Sarla Performance Fibers Limited (SARLAPOLY) AI Stock Analysis

• Market Cap: ₹7.47B
• Dividend Yield: 3.38%
• Average Volume (3M): 9.84K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 1.28
• Revenue Growth: -3.48%
• EPS Growth: 21.37%
• Country: IN
• Employees: 397
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Apparel - Manufacturers
• EPS (TTM): 2.27
• Shares Outstanding: 83,503,000
• 10 Day Avg. Volume: 8,180
• 30 Day Avg. Volume: 9,835
• PEG Ratio: 0.12
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 1.52
• P/FCF Ratio: 15.54
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: ₹89.00 ▼(-1.46% Downside)

Sarla Performance Fibers Limited has a solid financial foundation with strong revenue growth and efficient cash flow management. However, technical indicators suggest bearish momentum, which could pose short-term challenges. The stock's valuation is attractive with a reasonable P/E ratio and a good dividend yield, providing a balanced investment opportunity.

Positive Factors

Operating Cash Flow Strength

Sustained growth in operating cash flow underpins durable self-funding for capex, working capital and R&D. Strong cash generation reduces reliance on external financing, supports dividends or deleveraging, and provides resilience through cyclical downturns for the core fiber business.

Balance Sheet Equity Strength

A robust equity base and strong equity ratio provide long-term financial stability, enabling investments in capacity or product development. It also improves borrowing terms and cushions demand shocks, preserving strategic flexibility for partnerships and capital allocation decisions.

Improved Margins and EPS Growth

Rising gross margins and recent revenue gains signal durable improvements in cost structure and product mix. Coupled with positive EPS growth, this suggests management is delivering structural profitability gains that can be reinvested into premium product development and long-term competitive positioning.

Negative Factors

Recent Revenue Decline

A negative recent revenue growth metric flags potential demand softness or lost share. If this trend persists it undermines scale economics, pressures fixed-cost absorption, and limits ability to invest in R&D or expand capacity over the medium term.

Moderate Leverage

Elevated leverage increases sensitivity to interest-rate cycles and refinancing risk, constraining strategic options. Over the medium term, higher debt can limit capital spending and M&A flexibility, and magnify earnings volatility if margins face pressure in a cyclical textile industry.

Suboptimal Cash Conversion & Net Margin

Lower conversion of net income into free cash flow and room to improve net margins point to potential earnings-quality issues. Persisting this gap can restrict free cash available for growth or returns, and makes long-term profitability more vulnerable to cost or demand shocks.

Sarla Performance Fibers Limited Business Overview & Revenue Model

Company Description

Sarla Performance Fibers Limited manufactures and sells yarns in India and internationally. The company operates through two segments, Manufacturing of Yarn and Generation of Wind Power. It offers textured polyester, textured nylon stretch, high bulk textured polyester, high tenacity, covered, and dyed yarns, as well as textured sewing and specialty sewing threads. The company also owns wind power capacity of 14.75 MW in Maharashtra, Gujarat, and Madhya Pradesh. It exports its products to approximately 40 countries, including European countries, such as Italy, Spain, Romania, Turkey, the United Kingdom, Portugal, etc.; Central and North America; South America comprising Brazil; and Asian countries comprising China, Vietnam, Thailand, Hong Kong, etc., as well as Jordan and Canada. The company was formerly known as Sarla Polyester Limited and changed its name to Sarla Performance Fibers Limited in 2006. Sarla Performance Fibers Limited was incorporated in 1993 and is headquartered in Mumbai, India.

How the Company Makes Money

Sarla Performance Fibers Limited generates revenue through the production and sale of its specialty synthetic fibers to various industries. The company's primary revenue streams include direct sales of its performance fibers to manufacturers in the textile and automotive sectors, as well as partnerships with distributors and retailers. Additionally, SARLAPOLY may engage in long-term contracts with key clients for bulk supply agreements, which provide a stable income source. The company also invests in research and development to create innovative products that meet evolving market demands, thus enhancing its competitive edge and driving sales growth.

Sarla Performance Fibers Limited Financial Statement Overview

Summary

Sarla Performance Fibers Limited shows solid financial performance with strong revenue growth and efficient cash flow management. The balance sheet is stable with healthy equity, but leverage should be managed carefully. Improving net profit margins and optimizing cash flow conversion are key areas for enhancement.

Income Statement

Sarla Performance Fibers Limited has demonstrated consistent revenue growth with a notable increase in revenue from 2024 to 2025. Gross profit margin improved significantly, reflecting effective cost management. However, the net profit margin, while positive, could be further enhanced to improve overall profitability.

Balance Sheet

The company's balance sheet shows a healthy equity position with a strong equity ratio, indicating financial stability. However, the debt-to-equity ratio suggests a moderate level of leverage that could pose risks if not managed properly. Return on equity is decent but has room for improvement.

Cash Flow

Operating cash flow has significantly increased, indicating strong cash generation capabilities. Free cash flow growth is positive, but the free cash flow to net income ratio suggests that net income conversion could be optimized. The company maintains a good operating cash flow to net income ratio, reflecting efficient cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.19B	4.27B	3.74B	3.83B	4.26B	2.58B
Gross Profit	2.19B	2.36B	1.31B	1.38B	915.78M	1.10B
EBITDA	1.15B	893.35M	787.30M	666.67M	942.82M	735.18M
Net Income	681.20M	623.57M	329.12M	213.39M	462.75M	262.58M
Balance Sheet
Total Assets	0.00	7.53B	6.51B	5.80B	6.27B	5.85B
Cash, Cash Equivalents and Short-Term Investments	518.64M	518.62M	485.05M	406.01M	816.07M	987.52M
Total Debt	0.00	1.81B	1.37B	1.09B	1.35B	1.49B
Total Liabilities	-4.90B	2.63B	2.22B	1.85B	2.39B	2.43B
Stockholders Equity	4.90B	4.90B	4.28B	3.95B	3.88B	3.41B
Cash Flow
Free Cash Flow	0.00	418.51M	215.40M	554.46M	30.50M	164.30M
Operating Cash Flow	0.00	624.02M	310.18M	1.02B	366.31M	295.60M
Investing Cash Flow	0.00	-901.62M	-562.57M	-558.05M	-258.47M	309.50M
Financing Cash Flow	0.00	265.53M	238.44M	-455.05M	-176.23M	-561.90M

Sarla Performance Fibers Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 90.32
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SARLAPOLY, the sentiment is Positive. The current price of 90.32 is above the 20-day moving average (MA) of 85.05, above the 50-day MA of 86.72, and below the 200-day MA of 99.38, indicating a neutral trend. The MACD of -0.86 indicates Negative momentum. The RSI at 59.27 is Neutral, neither overbought nor oversold. The STOCH value of 73.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:SARLAPOLY.

Sarla Performance Fibers Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SARLAPOLY	67 Neutral	₹7.47B	11.02	―	3.38%	-3.48%	21.37%
HARIOMPIPE	66 Neutral	₹12.79B	20.47	―	0.17%	17.98%	-0.62%
NELCAST	64 Neutral	₹7.68B	20.89	―	0.48%	0.43%	-23.95%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
INDORAMA	50 Neutral	₹11.29B	7.95	―	―	30.79%	―
DECCANCE	48 Neutral	₹8.81B	26.56	―	0.08%	-28.32%	93.44%
SUTLEJTEX	46 Neutral	₹4.74B	-5.26	―	―	-1.07%	-5.16%