The stock, currently trading at ₹300.00, has remained relatively flat with a marginal 0.02% decline on February 06, 2026. Over the past year, Sastasundar Ventures has delivered a modest 7.32% return, slightly outpacing the Sensex's 7.07% gain but significantly underperforming the healthcare services sector, which rallied 19.84% during the same period.
The company's financial performance in Q2 FY26 reveals a troubling pattern of operational inefficiency despite modest revenue growth. Net sales increased 10.16% year-on-year to ₹301.32 crores, demonstrating resilience in top-line growth. However, this revenue expansion failed to translate into profitability, with operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) plunging to a loss of ₹22.61 crores from a profit of ₹6.07 crores in the previous quarter.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Cons. Net Profit (₹ Cr) | QoQ Growth | PAT Margin |
|---|---|---|---|---|---|---|
| Sep'25 | 301.32 | +0.97% | +10.16% | -12.69 | -153.07% | -5.12% |
| Jun'25 | 298.43 | +4.40% | +10.41% | 23.91 | +74.91% | 8.91% |
| Mar'25 | 285.84 | +1.62% | -6.79% | 13.67 | -150.74% | 6.15% |
| Dec'24 | 281.29 | +2.84% | — | -26.94 | -75.38% | -14.23% |
| Sep'24 | 273.53 | +1.20% | — | -109.41 | -451.24% | -55.11% |
| Jun'24 | 270.29 | -11.86% | — | 31.15 | +89.48% | 18.49% |
| Mar'24 | 306.67 | — | — | 16.44 | — | 11.16% |
Financial Performance: Revenue Growth Masks Deteriorating Profitability
Sastasundar Ventures' Q2 FY26 results paint a concerning picture of a company struggling to convert sales into sustainable profits. Net sales of ₹301.32 crores represented a marginal 0.97% sequential increase from Q1 FY26's ₹298.43 crores, whilst year-on-year growth stood at a healthier 10.16% compared to ₹273.53 crores in Q2 FY25. However, this top-line expansion belies significant operational weaknesses.
The company's operating profit excluding other income collapsed to a loss of ₹22.61 crores in Q2 FY26 from a profit of ₹6.07 crores in the previous quarter, resulting in a deeply negative operating margin of -7.50%. This represents a dramatic deterioration from the already modest 2.03% margin achieved in Q1 FY26. The year-on-year comparison is equally troubling, with the operating margin declining from -1.73% in Q2 FY25.
Net Sales (Q2 FY26)
Consolidated Net Profit
Operating Margin (Excl OI)
PAT Margin
Employee costs rose 14.59% quarter-on-quarter to ₹19.87 crores from ₹17.34 crores, whilst increasing 70.85% year-on-year from ₹11.63 crores. This substantial escalation in personnel expenses without commensurate revenue growth has severely pressured margins. The PAT margin contracted sharply to -5.12% in Q2 FY26 from 8.91% in the previous quarter, highlighting the company's inability to manage costs effectively.
Other income provided some cushion, contributing ₹5.51 crores in Q2 FY26, though this marked a significant decline from ₹25.38 crores in Q1 FY26. The volatility in other income streams—which ranged from a loss of ₹11.83 crores in Q4 FY25 to gains exceeding ₹25 crores in some quarters—raises questions about earnings quality and sustainability.
Operational Challenges: Persistent Losses and Weak Capital Efficiency
The company's operational struggles extend beyond quarterly fluctuations, reflecting deeper structural issues. Sastasundar Ventures has reported an average return on equity (ROE) of just 3.66% over recent periods, significantly below industry standards and indicative of poor capital efficiency. The latest ROE stands at a mere 0.01%, demonstrating the company's inability to generate meaningful returns for shareholders.
The return on capital employed (ROCE) paints an even grimmer picture at -10.67%, indicating that the company is destroying value rather than creating it. This negative ROCE reflects operating losses that have persisted across multiple quarters, with the company posting negative operating profits in five of the last seven quarters presented in the data.
Critical Operational Weakness
Operating Losses Persist: The company has recorded negative operating profit (excluding other income) in five of the last seven quarters, with Q2 FY26's loss of ₹22.61 crores representing one of the worst performances. The operating margin of -7.50% signals fundamental business model challenges that require urgent attention.
Heavy Reliance on Other Income: The company's dependence on volatile other income streams to offset operating losses raises serious concerns about the sustainability of any reported profits. In Q2 FY26, other income of ₹5.51 crores was insufficient to prevent substantial losses.
On the balance sheet front, Sastasundar Ventures maintains a relatively healthy financial position with zero long-term debt as of March 2025. Shareholder funds stood at ₹669.87 crores, supported by reserves of ₹638.06 crores. However, these reserves have declined from ₹725.56 crores in the previous year, reflecting the accumulated losses. Current assets of ₹687.75 crores comfortably exceeded current liabilities of ₹326.40 crores, providing adequate liquidity.
The company's investments stood at ₹577.75 crores as of March 2025, down from ₹678.51 crores in March 2024, suggesting some liquidation of investment holdings. Fixed assets remained modest at ₹99.59 crores, declining from ₹107.80 crores, indicating limited capital expenditure and potential asset rationalisation.
Annual Performance: Prolonged Period of Underperformance
The annual financial statements reveal a company in prolonged distress. For FY25 (year ending March 2025), Sastasundar Ventures reported net sales of ₹1,110.00 crores, representing a 19.30% decline from ₹1,375.00 crores in FY24. This revenue contraction was accompanied by operating losses of ₹55.00 crores (excluding other income), resulting in an operating margin of -5.0%.
The company posted a net loss of ₹122.00 crores in FY25, a dramatic reversal from the ₹92.00 crores profit in FY24. The tax credit of ₹70.00 crores in FY25 (at an effective rate of 34.5%) partially offset the pre-tax loss of ₹203.00 crores, but could not prevent the substantial full-year loss. The PAT margin deteriorated to -11.0% from 6.7% in the previous year.
| Year | Net Sales (₹ Cr) | YoY Growth | Operating Profit Excl OI (₹ Cr) | Operating Margin | Net Profit (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|---|
| Mar'25 | 1,110.00 | -19.30% | -55.00 | -5.0% | -122.00 | -11.0% |
| Mar'24 | 1,375.00 | +32.30% | 5.00 | 0.4% | 92.00 | 6.7% |
| Mar'23 | 1,039.00 | +64.70% | -42.00 | -4.0% | -14.00 | -1.3% |
| Mar'22 | 631.00 | +15.10% | -47.00 | -7.4% | 870.00 | 137.9% |
| Mar'21 | 548.00 | +42.30% | -12.00 | -2.2% | -17.00 | -3.1% |
The five-year trend shows sales growth of 18.60% compounded annually, demonstrating the company's ability to expand its revenue base. However, EBIT growth has been anaemic at just 1.28% over the same period, reflecting persistent margin pressures and operational inefficiencies. The extraordinary profit of ₹870.00 crores in FY22 (with a 137.9% PAT margin) appears to be an anomaly, likely driven by exceptional items rather than core operations.
Cash Flow Concerns Emerge
The company's cash flow statement for FY24 reveals troubling trends. Cash flow from operations stood at ₹38.00 crores, a positive turnaround from the ₹111.00 crores outflow in FY23. However, this improvement was primarily driven by working capital adjustments of ₹49.00 crores rather than strong operational performance. Cash flow from investing activities consumed ₹33.00 crores, whilst financing activities resulted in a ₹2.00 crores outflow. The net cash inflow of just ₹1.00 crore for the full year highlights the company's limited cash generation capacity.
Peer Comparison: Underperforming on Key Metrics
When benchmarked against peers in the healthcare services sector, Sastasundar Ventures' operational weaknesses become starkly apparent. The company's ROE of 3.66% lags significantly behind competitors such as One Global Service (36.64%), Laxmi Dental (37.57%), and 3B Blackbio (18.06%). Even Suraksha Diagnostics, with a more modest 13.86% ROE, substantially outperforms Sastasundar Ventures.
| Company | Market Cap (₹ Cr) | P/E (TTM) | P/BV | ROE (%) | Div Yield |
|---|---|---|---|---|---|
| Sastasundar Ven. | 950.00 | NA (Loss Making) | 1.40x | 3.66% | — |
| Suraksha Diagno. | — | 45.20x | 6.53x | 13.86% | — |
| 3B Blackbio | — | 28.45x | 4.68x | 18.06% | 0.25% |
| One Global Serv | — | 29.59x | 12.81x | 36.64% | — |
| Laxmi Dental | — | 41.32x | 4.82x | 37.57% | — |
| Tarsons Products | — | 53.09x | 1.80x | 9.82% | — |
The price-to-book value (P/BV) ratio of 1.40x for Sastasundar Ventures appears relatively attractive compared to peers trading at multiples ranging from 4.68x to 12.81x. However, this discount is justified given the company's inferior profitability metrics and persistent losses. The P/E ratio cannot be meaningfully calculated due to the company's loss-making status, further highlighting its operational challenges.
The peer comparison underscores that Sastasundar Ventures faces significant competitive disadvantages in capital efficiency and profitability. Whilst the company has demonstrated an ability to grow revenues, its inability to translate this growth into sustainable profits places it at a substantial disadvantage relative to sector peers.
Valuation Analysis: Discount Reflects Fundamental Concerns
Sastasundar Ventures' current valuation metrics present a mixed picture. The price-to-book value of 1.40x suggests the stock trades at a moderate premium to book value, considerably lower than most healthcare services peers. However, traditional earnings-based valuation metrics remain inapplicable due to the company's loss-making status, with the P/E ratio effectively meaningless.
The enterprise value to EBITDA multiple of -14.30x and EV to EBIT of -13.23x reflect the company's negative operating profits, rendering these conventional valuation tools unhelpful. The EV to sales ratio of 0.80x indicates the market values the company at approximately 80% of its annual revenue, a relatively modest multiple that reflects investor scepticism about profitability prospects.
P/E Ratio (TTM)
Price to Book Value
EV/Sales
Mojo Score
The company's valuation grade has fluctuated significantly over the past year, moving from "Very Expensive" in June 2024 to "Very Attractive" in November 2024, before reverting to "Risky" in June 2025 and then back to "Very Attractive" in August 2025. This volatility reflects the market's uncertainty about the company's turnaround prospects and sustainable earnings power.
At the current price of ₹300.00, the stock trades approximately 20.00% below its 52-week high of ₹375.00 and 46.56% above its 52-week low of ₹204.70. This positioning suggests the market has partially priced in operational concerns whilst maintaining some optimism about potential recovery. However, the lack of consistent profitability makes fair value estimation highly speculative.
Shareholding Pattern: Promoter Confidence Incrementally Rising
The shareholding pattern reveals gradually increasing promoter commitment, with promoter holdings rising from 73.94% in December 2024 to 74.69% in December 2025. This sequential increase of 0.45 percentage points in the most recent quarter, following smaller increments in previous quarters, suggests promoters retain confidence in the company's long-term prospects despite near-term operational challenges.
| Quarter | Promoter | Change | FII | Change | DII | Change | Non-Inst |
|---|---|---|---|---|---|---|---|
| Dec'25 | 74.69% | +0.45% | 2.25% | +0.21% | 2.07% | 0.00% | 20.99% |
| Sep'25 | 74.24% | 0.00% | 2.04% | +0.16% | 2.07% | -0.02% | 21.65% |
| Jun'25 | 74.24% | +0.13% | 1.88% | +0.28% | 2.09% | +0.03% | 21.79% |
| Mar'25 | 74.11% | +0.17% | 1.60% | -0.11% | 2.06% | +0.21% | 22.22% |
| Dec'24 | 73.94% | — | 1.71% | — | 1.85% | — | 22.50% |
Foreign institutional investor (FII) holdings have also increased gradually, rising from 1.71% in December 2024 to 2.25% in December 2025. The sequential increase of 0.21 percentage points in the latest quarter represents the largest single-quarter gain during this period, indicating growing international interest despite operational headwinds.
Notably absent from the shareholder base are mutual funds and insurance companies, both showing zero holdings throughout the tracked period. This lack of institutional participation from domestic mutual funds is particularly concerning, as it suggests professional fund managers remain unconvinced about the company's investment merits. Total institutional holdings stand at just 4.32%, significantly below typical levels for listed companies of comparable size.
The absence of promoter pledging is a positive indicator, demonstrating that promoters have not leveraged their holdings for financing. The promoter group is led by Banwari Lal Mittal (33.76%), Topview Enclaves LLP (24.76%), and Luv Kush Projects Limited (11.96%), collectively maintaining a controlling stake.
Stock Performance: Underperforming Sector and Market
Sastasundar Ventures' stock price performance over various timeframes reveals a pattern of underperformance relative to both the broader market and its sector. Over the past year, the stock delivered a 7.32% return, marginally outpacing the Sensex's 7.07% gain but significantly lagging the healthcare services sector's 19.84% advance. This 12.52 percentage point underperformance versus the sector underscores investor concerns about the company's operational trajectory.
| Period | Stock Return | Sensex Return | Alpha | Assessment |
|---|---|---|---|---|
| 1 Week | +0.70% | +1.59% | -0.89% | Underperformed |
| 1 Month | -5.12% | -1.74% | -3.38% | Underperformed |
| 3 Months | +3.81% | +0.32% | +3.49% | Outperformed |
| 6 Months | +11.46% | +3.77% | +7.69% | Outperformed |
| YTD | +1.47% | -1.92% | +3.39% | Outperformed |
| 1 Year | +7.32% | +7.07% | +0.25% | Marginally outperformed |
| 2 Years | -31.16% | +15.78% | -46.94% | Severely underperformed |
| 3 Years | +19.76% | +38.13% | -18.37% | Underperformed |
| 5 Years | +145.70% | +64.75% | +80.95% | Strongly outperformed |
The medium-term performance picture is particularly concerning. Over the past two years, the stock has declined 31.16% whilst the Sensex gained 15.78%, resulting in a negative alpha of 46.94 percentage points. This substantial underperformance coincides with the company's deteriorating operational metrics and persistent losses during FY25.
Short-term momentum has been mixed, with the stock delivering positive returns over three-month (+3.81%) and six-month (+11.46%) periods, outperforming the Sensex during these timeframes. However, the one-month performance shows a decline of 5.12%, worse than the Sensex's 1.74% fall, suggesting recent operational disappointments have weighed on sentiment.
From a technical perspective, the stock currently exhibits a "Mildly Bullish" trend as of January 20, 2026, having changed from "Bullish" status. The stock trades below all major moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), indicating weak technical momentum. The beta of 1.50 classifies Sastasundar Ventures as a high-beta stock, meaning it experiences greater volatility than the broader market—a characteristic that amplifies both gains and losses.
The risk-adjusted return of 0.18 over the past year, compared to the Sensex's 0.61, reflects the stock's high volatility (40.46%) relative to returns delivered. This elevated volatility, combined with modest absolute returns, places the stock in the "HIGH RISK MEDIUM RETURN" category, making it unsuitable for risk-averse investors.
Investment Thesis: Multiple Red Flags Overshadow Growth Potential
The investment case for Sastasundar Ventures rests primarily on its demonstrated ability to grow revenues, with a five-year sales CAGR of 18.60%. The company operates in the attractive healthcare services sector, which has shown strong sectoral performance with 19.84% returns over the past year. The debt-free balance sheet and adequate liquidity provide financial flexibility to navigate operational challenges.
Valuation Grade
Quality Grade
Financial Trend
Technical Trend
However, these positives are substantially outweighed by fundamental weaknesses. The company's below-average quality grade reflects its weak long-term financial performance, with an average ROE of just 3.66% and a negative ROCE of -10.67%. The persistent operating losses—recorded in five of the last seven quarters—indicate fundamental business model challenges rather than temporary headwinds.
The flat financial trend in recent quarters, combined with deteriorating profitability metrics, raises serious questions about management's ability to execute a turnaround. The heavy reliance on volatile other income to offset operating losses further compromises earnings quality and sustainability. The absence of mutual fund and insurance company participation, with institutional holdings at just 4.32%, suggests professional investors remain unconvinced about the investment merits.
KEY STRENGTHS
- Strong revenue growth trajectory with 18.60% five-year CAGR
- Debt-free balance sheet with zero long-term borrowings
- Adequate liquidity with current assets exceeding liabilities
- Promoter holdings increasing, demonstrating insider confidence
- Exposure to attractive healthcare services sector
- Modest valuation with P/BV of 1.40x below peer average
- No promoter pledging of shares
KEY CONCERNS
- Persistent operating losses in five of last seven quarters
- Extremely weak ROE of 3.66% and negative ROCE of -10.67%
- Deteriorating margins with operating margin at -7.50% in Q2 FY26
- Heavy reliance on volatile other income streams
- Substantial FY25 net loss of ₹122.00 crores
- Minimal institutional participation at 4.32% holdings
- High volatility (40.46%) with modest returns
Outlook: Monitoring Points for Potential Reversal
For Sastasundar Ventures to justify a more constructive investment stance, several key developments would need to materialise. Investors should monitor quarterly results for evidence of sustained operating profitability, with particular focus on achieving positive operating margins excluding other income. Stabilisation and improvement in employee cost ratios would signal better operational control.
POSITIVE CATALYSTS
- Achievement of consistent operating profitability
- Margin expansion above industry average levels
- Reduced dependence on other income for profits
- Institutional investor participation increases
- ROE improvement towards peer levels (15%+)
RED FLAGS TO WATCH
- Further deterioration in operating margins
- Continued quarterly losses beyond Q3 FY26
- Declining revenue growth momentum
- Promoter stake reduction or pledging
- Erosion of cash reserves or increased debt
The company's ability to demonstrate earnings quality by reducing reliance on other income would be crucial. Additionally, any meaningful increase in institutional participation, particularly from domestic mutual funds, would signal improving confidence in the turnaround story. Conversely, further margin deterioration, continued quarterly losses, or any decline in promoter holdings would reinforce the negative investment thesis.
Given the current operational trajectory, the company faces an uphill battle to restore investor confidence. The healthcare services sector's strong performance highlights that industry tailwinds exist, but Sastasundar Ventures has been unable to capitalise on these favourable conditions. Without visible signs of operational improvement and sustained profitability, the stock remains a high-risk proposition unsuitable for most investors.
Investment Verdict
Score: 47/100
For Fresh Investors: Avoid initiating positions. The company's persistent operating losses, weak return ratios (3.66% ROE, -10.67% ROCE), and deteriorating profitability trends present significant risks. Whilst revenue growth remains intact, the inability to convert sales into sustainable profits indicates fundamental business model challenges. The absence of institutional participation and below-average quality grade further reinforce the cautious stance.
For Existing Holders: Consider exiting positions on any price strength. The Q2 FY26 results, showing a consolidated loss of ₹12.69 crores and negative operating margins of -7.50%, continue the pattern of operational underperformance. With five quarters of operating losses in the last seven quarters and no clear turnaround catalyst visible, holding this investment exposes shareholders to continued value erosion. Use any rallies towards the ₹320-₹330 range as exit opportunities.
Fair Value Estimate: Given the loss-making status and negative operating metrics, traditional valuation methods are not applicable. The current price of ₹300.00 appears fairly valued relative to the company's operational challenges, with limited upside potential until sustained profitability is demonstrated. Risk of further downside exists if losses persist beyond Q3 FY26.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions.
