Sarveshwar Foods Limited

Consumer Defensive — Packaged Foods · NSE

₹3.63+₹0.02 (+0.55%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by 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, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sarveshwar Foods Limited processes, manufactures, markets, and distributes basmati and non-basmati rice in India and internationally.

IndustryPackaged Foods

SectorConsumer Defensive

Employees32

Annual revenue₹1,346 Cr

How does it make money?

Turns over ₹1,346 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 32 employees supports ₹42.05 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹42.05 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. 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 14.4% 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 ROE51.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +95% while net margin moved +109% 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+95%

Margin effect+109%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.38 — historically steadier than the index
✗ 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

57/ 100

Average

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

Valuation

77/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

13.0x

3Y Median

14.9x

40 monthly readings · mean 21.2x · range 1.6x–57.2x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 13% below its 3y median of 14.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 75% below the peer median of 51.7x.

vs. its own history

Fair

14.9x median over 40 months · -13%

vs. sector peers

Cheap

51.7x median of 4 peers · -75%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.7x

PEG

0.22

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 14% over 3 years.
Return on equity is rising
ROE has improved from 3.6% to 6.7%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹62 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 35% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 75% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The debt load needs earnings to hold up
Debt is 3.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.
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.

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

1Revenue growth stays above 19% a year✓ 25.0% CAGR
Latest reported year was 18.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 3%✓ 5.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.5x
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✗ -₹62 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹447 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.0x

Cheap

Cheap against the generic band

P/B Ratio

0.93x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.28

Profitable

Profitable on a per-share basis

ROE

6.7%

Weak

Weak capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.53x

Low

Conservative leverage

Revenue Growth (YoY)

18.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

0.0%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹62 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.2%

Weak

Thin margins leave little room for error

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.78

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3.6 / 3.6

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

54.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹689 Cr	₹870 Cr	₹1,136 Cr	₹1,346 Cr	+25.0%
EBITDA	₹37 Cr	₹58 Cr	₹68 Cr	₹71 Cr	+24.0%
EBITDA Margin	5.4%	6.7%	6.0%	5.3%	—
PAT (Net Profit)	₹8 Cr	₹17 Cr	₹27 Cr	₹32 Cr	+59.8%
EPS	₹2.82	₹0.17	₹0.26	₹0.29	-53.1%
ROE	3.6%	6.6%	8.8%	6.7%	—
ROCE	13.4%	20.2%	21.0%	14.4%	—
Total Debt	₹293 Cr	₹298 Cr	₹304 Cr	₹252 Cr	-4.9%
Free Cash Flow	-₹25 Cr	-₹10 Cr	₹4 Cr	-₹62 Cr	—

🟢 Revenue has grown at 25.0% a year over 3 years.

🟢 EBITDA has grown at 24.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.3% over 3 years.

🟢 PAT (Net Profit) has grown at 59.8% a year over 3 years.

🔴 EPS has shrunk at 53.1% a year over 3 years.

🟢 ROE has risen from 3.6% to 6.7% over 3 years (+3.0 pts).

🟢 ROCE has risen from 13.4% to 14.4% over 3 years (+1.0 pts).

🟢 Total Debt has shrunk at 4.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,089 Cr

Total Liabilities

₹611 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

-₹61 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

42.1%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

1 positive1 mixed4 general

Sarveshwar Foods' (NSE:SARVESHWAR) Profits May Not Reveal Underlying Issues

Simply Wall Street, 13 Jun

Sarveshwar Foods (SARVESHWAR) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Why Is Sarveshwar Foods Share Price Falling Key Reasons 2026

Univest, 29 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Sarveshwar Foods Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Compare with

Equitymaster, 17 Oct

Sarveshwar Foods FY26 net profit rises 18% to ₹31.82 crore

scanx.trade, 30 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

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

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingBusiness Quality · Financial Health · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑