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    Why Investors Shouldn't Be Surprised By Mukta Arts Limited's (NSE:MUKTAARTS) Low P/S

    Simply Wall St·01/07/2026 00:12:19
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    With a price-to-sales (or "P/S") ratio of 0.9x Mukta Arts Limited (NSE:MUKTAARTS) may be sending very bullish signals at the moment, given that almost half of all the Entertainment companies in India have P/S ratios greater than 4.5x and even P/S higher than 31x are not unusual. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.

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    See our latest analysis for Mukta Arts

    ps-multiple-vs-industry
    NSEI:MUKTAARTS Price to Sales Ratio vs Industry January 7th 2026

    How Has Mukta Arts Performed Recently?

    For example, consider that Mukta Arts' financial performance has been poor lately as its revenue has been in decline. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. Those who are bullish on Mukta Arts will be hoping that this isn't the case so that they can pick up the stock at a lower valuation.

    Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Mukta Arts will help you shine a light on its historical performance.

    How Is Mukta Arts' Revenue Growth Trending?

    There's an inherent assumption that a company should far underperform the industry for P/S ratios like Mukta Arts' to be considered reasonable.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 3.0%. The last three years don't look nice either as the company has shrunk revenue by 7.3% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    Comparing that to the industry, which is predicted to deliver 20% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.

    In light of this, it's understandable that Mukta Arts' P/S would sit below the majority of other companies. Nonetheless, there's no guarantee the P/S has reached a floor yet with revenue going in reverse. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.

    The Final Word

    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 Mukta Arts confirms that the company's shrinking revenue over the past medium-term is a key factor in its low price-to-sales ratio, given the industry is projected to grow. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.

    Plus, you should also learn about these 3 warning signs we've spotted with Mukta Arts (including 2 which are concerning).

    It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).