Sharat Industries Limited

Consumer Defensive — Farm Products · NSE

₹155.29+₹1.29 (+0.84%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sharat Industries Limited engages in shrimp aquaculture activities in India. The company offers raw and cooked white shrimps, cultured marine worms, and vannamei seedlings.

IndustryFarm Products

SectorConsumer Defensive

Employees148

Annual revenue₹505 Cr

How does it make money?

Turns over ₹505 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 148 employees supports ₹3.41 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.41 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES 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?Some evidence

ROCE of 18.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +57% while net margin moved +56% 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+57%

Margin effect+56%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 10.3% is moderate

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

50/ 100

Fair

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

36.2x

Sector Median

43.3x

median of 4 sector peers

🟢Against its sector it trades 16% below the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Fair

43.3x median of 4 peers · -16%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

18.1x

PEG

1.04

What's Good / What's Bad

🟢 What's Going Well1

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

5 items require attention · 1 high · 4 watch

🔴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.
🟡Debt is increasingFinancial
Total debt is up 38% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 79% against revenue up 57% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 95% against revenue up 57% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 27% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
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 3.2x 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 79% against revenue up 57%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 12% a year✓ 16.2% CAGR
Latest reported year was 4.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.2x
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✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 10 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

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹609 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

36.2x

Fair

Fairly valued against the generic band

P/B Ratio

2.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.29

Profitable

Profitable on a per-share basis

ROE

10.3%

Moderate

Moderate capital efficiency

ROCE

18.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

4.4%

Modest

Modest growth

Profit Growth (YoY)

15.1%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.7%

Average

Average margins

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

2.04

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.03

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

RSI (14)

35.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹322 Cr	₹290 Cr	₹365 Cr	₹505 Cr	+16.2%
EBITDA	₹24 Cr	₹22 Cr	₹31 Cr	₹40 Cr	+17.8%
EBITDA Margin	7.6%	7.5%	8.4%	7.9%	—
PAT (Net Profit)	₹6 Cr	₹6 Cr	₹10 Cr	₹16 Cr	+34.8%
EPS	₹2.11	₹1.9	₹3.04	₹4.06	+24.4%
ROE	8.3%	7.0%	7.3%	10.3%	—
ROCE	18.2%	17.2%	17.0%	18.1%	—
Total Debt	₹93 Cr	₹100 Cr	₹116 Cr	₹129 Cr	+11.2%
Free Cash Flow	₹10 Cr	-₹3 Cr	-₹28 Cr	-₹6 Cr	—

🟢 Revenue has grown at 16.2% a year over 3 years.

🟢 EBITDA has grown at 17.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.9% over 3 years.

🟢 PAT (Net Profit) has grown at 34.8% a year over 3 years.

🟢 EPS has grown at 24.4% a year over 3 years.

🟢 ROE has risen from 8.3% to 10.3% over 3 years (+2.0 pts).

🟡 ROCE has held roughly flat at 18.1% over 3 years.

🔴 Total Debt has grown at 11.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹316 Cr

Total Liabilities

₹161 Cr

Cash & Equivalents

₹17 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

59.6%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 negative5 general

SHINDL Stock Price and Chart — NSE:SHINDL

TradingView, 20 Apr

Sharat Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Sharat Industries passes all 5 resolutions at 36th AGM

scanx.trade, 01 Oct

Sharat Industries Limited (SHINDL) Company Information

Simply Wall Street, 22 Apr

Sharat Industries Q4 Profit Slumps 80% to ₹10 L Despite 28% Revenue Growth

Sahi, 28 MayResults

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

Seafood stocks make a splash as cargoes skirt Hormuz route

Livemint, 26 May

Watch Items

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

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Valuation

WeakProfitability · Risk

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 ↑