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Check Before You Invest : Sparkle Gold Rock Ltd

BSE: 530037 NSE: ISIN: INE618F01010
  |   Sector:  Textiles & Apparels   |   Industry:  Textile - Spinning

Snapshot

Q.1 Which industry/sub-sector does Sparkle Gold Rock Ltd belong to?
Sparkle Gold Rock Ltd belongs to the Textiles & Apparels sector, operating specifically within the Textile - Spinning segment.
Q.2 Is Sparkle Gold Rock Ltd a good quality company?
Sparkle Gold Rock 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 Sparkle Gold Rock Ltd undervalued or overvalued?
Sparkle Gold Rock 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 27.73 -
Price to Book 12.72 0.39
Price to Sales 0.44 0.17
EV to EBITDA 19.78 -30.29
Q.4 Is Sparkle Gold Rock Ltd a good buy now?
Sparkle Gold Rock 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 Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd revenue growth is 0% for FY-2025, which is below its 5-year CAGR of 9.64%, indicating slower growth.

Q.2 Gross Profit margin of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Gross profit margin which is the profit after deduction of direct costs, is -2.1% for FY-2025, which is above its 5-year median of -5.2%, indicating increasing margins.

Q.3 Operating Profit Margin of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -2.84% for FY-2025, which is above its 5-year median of -7.04% indicating increasing margins.

Q.4 Net Profit Margin of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Net Profit Margin is -2.72% for FY-2025, is above its 5-year median of -6.19%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -2.1 -5.2
Operating Profit Margin (%) -2.84 -7.04
Net Profit Margin (%) -2.72 -6.19

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Return on Asset is -7.14%, which is below its 5-year historical median of -5.87%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Return on capital employed is -12.91% for FY-2025, which is below its 5-year historical median of -10.47%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

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

Q.7 Debt to Equity ratio of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Debt-to-Equity ratio is 0.40, which is above the industry average of 0.36, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Sparkle Gold Rock Ltd?
Sparkle Gold Rock Ltd Debt to cash flow from operations is -1.12, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sparkle Gold Rock Ltd?

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

Peer comparison (industry-wise, mcap)

E: How does Sparkle Gold Rock Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sparkle Gold Rock Ltd vs industry peers?
Sparkle Gold Rock Ltd revenue CAGR is 9.64%, compared to the industry median CAGR of 1.47%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) - 1.5
Gross Profit Growth (%) -105.9 1.8
Operating Profit Growth (%) 0 -1.5
Net Profit Growth (%) -107.8 2.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.62 0.94
ROE (%) - -
ROCE (%) -12.91 6.13
Cash Conversion Cycle (days) 19.8 61

Valuation & price assessment

Q.1 Stock return of Sparkle Gold Rock Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 42.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
42.5% 103% 158.3% -22%
Q.2 Valuation ratios of Sparkle Gold Rock Ltd vs historical?
The current P/E ratio of 27.73 is higher than its historical median of , 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 27.73 - 9.43
Price to Book 12.72 0.39 0.72
Price to Sales 0.44 0.17 0.40
EV to EBITDA 19.78 -30.29 7.20

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