Sarveshwar Foods Q1 FY27 Results (NSE: SARVESHWAR)
Signal: Growth reaccelerated
The read
Q1FY27 consolidated PAT grew 17% YoY but margins continue to compress (4th straight quarter); operating pressure persists while group profit sits largely in subsidiaries (UAE/JV units). EPS flat YoY due to equity dilution — structural concern. Valuations attractive (P/E 13x vs industry 19x, P/B 0.87x), but margin trajectory needs reversal for thesis to hold.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3.58 Cr | 18.8% | -73.4% |
| EBIT | ₹0.17 Cr | 0.4% | |
| Net profit | ₹0.08 Cr | 17.0% | |
| EPS | ₹0.07 | 0.0% | |
| EBIT margin | 4.8% |
P&L walk
Revenue grew 18.8% YoY (-73.4% QoQ due to base effect), but EBITDA margin compressed 83bps YoY to 4.8% as cost of materials consumed rose faster than revenue — input cost headwind. PAT increased 17% YoY, slightly trailing revenue growth, driven by lower finance costs (not disclosed).
Segments
Single operating segment (rice processing & trading); no segment table — no disaggregation.
Key positives
- Consolidated revenue +18.8% YoY to ₹358.03 Cr — growth despite seasonally weaker quarter.
- PAT +17% YoY to ₹8.21 Cr — bottom line growing, though slower than revenue.
- Valuation discount: P/E 13.08x vs industry 19.2x, P/B 0.87x — potential value trap if margin doesn't inflect.
Key concerns
- OPM compressed 83bps YoY to 4.8% — 4th successive quarter of margin contraction; cost pass-through absent.
- EPS flat YoY at ₹0.07 despite PAT growth — equity dilution from capital raise (share capital +25% YoY).
- Standalone revenue only +4.2% YoY — group growth reliant on overseas subsidiaries (UAE/Singapore), adding FX/geopolitical risk.
Research and educational content only. Not investment advice.