Sundrop Brands Limited

Consumer Defensive — Packaged Foods · NSE

₹618.35−₹34.75 (−5.32%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sundrop Brands Limited manufactures, markets, trades in, and sells food products and edible oils in India and internationally.

IndustryPackaged Foods

SectorConsumer Defensive

Employees987

Annual revenue₹1,547 Cr

How does it make money?

Turns over ₹1,547 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 987 employees supports ₹1.57 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.57 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 1.8% 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 is the outlook?

1 analysts covering the stock expect revenue to grow about 12.8% and earnings to grow about 73.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.8%

Est. earnings growth+73.0%

Analysts1

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 +82% while net margin moved -27% 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+82%

Margin effect-27%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 1.4% is weak

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

41/ 100

Expensive

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

83.6x

3Y Median

155.1x

40 monthly readings · mean 158.6x · range 107.4x–218.7x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 46% below its 3y median of 155.1x. 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 62% above the peer median of 51.7x.

vs. its own history

Cheap

155.1x median over 40 months · -46%

vs. sector peers

Expensive

51.7x median of 4 peers · +62%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

37.8x

PEG

8.26

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 78% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 4.6% to 1.8% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 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.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 55% 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 78% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 46% 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.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 62% above the peer median. That premium needs a reason that persists, or it closes.
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 17% a year✓ 22.2% CAGR
Latest reported year was 15.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹12 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 1.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹2,331 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

83.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹7.4

Profitable

Profitable on a per-share basis

ROE

1.4%

Weak

Weak capital efficiency

ROCE

1.8%

Weak

Low return on total capital employed

Debt/Equity

0.91x

Moderate

Moderate leverage

Revenue Growth (YoY)

15.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

125.2%

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

₹12 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

29.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

3.9%

Weak

Thin margins leave little room for error

Net Margin

1.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.45

Defensive

Steadier than the market

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

713.8 / 680.9

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

13.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹848 Cr	₹758 Cr	₹897 Cr	₹1,547 Cr	+22.2%
EBITDA	₹46 Cr	₹35 Cr	₹32 Cr	₹61 Cr	+10.0%
EBITDA Margin	5.4%	4.7%	3.5%	4.0%	—
PAT (Net Profit)	₹15 Cr	₹10 Cr	-₹110 Cr	₹20 Cr	+10.1%
EPS	₹6.28	₹4.29	₹-41.72	₹5.34	-5.3%
ROE	3.1%	2.1%	-7.6%	1.4%	—
ROCE	4.6%	3.3%	-9.3%	1.8%	—
Total Debt	₹62 Cr	₹42 Cr	₹14 Cr	₹13 Cr	-39.9%
Free Cash Flow	-₹19 Cr	₹26 Cr	₹63 Cr	₹12 Cr	—

🟢 Revenue has grown at 22.2% a year over 3 years.

🟢 EBITDA has grown at 10.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 5.4% to 4.0% over 3 years (-1.5 pts).

🟢 PAT (Net Profit) has grown at 10.1% a year over 3 years.

🔴 EPS has shrunk at 5.3% a year over 3 years.

🔴 ROE has fallen from 3.1% to 1.4% over 3 years (-1.7 pts).

🔴 ROCE has fallen from 4.6% to 1.8% over 3 years (-2.8 pts).

🟢 Total Debt has shrunk at 39.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹19 Cr to ₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,831 Cr

Total Liabilities

₹353 Cr

Cash & Equivalents

₹31 Cr

Operating Cash Flow

₹31 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

5.2%

Insider Holding

77.0%

Corporate Actions

Ex-Dividend Date

20 Sept 2024

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹950

+53.6% vs CMP

Target Range

₹950 – ₹950

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

2 mixed4 general

Compare Agro Tech Foods with VIJAY SOLVEX

Equitymaster, 16 Oct

Sundrop Brands Limited (SUNDROP) Share Price NSE

TechGraph, 07 Oct

Sundrop Brands Ltd is Rated Sell

MarketsMojo, 15 Oct

SUNDROP Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Sundrop Brands Share: Bull Case vs Bear Case for 2026

Univest, 25 Sept

Sundrop Brands Reports ₹20.88 Cr Standalone Profit in FY26, Q4 EBITDA Turns Positive

scanx.trade, 07 MayResults

🟡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

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingGrowth · Valuation

WeakBusiness Quality · Profitability · 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.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑