Sapphire Foods (SAPPHIRE)

FairStock Score: 18/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth of 8.64% indicates the restaurant business is still expanding despite challenges.
• Positive free cash flow of ₹171 Cr provides some cushion for debt service and capital expenditure.
• Altman Z-Score of 3.24 suggests solvency risk is currently low.
• Piotroski F-Score of 6/9 points to a reasonably stable financial position.
• Latest quarter sales of ₹814 Cr show significant operating scale.

Concerns

• Net profit is negative in the latest quarter at -₹5 Cr and profit growth is -78.14%; P/E is meaningless and ROE is -1.26%.
• Valuation is extremely expensive: P/B of 3.99, EV/EBITDA of 153.88, and DCF intrinsic value of ₹1.29 against a price of ₹173.45.
• Promoter holding is only 26.07% and there is no dividend, limiting minority shareholder alignment and cash returns.
• Debt/Equity of 0.92 combined with negative ROE and high valuation leaves no margin of safety.

AI Analysis

Let me begin with the first principle: never lose money. Sapphire Foods looks like a business I would not bet on at this price. The restaurant business can be wonderful, but this particular operation is currently earning nothing. Sales grew 8.64% to ₹814 Cr in the latest quarter, yet net profit was minus ₹5 Cr, and annual profit growth is down 78.14%. ROE is -1.26% and ROCE is only 5.76%, so managers are not generating adequate returns on the capital employed. The balance sheet has debt/equity of 0.92, which is tolerable in good times, but not comfortable when profits are negative. Altman Z-Score of 3.24 says bankruptcy risk is low today, and FCF of ₹171 Cr is a bright spot. Piotroski F-Score of 6/9 also suggests no immediate distress. But a good business scorecard does not make a good investment if the price is insane. At ₹173.45, market cap is ₹6,566 Cr, or roughly 38 times free cash flow. P/B is 3.99 against a book value of ₹43.50; EV/EBITDA is an extraordinary 153.88. The DCF value shown is ₹1.29, leaving no margin of safety. Promoter holding is just 26.07%—I want owners who eat their own cooking. There is no dividend to compensate while waiting. The stock has fallen from ₹347.90 to ₹173.45, and FairStock Score is 15/100, which is labelled RISKY. Falling prices are not automatically cheap; a good business at the wrong price can still be a bad investment. This is a possible turnaround, but I need evidence of margin recovery, sustained positive earnings, and deleveraging before investing. For now, I will watch, not buy.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer