Sabar Flex India Limited

Sector n/a · NSE

₹26.65−₹0.95 (−3.44%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

The 60-second version of Sabar Flex India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹148 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation.

EBITDA margin3.1%

Net margin0.5%

What is its competitive advantage?Little sign of one

Returns on capital of 7.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE7.1%

ROE1.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +104% while net margin moved -78% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+104%

Margin effect-78%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

35/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

16.7x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 6.6% to 3.1% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 10.2% to 1.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.7% to 7.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 176% against revenue growth of 104% — customers are taking longer to pay.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 176% against revenue up 104% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.3x to 1.4x.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 28% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 6.6% to 3.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 176% against revenue up 104%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 10.2% to 1.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 26.9% CAGR
Latest reported year was 17.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 3.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 5.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 9 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 6 neutral · 4 weak

Market Cap

₹51 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

1.9%

Weak

Weak capital efficiency

ROCE

7.1%

Weak

Low return on total capital employed

Debt/Equity

0.67x

Moderate

Moderate leverage

Revenue Growth (YoY)

17.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-83.7%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹26.65

Gross Margin

4.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.41

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

9.5 / 8.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

0.0

Oversold zone

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹72 Cr	₹95 Cr	₹126 Cr	₹148 Cr	+26.9%
EBITDA	₹5 Cr	₹6 Cr	₹10 Cr	₹5 Cr	-1.6%
EBITDA Margin	6.6%	5.8%	7.7%	3.1%	—
PAT (Net Profit)	₹2 Cr	₹2 Cr	₹4 Cr	₹1 Cr	-23.9%
EPS	₹1.06	₹1.36	₹2.64	—	—
ROE	10.2%	8.4%	13.4%	1.9%	—
ROCE	16.7%	14.5%	21.8%	7.1%	—
Total Debt	₹25 Cr	₹26 Cr	₹22 Cr	₹25 Cr	-0.5%
Free Cash Flow	₹1 Cr	-₹3 Cr	-₹1 Cr	-₹6 Cr	—

🟢 Revenue has grown at 26.9% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-1.6% a year).

🔴 EBITDA Margin has fallen from 6.6% to 3.1% over 3 years (-3.5 pts).

🔴 PAT (Net Profit) has shrunk at 23.9% a year over 3 years.

🔴 ROE has fallen from 10.2% to 1.9% over 3 years (-8.3 pts).

🔴 ROCE has fallen from 16.7% to 7.1% over 3 years (-9.6 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.5% a year).

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹6 Cr.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹74 Cr

Total Liabilities

₹37 Cr

Total Debt

₹25 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹0 Cr

Recent News

1 negative5 general

Compare with

Equitymaster, 30 Sept

Sabar Flex India Limited CFO Tinkle Zapatbahadur Rawal Resigns Effective May 12, 2026

scanx.trade, 12 MayManagement

🔴Potentially negativeA senior departure, and an auditor's resignation especially, is worth understanding before anything else in this report.

Sabar Flex India Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Sabar Flex India (NSEI:SABAR) - Stock Analysis

Simply Wall Street, 21 Sept

SABAR Stock Price and Chart — NSE:SABAR

TradingView, 06 Oct

Sati Poly Plast IPO to open for subscription on July 12; price band fixed at ₹123 to ₹130 apiece

Livemint, 08 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟡Financial HealthAdequate9.7/20

🔴GrowthWeak8.9/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 20% a year26.9% CAGR
✓EBITDA margin holds above 1%3.1%
✗Debt / EBITDA falls below 3x5.5x
✗Free cash flow remains positive-₹6 Cr
✗Interest cover stays above 3x1.4x