Sanwaria Consumer Multibagger Stock Analysis (Value Investing Way)

Sanwaria Consumer Ltd. was a Darling Stock of Many during the 2016-2018 period. It gave Multibagger Returns & Later cooped to deep crashes! Since our Paid Subscriber (Mr. Srinivasa) is inquiring on this stock we are providing a Quick Analysis on same.

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We are saying ahead that this company is NOT A MULTIBAGGER on Value Investing grounds analysis.

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Warren Buffett, Value & Growth Checklist

Following are the Checklist parameters we applied on Sanwaria Consumers.

Capitalization200 CR – Good for giving multibagger returns.
History of Consistently Increasing Sales, Earnings & Cash FlowNo. Recent Sales are showing Trouble in Growth.
Durable Competitive AdvantageNo. Company is Struggling on Competition
Future Growth Drivers / Sector GrowthFuture Growth after Corona Troubles is anticipated to be 10% based on past years average
Conservative Debt (long term debt < 3 Net Profit)Huge Debts
Debt Equity Ratio, Current RatioHuge Debts
Return on Equity must be Above Average27%
Low CAPEX required to maintain current operationsNo
Inventory Turnover Ratio, Debtor Days, ROCEITR not good, Debtor Days Increasing, ROCE is low.
Management is holding / buying the stockNo. Promoters sold 17% in last 3 years.
Market Price < Intrinsic ValueIntrinsic Value is screwed up due to No EPS Growth. Intrinsic Value Calculator
Stock Price is consolidating (now)Yes.
Stock Price is growing in past years along with EPS growthYes
Consolidated PE, PB Ratio, PEG RatioPE is bad. PB is good. PEG is bad.
Cash Flow Positive, Net Profit % greater than 8%Negative. Net Profit % is < 1%
Paying Dividends, TaxNot clean. Fraud Analysis required.
EPS Growth RateRecent Growth is not there.
Jump in Trailing Result EPSNo
Jump in Quarterly Result EPSNo.
Expected Gain in 5 YearsCan’t Predict as company is in loss of 651 crores currently.
Price Movement Graph, 52 Week High & LowPrice closer to 52 week high
Volume AnalysisHigh Volume (crash high on bear times)
Power of BrandBad.
Corporate Governance, Reputation of LeadersBad
Fraud reportedNeed deeper check.

CONCERN FACTORS

Following are the Concern Factors on Sanwaria Consumer company.

  • Sales are not Increasing for last few years. Due to this the Profitability of the company is affected. Unless you know any Turnaround Story this company is Extremely bad to invest in.
  • Debt is too high. These Corona/Recession situation will cause Trouble on the company to pay back the Loan & Interest. This will gain lead to Pledging of Shares & Causing Chaos!
  • Promoters sold 17% of their holding is the past boom. This denotes that they ditched the Investors & Booked Profits.
  • Overall the Reputation of Leader, Brand Recognition are in trouble.

SUMMARY

From the above it is obvious that the company is in Deep Trouble now. I would say to Stay away from this counter!

If you are already an Investor you can continuously hold as it crashed heavily!

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