Price Movement and Market Context
The stock’s latest low of Rs.79.85 represents a notable drop over the past year, with the share price trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day marks. Despite this, Saraswati Saree Depot outperformed its sector by 1.21% on the day the low was recorded, indicating some relative resilience within its segment.
In contrast, the broader market, represented by the Sensex, opened higher at 85,745.05 points, gaining 135.54 points or 0.16%, and was trading near its 52-week high of 85,801.70. The Sensex has been on a three-week consecutive rise, accumulating a gain of 2.95%, supported by strong performances from mega-cap stocks. This divergence highlights the underperformance of Saraswati Saree Depot relative to the overall market trend.
Financial Performance Overview
Over the last year, Saraswati Saree Depot’s stock has generated a return of -36.44%, contrasting with the Sensex’s positive 6.78% return over the same period. The company’s 52-week high price was Rs.152.80, underscoring the extent of the decline to the current low.
Despite the share price movement, the company’s financial results show some positive aspects. The latest quarterly figures reveal net sales at Rs.208.39 crores, the highest recorded for the company, alongside a PBDIT of Rs.14.06 crores and a PBT less other income of Rs.12.36 crores. These figures indicate that Saraswati Saree Depot has maintained a level of profitability amid the price pressures.
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Valuation and Dividend Yield
Saraswati Saree Depot currently trades at a price-to-book value of approximately 1.7, which is considered attractive within its sector. The company also offers a dividend yield of 4.62% at the current price level, providing a relatively high income return compared to many peers in the Garments & Apparels industry.
Return on equity (ROE) stands at 16.84%, reflecting efficient management of shareholder funds. Additionally, the company maintains a low debt-to-equity ratio, averaging zero, which suggests a conservative capital structure with limited reliance on external borrowings.
Long-Term Growth and Sector Comparison
Over the past five years, Saraswati Saree Depot’s net sales have grown at an annual rate of 1.00%, while operating profit has expanded at 6.45% annually. These growth rates indicate modest expansion relative to broader industry trends. The stock’s performance has also lagged behind the BSE500 index over the last three years, one year, and three months, signalling challenges in maintaining competitive momentum.
The company’s majority shareholding remains with promoters, which often provides stability in governance but also concentrates control.
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Sector and Market Dynamics
The Garments & Apparels sector, in which Saraswati Saree Depot operates, has faced a mixed environment. While the broader market indices such as the Sensex have shown strength, the company’s stock has not mirrored this trend. The Sensex’s position above its 50-day and 200-day moving averages and its proximity to a 52-week high contrasts with the subdued performance of Saraswati Saree Depot.
This divergence may reflect sector-specific pressures or company-level factors influencing investor sentiment and price action. The stock’s trading below all major moving averages suggests a period of consolidation or correction following previous highs.
Summary of Key Metrics
To summarise, Saraswati Saree Depot’s stock price at Rs.79.85 marks a 52-week low, down from Rs.152.80 a year ago. The company’s financials show highest quarterly net sales of Rs.208.39 crores and a PBDIT of Rs.14.06 crores, alongside a PBT less other income of Rs.12.36 crores. The ROE of 16.84% and a dividend yield of 4.62% highlight some strengths in profitability and shareholder returns. However, the stock’s underperformance relative to the Sensex and BSE500 indices, combined with modest long-term sales growth, illustrate the challenges faced in recent periods.
Conclusion
Saraswati Saree Depot’s fall to a 52-week low reflects a complex interplay of market conditions and company-specific factors. While the stock price has declined significantly, the company’s financial results and valuation metrics provide a nuanced picture of its current standing within the Garments & Apparels sector.
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