At a Glance
Sah Polymers just dropped its Q1 FY26 results, and let’s just say the market’s reaction is… skeptical. Net profit crawled in at ₹0.81 crore (from a loss last quarter), revenue slid to ₹29.7 crore, and margins are gasping at 2.4%. Yet the stock trades at a P/E of 423 – yes, you read that right, 423x! This is like buying a packet of chips with 99% air. ROE is a laughable 0.24%, ROCE a depressing 3.4%, and debt is hanging around like an uninvited guest. The only thing going up? The eyebrow of every value investor.
Introduction
Sah Polymers makes FIBCs (Flexible Intermediate Bulk Containers) – essentially giant bags that carry cement, chemicals, grains, and now investor hopes. Once a star export house with fancy government recognition, it’s now a case study in how valuations can defy gravity while fundamentals dig holes. The share price is still up 41% YoY, but underneath lies a company with wafer-thin margins, inconsistent profits, and a working capital cycle longer than a Monday morning meeting.
Think of it like this: while EPL, AGI, and TCPL are delivering profits with P/Es in the teens, Sah is walking around with a P/E 20 times higher – like a scooter priced as a Ferrari.
Business Model (WTF Do They Even Do?)
Sah Polymers manufactures and markets FIBC bags, woven polypropylene bags, BOPP laminated bags, and other flexible packaging products. They cater to industrials, agriculture, and chemicals, with export markets being a big chunk of sales. They’re even recognized as a Star Export House – impressive, until you see the P&L.
Their business is low margin, volume dependent, and heavily tied to raw material prices (polypropylene). They face competition from cheaper Asian manufacturers and margin pressure from customers who treat packaging as a cost, not a value add. It’s like selling salt: important but no one pays a premium.
Financials Overview
Q1 FY26 numbers scream “survival mode”:
- Revenue: ₹29.7 crore (down 12% QoQ)
- EBITDA: ₹0.7 crore (OPM 2.4%)
- Net Profit: ₹0.81 crore (up YoY but from a tiny base)
- EPS: ₹0.31
For FY25: Revenue ₹129 crore, PAT ₹0.8 crore, EPS ₹0.08. Yes, annual EPS is in paise.
Commentary: Profits improved from last quarter’s loss, but margins remain fragile. Interest cost eats away profits, and other income is the only thing keeping the P&L alive.
Valuation – Fair or Fantasy?
Current Price: ₹118
TTM EPS: ₹0.27
P/E: 423 (sky-high for a company that barely makes money)
Fair Value Range:
- P/E Method: Even at a generous 30x EPS of ₹1 (optimistic), FV = ₹30.
- EV/EBITDA: FY25 EBITDA ₹3 crore, EV/EBITDA 10x → FV ≈ ₹30–₹35.
- DCF: With near-zero cash flow, DCF laughs and walks away.
🎯 Fair Value Range: ₹25–₹40. Current price is like paying ₹500 for a paper bag.
What’s Cooking – News, Triggers, Drama
- Turnaround hopes: Slight profit this quarter, but sustainability doubtful.
- Promoter holding stable at 60.4%.
- FII interest dropped to 3.6% – they’re fleeing.
- Debt manageable, but interest coverage low.
- Exports could help if global demand rebounds.
Balance Sheet (Auditor’s Stand-Up)
| (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 126 | 132 | 128 |
| Liabilities | 41 | 48 | 43 |
| Net Worth | 59 | 58 | 58 |
| Borrowings | 25 | 31 | 28 |
Audit Punchline: Net worth stagnant, borrowings hovering. Balance sheet is okay, but growth capital isn’t coming anytime soon.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | -17 | 0 | 8 |
| Investing | -20 | -5 | -6 |
| Financing | 46 | -5 | -5 |
Stand-Up Audit: FY23 had negative OCF, FY24 zero, FY25 some recovery. Not exactly a cash machine.
Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 2.0 | 1.0 | 0.2 |
| ROCE % | 9 | 4 | 3.4 |
| P/E | 200 | 350 | 423 |
| PAT Margin % | 4 | 1 | 0.6 |
| D/E | 0.4 | 0.5 | 0.48 |
Commentary: ROE and ROCE are in the basement, P/E is on the moon – a mismatch that even NASA can’t explain.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 95 | 109 | 129 |
| EBITDA | 7 | 5 | 4 |
| PAT | 4 | 1 | 0.8 |
Remark: Revenue grows, profits vanish. This is what margin erosion looks like.
Peer Comparison
| Company | Revenue (₹Cr) | PAT (₹Cr) | P/E |
|---|---|---|---|
| EPL Ltd | 4,213 | 362 | 20.0 |
| AGI Greenpac | 2,650 | 348 | 17.6 |
| Mold-Tek Pack. | 825 | 66 | 41.0 |
| Sah Polymers | 130 | 1 | 423.0 |
Commentary: Peers are profitable with rational valuations. Sah is priced like a unicorn with the body of a donkey.
Miscellaneous – Shareholding, Promoters
- Promoters: 60.4% (stable)
- FIIs: 3.6% (falling)
- DIIs: negligible
- Public: 35.5%
Promoters holding steady is good, but lack of institutional love is telling.
EduInvesting Verdict™ (500 Words)
Sah Polymers is the poster child of valuation disconnect. On paper, it’s an exporter with a growing top line. In reality, it’s struggling to make margins above 3%, has negligible profits, and offers no dividend. Investors buying at ₹118 are essentially paying for hope, not numbers.
Strengths:
- Star Export House with government recognition.
- Decent export client base.
- Low-to-moderate debt (manageable).
Weaknesses:
- PAT margin under 1%.
- ROE/ROCE negligible.
- Profitability inconsistent.
Opportunities:
- Global packaging demand could boost sales.
- Operational improvements may restore margins.
- Any strategic investor entry could rerate stock.
Threats:
- Rising polypropylene costs.
- Price competition from Asian rivals.
- Valuation bubble bursting.
Conclusion:
Sah Polymers is like buying a luxury perfume bottle that’s half empty. Unless management pulls off a margin turnaround, this stock’s P/E will eventually face gravity. At current prices, it’s speculative at best. For long-term investors, wait for a price correction to ₹30–₹40 before even considering a position.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Sah Polymers, Q1 FY26 results, flexible packaging industry, FIBC bags, valuation analysis
