Quest Capital (500069)

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Price-to-book of 0.24 offers a deep discount to stated book value of ₹1,632.81 per share
• P/E of 6.52 is low relative to the market cap of ₹392 Cr
• Piotroski F-score of 7/9 indicates reasonably healthy financials versus many distressed balance sheets
• Latest quarter net profit of ₹21 Cr on sales of ₹27 Cr shows strong recent earnings generation
• Huge reported sales and profit growth, while from a low base, points to possible improving momentum

Concerns

• ROE of 2.45% and ROCE of 2.20% show poor returns on the large asset base
• Sales growth of 3,934% and profit growth of 1,000% are volatile and likely not sustainable
• Dividend yield of only 0.96% provides little income while waiting for value to unlock
• Promoter holding is not disclosed, leaving uncertainty about alignment with minority shareholders

AI Analysis

At ₹385.50, with book value of ₹1,632.81, I am buying a rupee of assets for under 24 paise. That is the kind of margin of safety Graham would appreciate. But a bargain is only a bargain if management can eventually earn a decent return on those assets, and here the numbers give me pause. Return on equity is just 2.45%; return on capital employed is 2.20%. This is not a wonderful business. The company earns far too little on its large asset base. The latest quarter shows ₹27 Cr sales and ₹21 Cr net profit—an extraordinary margin, but such figures can be misleading when the base is tiny. Sales growth of 3,934% and profit growth of 1,000% look spectacular, but in capital market services, a single quarter can distort annual comparisons. The market cap is ₹392 Cr while P/E is 6.52, so the price already discounts poor earnings quality. The Piotroski F-score of 7/9 suggests the balance sheet is not deteriorating, and debt/equity is not meaningful in the data given. Still, with a dividend yield of only 0.96%, I am not being paid to wait. This stock is a classic asset play: deep discount to stated book value, but low returns on that book. If Quest Capital can deploy its capital more profitably, the upside is substantial; if not, the discount may stay or widen. Promoter holding is not disclosed in the data I have; that is a red flag for a minority shareholder. I would need to see sustained improvement in ROE and a clear catalyst before acting. As Buffett says, it is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Here, the price is attractive, but the business quality is not.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer