Sasken Technol. (SASKEN)

FairStock Score: 34/100 — RISKY

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

Key Financials

Strengths

• Debt/Equity of 0.03 means the balance sheet is nearly debt-free.
• Revenue growth of 73.08% and profit growth of 34.39% show strong recent momentum.
• Piotroski F-Score of 7/9 indicates solid recent financial health.
• Promoter holding of 43.08% aligns owner interests with minority shareholders.
• Dividend yield of 2.18% provides some cash return to shareholders.

Concerns

• ROE of 7.18% and ROCE of 7.41% are weak for a supposed quality compounder.
• Latest quarter net margin is thin: ₹250 Cr sales yielded only ₹9 Cr net profit, roughly 3.6%.
• P/E of 41.01 and P/B of 2.50 are rich given modest returns; FairStock Score of 31/100 flags risk.
• 52-week range of ₹991–₹2,785 reflects high volatility and cyclical uncertainty.

AI Analysis

At ₹1,287, Sasken commands a market cap of ₹1,739 Cr and a P/E of 41. That is not a price I would pay for a business earning only 7.18% ROE and 7.41% ROCE. Graham would remind me that a good business is not a good investment at too high a price. The encouraging signs are a clean balance sheet—debt/equity of 0.03—and a Piotroski F-score of 7/9, indicating no immediate financial stress. The 73% sales growth is eye-catching, but the latest quarter tempers it: ₹250 Cr of sales produced only ₹9 Cr of net profit, about a 3.6% net margin. That is high-volume, low-return work, not evidence of a durable moat. In my experience, moats reveal themselves in consistently high returns on capital; here, ROE and ROCE are both around 7%, far below what I expect from a compounder. Profit growth of 34% also lags sales growth, so the expansion is not translating into proportional earnings. A dividend yield of 2.18% and promoter holding of 43.08% are nice, but I invest for compounding, not yield. The PEG of 0.76 looks tempting, but one year of growth is not a franchise. With a 52-week range of ₹991 to ₹2,785, this has been a volatile, cyclical ride, not a steady business. The FairStock score of 31/100 reinforces my caution. I would need a much lower price, or clear evidence of sustained margins and higher returns on capital, before acting. Today, this is a speculative growth story wearing value clothing. I prefer margin of safety.

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