Sarla Performance Fibers Ltd Q3 FY26 – ₹89 Cr Revenue, PAT Down 63% QoQ, EPS Annualised at ₹9.68, Yet P/E Still at 11.5×. Bargain or Trap?

1. At a Glance

₹678 crore market cap. Stock down 23% in six months, dividend yield flashing 3.7%, and promoters calmly sitting on 57% holding like nothing happened. Meanwhile, Q3 FY26 PAT collapsed 63% QoQ to ₹5.03 crore, revenue slipped to ₹89.2 crore, and margins fell off a cliff.

This is Sarla Performance Fibers Ltd — a company that makes high-end polyester & nylon yarns used in Nike shoes, airbags, lingerie, and seatbelts, but whose stock price currently behaves like it manufactures cotton wicks.

At P/E ~11.5, P/B ~1.3, and ROCE ~15%, this looks cheap. But then you zoom into quarterly numbers and suddenly the vibe changes from “steady exporter” to “what just happened in December?”.

So the big question:
👉 Is this a temporary fibre knot… or has Sarla tangled itself permanently?

Let’s unravel.

2. Introduction

Sarla Performance Fibers is one of those companies that never screams for attention. No flashy CAPEX announcements every quarter, no influencer CEOs, no “AI textile blockchain metaverse yarn”. Just plain old manufacturing — value-added yarns and threads — exported to 60+ countries.

For years, it quietly compounded profits, paid dividends, and kept debt reasonable. Then FY25 looked great. EPS jumped to ₹7.47, ROCE hit 15%, margins expanded. Investors relaxed.

And then… Q3 FY26 happened.

Revenue fell 12.6% QoQ, PAT crashed 62.8% QoQ, operating margin fell from 21.5% to 2.9%, and suddenly everyone noticed Sarla again — but for the wrong reasons.

Was it demand slowdown? Raw material volatility? One-off issues? Or management missteps?

Before panicking or celebrating cheap valuations, we need to understand what Sarla actually does, how