Sarla Performanc (SARLAPOLY)
CyclicalFairStock Score: 52/100 — MIXED
Score breakdown: P/E: 3/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 1/1
Key Financials
| Current Price | ₹101.19 |
| Market Cap | ₹804.49 Cr |
| P/E Ratio | 215.3 |
| ROCE | 14.92% |
| ROE | 13.32% |
| Dividend Yield | 1.98% |
| Profit Growth | 76.1% |
| Debt/Equity | 0.4 |
| Sales Growth | 10.6% |
| Free Cash Flow | ₹86,80,526.08 Cr |
| Promoter Holding | 57.07% |
| 52-Week Range | ₹68.4 — ₹111 |
| Sector | Textiles & Apparels |
| Book Value | ₹52.27 |
Strengths
- Trailing P/E of 11.86 and P/B of 1.52 are not stretched if earnings ever stabilise.
- ROE of 13.32% and ROCE of 14.92% show decent capital efficiency at the operating level.
- Debt/equity of 0.38 is moderate and not alarming.
- Promoter holding of 57.07% provides ownership alignment.
Concerns
- Sales are down 12.62% and profit is down 62.80%, showing severe business deterioration.
- Piotroski F-Score of 3/9 signals weak overall financial health.
- Free cash flow is negligible, raising quality-of-earnings questions.
- Latest quarter annualised earnings imply a far higher forward P/E than the trailing 11.86, creating value-trap risk.
AI Analysis
Buffett here wouldn't rush into Sarla Performanc. Textiles is a tough, commodity-like business where pricing power is rare, and the latest numbers confirm the strain. Sales have fallen 12.62%, and profit has collapsed 62.80% -- that is not a franchise, that is a business in a down cycle. The trailing P/E of 11.86 looks cheap, but that is based on yesterday's earnings, not today's run-rate. Last quarter net profit was only ₹5 Cr on sales of ₹89 Cr; annualised, that suggests earnings closer to ₹20 Cr, so the real P/E is far above 11.86. A low P/E with falling earnings is often a value trap. ROE of 13.32% and ROCE of 14.92% are decent, but they will deteriorate if profit keeps shrinking. Debt/equity of 0.38 is manageable, and promoter holding of 57.07% is reassuring, but good owners cannot overcome a weak industry. The Piotroski F-score of only 3/9 warns about financial health -- six of nine signs are missing. The dividend yield of 3.57% looks attractive, but with earnings down this much, that dividend is not safe. Book value is ₹59.29; at ₹89.94 I am paying 1.52 times book for declining returns -- no margin of safety. Free cash flow is negligible, so I cannot rely on cash generation to protect me. This may be a cyclical or a turnaround, but I don't speculate on either. If the company stabilises sales, rebuilds margins above the latest quarter, and shows consistent free cash flow, I might revisit. Until then, this is a pass.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer