SAPPHIRE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 2.3

📊 Core Financial Analysis

Profitability & Returns

PAT Qtr: -₹1.74 Cr vs ₹4.75 Cr — sharp reversal into loss, Qtr Profit Var: -121%, signaling operational stress.

EPS: ₹0.28 — extremely low, barely profitable over trailing periods.

ROE: 1.85% & ROCE: 5.76% — weak return metrics, indicating poor capital efficiency.

Debt & Leverage

Debt-to-Equity: 0.92 — relatively high for a consumer-facing business, raises concerns about financial flexibility.

No dividend — typical for companies reinvesting or struggling with profitability.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 603 Excessively overvalued, even by industry standards (PE: 189)

P/B Ratio ~7.5 Rich valuation despite weak ROE

PEG Ratio -33.6 Negative PEG implies declining earnings — major red flag

Intrinsic Value ~₹180–₹220 Current price is ~40–45% above fair value based on fundamentals

🏢 Business Model & Competitive Edge

Operates in QSR (Quick Service Restaurant) space — likely franchisee of global brands (e.g., KFC, Pizza Hut).

Business model relies on consumer footfall, brand loyalty, and operational scale.

Competitive advantage lies in brand partnerships, but recent losses suggest execution or cost issues.

High fixed costs and debt make it vulnerable to demand shocks.

📉 Technical & Sentiment Indicators

RSI: 44.9 — mildly oversold, but not a strong reversal signal.

MACD: 2.21 — weak bullish crossover.

Volume significantly below average — declining investor interest.

DMA 50 ≈ DMA 200 — consolidation zone.

FII holding up, DII down — mixed institutional sentiment.

🧠 Investment Guidance

🔍 Entry Zone (If Undervalued)

Ideal Buy Range: ₹240–₹260

Closer to 52-week low and intrinsic value.

Only suitable for speculative investors betting on turnaround.

📈 Long-Term Holding View

Avoid for long-term holding unless

Profitability stabilizes and EPS improves.

ROE/ROCE rise above 10%.

Debt is reduced and margins expand.

Would you like help identifying stronger QSR or retail plays like Devyani International or Jubilant FoodWorks for comparison?

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