Sparkle Gold Rock Limited

Basic Materials — Other Precious Metals & Mining · BSE

₹70.99−₹0.01 (−0.01%)

DalalBaazaar Score

56 / 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 both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Sparkle Gold Rock Limited engages in the sales and purchase of bullion, gems, jewellery, metals jewelry in India. The company trades in gold, silver, diamond jewelry, gemstones, and other accessories.

IndustryOther Precious Metals & Mining

SectorBasic Materials

Annual revenue₹112 Cr

How does it make money?

Turns over ₹112 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation.

EBITDA margin5.0%

Net margin3.7%

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

HINDALCO INDUSTRIES LTDP/E 12.3x · ROE 12.0%

VEDANTA LIMITEDP/E 10.4x · ROE 18.7%

What is its competitive advantage?Some evidence

ROCE of 99.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE99.4%

ROE128.4%

Peer median ROE18.7%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -0.31 — 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

55/ 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

7.4x

2Y Median

10.4x

28 monthly readings · mean 10.3x · range 3.1x–14.7x

Sector Median

12.2x

median of 4 sector peers

🟢Current valuation is approximately 29% below its 2y median of 10.4x. 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 39% below the peer median of 12.2x.

vs. its own history

Cheap

10.4x median over 28 months · -29%

vs. sector peers

Cheap

12.2x median of 4 peers · -39%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.4x

P/B

5.73x

EV/EBITDA

8.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Return on capital is rising
ROCE has improved from -8.8% to 99.4%.
High return on capital employed
ROCE of 99.4% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 7.4x the stock trades 29% below its own median of 10.4x.

🔴 What Needs Attention2

Debt is rising
Total debt is up 509% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 509% over 3 years, from ₹3 Cr to ₹16 Cr.
🔴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.
🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 99.4% 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.
Priced below its own history
The stock trades 29% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 39% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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

1EBITDA margin holds above 3%✓ 5.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹16 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 96%✓ 99.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 10.4x✓ 7.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

9 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹32 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.4x

Cheap

Cheap against the generic band

P/B Ratio

5.73x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹9.63

Profitable

Profitable on a per-share basis

ROE

128.4%

Strong

Strong capital efficiency

ROCE

99.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

589.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

211.1%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹70.99

ROA

13.3%

Good

Assets are working hard

Operating Margin

2.6%

Weak

Thin margins leave little room for error

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

1.13

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.31

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

69.2 / 67.0

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

62.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	—	—	₹9 Cr	₹112 Cr	—
EBITDA	-₹0 Cr	-₹0 Cr	-₹0 Cr	₹6 Cr	—
EBITDA Margin	—	—	-2.1%	5.0%	—
PAT (Net Profit)	-₹0 Cr	₹3 Cr	-₹0 Cr	₹4 Cr	—
EPS	₹-0.13	₹7.16	₹-0.55	₹9.28	—
ROE	—	234.8%	-21.8%	78.7%	—
ROCE	-8.8%	234.8%	-16.9%	99.4%	—
Total Debt	₹3 Cr	—	₹0 Cr	₹16 Cr	+82.6%
Free Cash Flow	-₹0 Cr	-₹0 Cr	-₹0 Cr	-₹16 Cr	—

🟢 EBITDA has turned positive, from -₹0 Cr to ₹6 Cr.

🟢 EBITDA Margin has risen from -2.1% to 5.0% over 3 years (+7.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹4 Cr.

🟢 EPS has turned positive, from ₹-0.13 to ₹9.28.

🔴 ROE has fallen from 234.8% to 78.7% over 3 years (-156.0 pts).

🟢 ROCE has risen from -8.8% to 99.4% over 3 years (+108.2 pts).

🔴 Total Debt has grown at 82.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹56 Cr

Total Liabilities

₹51 Cr

Total Debt

₹16 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹16 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.8%

Insider Holding

63.9%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

6 general

Sparkle Gold Rock Ltd. Peer Comparison – Compare with Others

Value Research, 03 Sept

Sparkle Gold Rock sets Sept 30 AGM for ₹2,020 crore capital hike

scanx.trade, 24 Sept

SPARKLE GOLD ROCK LIMITED Share Price

Upstox, 05 May

Supra Trends (BSE:511539) - Stock Analysis

Simply Wall Street, 12 Oct

Sparkle Gold Standalone June 2026 Net Sales at Rs 12.78 crore, up 589.71% Y-o-Y

Moneycontrol.com, 18 Aug

Sparkle Gold Rock appoints Dhadda and Associates as statutory auditor for 1 year

scanx.trade, 30 Sept

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟡Financial HealthAdequate9.3/20

🟡GrowthModest10/20

🟢ProfitabilityStrong9.8/15

🟢ValuationAttractive10.2/15

🔴RiskHigh4/10

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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 3%5.0%
✗Debt / EBITDA stays below 2x2.9x
✗Free cash flow remains positive-₹16 Cr
✓ROCE stays above 96%99.4%
✓Valuation vs its own median of 10.4x7.4x today