Sandesh Reports Strong Cash Flow and Profit Amid Declining Sales Trends

Sandesh, a small-cap player in the printing and publishing industry, has recently reported a series of positive financial results, marking four consecutive quarters of growth. The company achieved its highest operating cash flow of Rs 154.49 crore, while its profit after tax for the half-year reached Rs 88.56 crore, reflecting a robust growth rate of 50.38%. Additionally, the return on capital employed (ROCE) stands at an impressive 21.40%.
Despite these positive indicators, Sandesh faces challenges in management efficiency, with a return on equity (ROE) averaging 9.59%, suggesting lower profitability relative to shareholders' funds. Over the past five years, the company has experienced a decline in net sales at an annual rate of 3.71% and a slight decrease in operating profit by 1.05%.

The stock has shown resilience, generating a return of 51.47% over the past year and outperforming the BSE 500 index consistently for three years. However, the company's valuation appears attractive with a price-to-book ratio of 0.9, and it is trading at fair value compared to historical averages. Notably, domestic mutual funds hold no stake in Sandesh, which may indicate caution regarding its market position.