107.26 is higher than its historical median of 37.40, 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 107.26 37.40 28.25
Price to Book 2.56 2.97 1.04
Price to Sales 4.67 7.64 6.25
EV to EBITDA 67.35 24.41 10.21

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