Sastasundar Ventures - Balancing Growth, Efficiency Optimally; Systematix Initiates Coverage With A Buy

Systematix Research Report

We value Sastasundar Ventures Ltd. at 35 times FY26E Ebitda to arrive at a target price of Rs 596. Our Buy on Sastasundar Ventures as a preferred play on the ongoing supply chain consolidation in the pharmaceutical space stems from-

1. large revenue expansion opportunity,

2. scope for significant margin expansion,

3. strong execution track record,

4. expected strong return profile of the business,

5. a strong balance sheet - 25% stake in Flipkart health, and

6. a strong net cash position to support its growth plans.

Sastasundar Ventures is seeking profitable growth, and is therefore cautiously deploying capital. This has not constrained its growth momentum, evident from the 40% compound annual growth rate in its revenue over the last three years.

Risks

• Adverse regulation impacting sales of online pharmacies,

• Execution delays – Slowdown in ramp up of Retailshakti,

• Higher working capital investments than envisaged could dilute its return on capital employed meaningfully.

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