Sawaca Enterprises Limited

Basic Materials — Specialty Chemicals · BSE

₹0.27₹0.00 (0.00%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

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, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sawaca Enterprises Limited trades in various chemical products and scrap materials in India. It offers copper and aluminum scraps, SS scraps, SS pata patti, etc. to multi-national corporations and one-time customers; and cotton bales to traders and textile mills.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees8

Annual revenue₹38 Cr

How does it make money?

Turns over ₹38 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 8 employees supports ₹4.75 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.75 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, 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 0.5% 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 ROE22.3%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +1315% while net margin moved -105% 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+1315%

Margin effect-105%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 4.9 points over the period

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

59/ 100

Fair

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

27.0x

3Y Median

12.7x

40 monthly readings · mean 14.2x · range 6.8x–31.2x

Sector Median

40.4x

median of 4 sector peers

⚠️Current valuation is approximately 112% above its 3y median of 12.7x. 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 33% below the peer median of 40.4x.

vs. its own history

Expensive

12.7x median over 40 months · +112%

vs. sector peers

Cheap

40.4x median of 4 peers · -33%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 4.2% to -0.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 4.8% to 0.5% — often a sign of competition or overexpansion.

Red Flags

10 items require attention · 7 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1363% over 3 years, from ₹0 Cr to ₹4 Cr.
🔴High leverageFinancial
Debt/Equity of 6.38x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.6x — 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.
🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 23.3 points, from 27.6% to 4.3%.
🔴Receivables growing faster than salesFinancial
Receivables up 1688% against revenue up 1315% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.5x to 1.6x.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 286% over 3 years — each existing share owns a smaller slice of the company.
🟡Low reported insider holdingOwnership
Reported insider holding is 2.6%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 33% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 27.6% to 4.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 6.38x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 1688% against revenue up 1315%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 112% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 4.2% to -0.7%. 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.

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

1Revenue growth stays above 106% a year✓ 141.9% CAGR
Latest reported year was -63.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹15 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.0x

Fair

Fairly valued against the generic band

P/B Ratio

0.26x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.01

Profitable

Profitable on a per-share basis

ROE

-0.7%

Weak

Weak capital efficiency

ROCE

0.5%

Weak

Low return on total capital employed

Debt/Equity

6.38x

High

High leverage

Revenue Growth (YoY)

-63.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

1900.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-6.8%

Weak

Thin margins leave little room for error

Net Margin

1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.55

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.28

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

0.3 / 0.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3 Cr	₹7 Cr	₹82 Cr	₹38 Cr	+141.9%
EBITDA	₹1 Cr	₹1 Cr	₹2 Cr	₹2 Cr	+29.8%
EBITDA Margin	27.6%	11.2%	2.5%	4.3%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	-₹0 Cr	-₹0 Cr	—
EPS	₹0.05	₹0.04	₹-0.01	₹-0.01	—
ROE	4.2%	3.5%	-0.6%	-0.7%	—
ROCE	4.8%	4.7%	0.3%	0.5%	—
Total Debt	₹0 Cr	₹1 Cr	₹3 Cr	₹4 Cr	+144.6%
Free Cash Flow	₹0 Cr	-₹1 Cr	-₹37 Cr	-₹4 Cr	—

🟢 Revenue has grown at 141.9% a year over 3 years.

🟢 EBITDA has grown at 29.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 27.6% to 4.3% over 3 years (-23.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹1 Cr to -₹0 Cr.

🔴 EPS has turned negative, from ₹0.05 to ₹-0.01.

🔴 ROE has fallen from 4.2% to -0.7% over 3 years (-4.9 pts).

🔴 ROCE has fallen from 4.8% to 0.5% over 3 years (-4.3 pts).

🔴 Total Debt has grown at 144.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹68 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

2.6%

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 mixed4 general

Sawaca Enterprises (BSE:531893) - Stock Analysis

Simply Wall Street, 16 Oct

Sawaca Enterprises Q1 Results: Net profit turns positive at ₹90.81 lakh

scanx.trade, 14 AugResults

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

SAWACA ENTERPRISES LIMITED Share Price

Upstox, 28 Oct

13 penny stocks plunge up to 55% in a month — Are you affected?

The Economic Times, 15 Feb

Compare VINTRON INFORM with SAWACA FIN.

Equitymaster, 10 Oct

Sawaca Enterprises AGM voting results: All resolutions pass

scanx.trade, 01 OctResults

🟡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

Revenue growth is negative (-63.1%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

StrongGrowth

MiddlingValuation

WeakBusiness Quality · Financial Health · 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. 7 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑