Tirupati Sarjan Faces Financial Challenges Amidst Modest Growth and Debt Concerns

Tirupati Sarjan, a microcap player in the realty sector, has recently undergone an evaluation adjustment, reflecting a revision in its score. The company has reported flat financial performance for the quarter ending March 2025, with a PBDIT of Rs 2.72 crore and an operating profit to net sales ratio of 3.49%, marking the lowest figures in recent quarters.
Long-term fundamentals indicate challenges, with an average Return on Capital Employed (ROCE) of 7.79%. The company has experienced modest growth, with net sales increasing at an annual rate of 13.16% and operating profit at just 0.85% over the past five years. Additionally, Tirupati Sarjan's ability to service debt appears constrained, as evidenced by a high Debt to EBITDA ratio of 4.42 times.

Despite these challenges, the stock is noted for its attractive valuation, with a ROCE of 8.4 and an enterprise value to capital employed ratio of 0.7. Over the past year, while the stock has generated a return of -7.31%, profits have risen by 31%, and the PEG ratio stands at 0.3, suggesting a unique position within its market segment.

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