Span Divergent Limited

Consumer Defensive — Packaged Foods · BSE

₹23.15+₹1.10 (+4.99%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

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

What does this company do?

Span Divergent Limited, through its subsidiaries, engages in the food, agriculture, and life science businesses in India. It operates through Cashew processing, Tissue Culture, and Trading segments. The company is involved in the processing of raw cashew nuts.

IndustryPackaged Foods

SectorConsumer Defensive

Employees6

Annual revenue₹17 Cr

How does it make money?

Turns over ₹17 Cr a year. Of every ₹100 of sales, about ₹-15 reaches shareholders as profit, with ₹-8 left at the operating level before interest, tax and depreciation. Each of its 6 employees supports ₹2.82 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.82 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 -21.5% 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 ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +35% while net margin moved -63% 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+35%

Margin effect-63%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

36/ 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

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 36% over 3 years.

🔴 What Needs Attention0

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

Red Flags

6 items require attention · 3 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -5.7x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 18.8 points, from 11.1% to -7.7%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -0.8x to -5.7x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹0 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 33% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 36% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 11.1% to -7.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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.
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

1Revenue growth stays above 8% a year✓ 10.5% CAGR
Latest reported year was -4.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -10%✓ -7.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -5.7x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ -21.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

1 good · 3 neutral · 7 weak

Market Cap

₹17 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.74x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-5.78

Loss-making

Negative earnings per share — the business is losing money

ROE

-16.8%

Weak

Weak capital efficiency

ROCE

-21.5%

Weak

Low return on total capital employed

Debt/Equity

0.73x

Moderate

Moderate leverage

Revenue Growth (YoY)

-4.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-172.7%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-126.8%

Weak

Thin margins leave little room for error

Net Margin

-20.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.10

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.62

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

24.6 / 28.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹13 Cr	₹12 Cr	₹9 Cr	₹17 Cr	+10.5%
EBITDA	₹1 Cr	₹2 Cr	₹1 Cr	-₹1 Cr	—
EBITDA Margin	11.1%	18.1%	6.5%	-7.7%	—
PAT (Net Profit)	-₹5 Cr	₹1 Cr	-₹1 Cr	-₹3 Cr	—
EPS	₹-9.93	₹1.79	₹-2.33	₹-5.38	—
Total Debt	₹11 Cr	₹9 Cr	₹8 Cr	₹7 Cr	-13.8%
Free Cash Flow	₹2 Cr	₹2 Cr	₹2 Cr	-₹0 Cr	—

🟢 Revenue has grown at 10.5% a year over 3 years.

🔴 EBITDA has turned negative, from ₹1 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 11.1% to -7.7% over 3 years (-18.8 pts).

🟢 Total Debt has shrunk at 13.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹29 Cr

Total Liabilities

₹19 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.2%

Corporate Actions

Ex-Dividend Date

16 Jul 2013

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

3 mixed1 negative2 general

Span Divergent schedules 46th AGM for September 28, 2026

scanx.trade, 02 Sept

Span Divergent reports consolidated net loss of Rs 1.05 crore in the June 2026 quarter

Business Standard, 11 AugResults

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

Neev Jogani Buys 24.8% Stake in Span Divergent Through Allotment

Whalesbook, 02 Apr

HPCL slumps 4% while BPCL gains despite Q1 net loss; decoding the divergent stock price reaction

Upstox, 23 JulResults

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

SREA Q2 2026 Earnings: EPS Beat Estimates, Revenue Disclosure Absent - Quarterly Financial Update

https://www.dars.gov.et/, 15 OctResults

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

Precision Camshafts consolidated net profit declines 55.10% in the June 2026 quarter

Business Standard, 11 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Revenue growth is negative (-4.8%) 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.

DalalBaazaar Thesis

MiddlingFinancial Health · Growth · Valuation

WeakBusiness Quality · 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.

3 of 5 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑