Market Cool On Sastasundar Ventures Limited's (NSE:SASTASUNDR) Revenues Pushing Shares 25% Lower

Unfortunately for some shareholders, the Sastasundar Ventures Limited (NSE:SASTASUNDR) share price has dived 25% in the last thirty days, prolonging recent pain. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 38% in that time.

After such a large drop in price, Sastasundar Ventures' price-to-sales (or "P/S") ratio of 0.6x might make it look like a strong buy right now compared to the wider Healthcare industry in India, where around half of the companies have P/S ratios above 3.5x and even P/S above 6x are quite common. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.

View our latest analysis for Sastasundar Ventures

What Does Sastasundar Ventures' Recent Performance Look Like?

Sastasundar Ventures could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. Perhaps the P/S remains low as investors think the prospects of strong revenue growth aren't on the horizon. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Sastasundar Ventures.

Do Revenue Forecasts Match The Low P/S Ratio?

In order to justify its P/S ratio, Sastasundar Ventures would need to produce anemic growth that's substantially trailing the industry.

In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 17%. Even so, admirably revenue has lifted 92% in aggregate from three years ago, notwithstanding the last 12 months. Accordingly, while they would have preferred to keep the run going, shareholders would definitely welcome the medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 24% during the coming year according to the one analyst following the company. Meanwhile, the rest of the industry is forecast to expand by 26%, which is not materially different.

With this information, we find it odd that Sastasundar Ventures is trading at a P/S lower than the industry. Apparently some shareholders are doubtful of the forecasts and have been accepting lower selling prices.

What Does Sastasundar Ventures' P/S Mean For Investors?

Having almost fallen off a cliff, Sastasundar Ventures' share price has pulled its P/S way down as well. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

Our examination of Sastasundar Ventures' revealed that its P/S remains low despite analyst forecasts of revenue growth matching the wider industry. The low P/S could be an indication that the revenue growth estimates are being questioned by the market. Perhaps investors are concerned that the company could underperform against the forecasts over the near term.

Plus, you should also learn about this 1 warning sign we've spotted with Sastasundar Ventures.

If you're unsure about the strength of Sastasundar Ventures' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.