Sanstar Limited

Basic Materials — Chemicals · NSE

₹98.00+₹0.72 (+0.74%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sanstar Limited manufactures and sells plant-based specialty products and ingredient solutions in India and internationally.

IndustryChemicals

SectorBasic Materials

Employees203

Annual revenue₹772 Cr

How does it make money?

Turns over ₹772 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 203 employees supports ₹3.80 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.80 Cr

Who are its competitors?

The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.3% 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.

Peer median ROE15.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -36% while net margin moved +29% 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-36%

Margin effect+29%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 13.8% a year
✗ Profit has declined at 6.2% a year
✗ Profit fell 21.3% in the latest year

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

37/ 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.

Historical Valuation

Current P/E

40.8x

2Y Median

35.1x

29 monthly readings · mean 37.0x · range 23.8x–58.4x

Sector Median

33.8x

median of 3 sector peers

⚠️Current valuation is approximately 16% above its 2y median of 35.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 21% above the peer median of 33.8x.

vs. its own history

Fair

35.1x median over 29 months · +16%

vs. sector peers

Expensive

33.8x median of 3 peers · +21%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

40.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 82% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 22.3% to 5.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.9% to 5.3% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 2.87x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 59% against revenue up -36% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 82% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 2.87x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 21% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 22.3% to 5.0%. 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.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 4%✓ 6.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹56 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 5.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 35.1x✓ 40.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 11 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
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 3 neutral · 6 weak

Market Cap

₹1,963 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

40.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.57x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.4

Profitable

Profitable on a per-share basis

ROE

5.0%

Weak

Weak capital efficiency

ROCE

5.3%

Weak

Low return on total capital employed

Debt/Equity

2.87x

High

High leverage

Revenue Growth (YoY)

22.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-21.3%

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

-₹56 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

5.4%

Average

Average bottom-line conversion

Current Ratio

5.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.21

Market-like

Moves roughly in line with the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

104.7 / 107.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

29.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,205 Cr	₹1,079 Cr	₹942 Cr	₹772 Cr	-13.8%
EBITDA	₹75 Cr	₹107 Cr	₹74 Cr	₹49 Cr	-13.4%
EBITDA Margin	6.3%	9.9%	7.8%	6.3%	—
PAT (Net Profit)	₹42 Cr	₹67 Cr	₹44 Cr	₹34 Cr	-6.2%
EPS	₹2.29	₹3.66	₹2.58	₹1.89	-6.3%
ROE	22.3%	26.3%	6.6%	5.0%	—
ROCE	25.9%	31.4%	8.8%	5.3%	—
Total Debt	₹112 Cr	₹128 Cr	₹27 Cr	₹20 Cr	-43.7%
Free Cash Flow	-₹81 Cr	-₹12 Cr	-₹54 Cr	-₹56 Cr	—

🔴 Revenue has shrunk at 13.8% a year over 3 years.

🔴 EBITDA has shrunk at 13.4% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 6.3% over 3 years.

🔴 PAT (Net Profit) has shrunk at 6.2% a year over 3 years.

🔴 EPS has shrunk at 6.3% a year over 3 years.

🔴 ROE has fallen from 22.3% to 5.0% over 3 years (-17.4 pts).

🔴 ROCE has fallen from 25.9% to 5.3% over 3 years (-20.6 pts).

🟢 Total Debt has shrunk at 43.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹803 Cr

Total Liabilities

₹109 Cr

Cash & Equivalents

₹24 Cr

Operating Cash Flow

₹90 Cr

Capex

-₹146 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.0%

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 mixed5 general

SANSTAR LIMITED Share Price - Live NSE: SANSTAR Stock Price & Chart

Upstox, 16 Oct

Sanstar Ltd Secures ₹198 Crore Investment from Corn Products Development at ₹110 Per Share

Sahi, 24 Jun

Sanstar Share Price Forecast to 2030

Univest, 27 Jul

Sanstar shares begin trading on NSE after preferential allotment

scanx.trade, 10 Jul

Sanstar Ltd leads losers in 'B' group

Business Standard, 25 May

Sanstar (SANSTAR.NS) Q2 2026 Results: The Latest Financial Metrics Are Now Available at the Close; The Stock Ends Up 1.02% on the Day - Forward Guidance Trends

siam.in, 26 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
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

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

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.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑