⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SAPPHIRE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.3
| Stock Code | SAPPHIRE | Market Cap | 6,063 Cr. | Current Price | 188 ₹ | High / Low | 368 ₹ |
| Book Value | 38.7 ₹ | Dividend Yield | 0.00 % | ROCE | 5.11 % | ROE | 1.50 % |
| Face Value | 2.00 ₹ | DMA 50 | 230 ₹ | DMA 200 | 277 ₹ | Chg in FII Hold | -2.09 % |
| Chg in DII Hold | 0.29 % | PAT Qtr | -17.3 Cr. | PAT Prev Qtr | -3.40 Cr. | RSI | 31.7 |
| MACD | -15.0 | Volume | 2,17,564 | Avg Vol 1Wk | 4,82,667 | Low price | 179 ₹ |
| High price | 368 ₹ | Debt to equity | 1.04 | 52w Index | 4.67 % | Qtr Profit Var | -1,717 % |
| EPS | -0.65 ₹ | Industry PE | 108 |
📊 Core Financials
- Quarterly PAT worsened to -17.3 Cr from -3.40 Cr, indicating deepening losses.
- ROE at 1.50% and ROCE at 5.11% are very weak, reflecting poor capital efficiency.
- Debt-to-equity ratio at 1.04 shows high leverage, raising financial risk.
- EPS at -0.65 ₹ highlights negative earnings, impacting cash flow stability.
💹 Valuation Indicators
- P/E ratio not applicable due to negative earnings.
- P/B ratio: ~4.86 (188 ₹ / 38.7 ₹ book value), showing premium pricing despite losses.
- PEG ratio unavailable, as growth is negative.
- Intrinsic value appears lower than current price, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Sapphire Foods operates as a franchisee of Yum! Brands, managing KFC and Pizza Hut outlets in India.
- Competitive advantage lies in brand association and established QSR footprint.
- Profitability remains weak due to high operating costs and debt burden.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 175–185 ₹ range (near recent low of 179 ₹ and RSI at 31.7, oversold zone).
- Long-term holding only recommended for high-risk investors betting on QSR industry growth.
- Better to wait for earnings turnaround before accumulating heavily.
Positive
- Strong brand backing from Yum! Brands (KFC, Pizza Hut).
- DII holdings increased (+0.29%), showing some domestic institutional support.
- Stock trading near oversold RSI levels, potential for technical rebound.
Limitation
- Negative PAT and EPS (-0.65 ₹).
- High debt-to-equity ratio (1.04), raising financial risk.
- No dividend yield, limiting investor returns.
Company Negative News
- Quarterly losses widened significantly (-17.3 Cr vs -3.40 Cr).
- FII holdings decreased (-2.09%), showing reduced foreign investor confidence.
- Stock trading below 50 DMA (230 ₹) and 200 DMA (277 ₹), reflecting bearish trend.
Company Positive News
- DII holdings increased slightly (+0.29%).
- Strong franchise partnerships provide long-term brand stability.
Industry
- Industry PE at 108, reflecting high valuations across QSR sector.
- Quick service restaurants expected to grow steadily with rising urban demand.
Conclusion
- Sapphire Foods faces weak fundamentals with losses, high debt, and stretched valuations.
- Accumulation only near 175–185 ₹ for speculative investors willing to take higher risk.
- Long-term holding depends on earnings turnaround and improved profitability in the QSR segment.
I can also prepare a side-by-side comparison with Devyani International to highlight how Sapphire stacks up against its closest peer in the QSR space. Would you like me to draft that?