Goodricke Group (500166)

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

Key Financials

Strengths

• Piotroski F-Score of 7/9 suggests recent fundamental improvement across margins, leverage, or efficiency.
• Sales growth of 7.79% and profit growth of 149.85% show an improving operating trajectory.
• Book value of ₹149.81 against price of ₹186.80 means a P/B of 1.25, offering some asset backing.
• Latest quarter sales of ₹306 Cr with a positive net profit of ₹8 Cr shows the business is operational and not in a loss-making phase.

Concerns

• P/E of 114.53 is extremely high, and the net margin of roughly 2.6% on latest quarter sales makes earnings fragile.
• ROE of 5.80% and ROCE of 3.22% are weak, indicating poor returns on the capital employed and a lack of pricing power.
• Dividend yield is 0.00%, so there is no income support while waiting for capital appreciation.
• PEG of 1.45 and absence of debt/equity and promoter holding data limit the margin of safety and leave balance-sheet questions unanswered.

AI Analysis

Friends, this is the kind of business that Benjamin Graham called a cigar butt, but at ₹186.80 I am not sure there is enough free puff left. Goodricke is a tea and coffee producer, an industry where the product is largely a commodity, costs are at the mercy of weather and labour, and pricing power is limited. The financials confirm this: return on equity is only 5.80% and return on capital employed is just 3.22%. No wonderful business compounds at that rate. The latest quarter shows ₹8 crore net profit on ₹306 crore of sales, a margin of about 2.6%. That is a razor-thin cushion. The market price of ₹186.80 sits against a book value of ₹149.81, so I would be paying 1.25 times book. That is not absurd if returns improve, but the P/E of 114.53 is very demanding unless today's profit jump is the new normal. Profit growth of 149.85% looks spectacular, but it starts from a low base, and a PEG of 1.45 suggests much of that optimism is already in the price. Mr. Market is not offering me a bargain; he is asking me to extrapolate. On the positive side, the Piotroski score of 7/9 indicates improving fundamentals, and sales grew 7.79%. There is also an asset base that may include value in tea estates. But as an investor, I need a margin of safety. Zero dividend means no cash while I wait. Without reliable debt and promoter data, I cannot fully assess balance-sheet risk. This is a cyclical, low-return commodity business. In a good tea price cycle, earnings can jump; in a bad one, they can vanish. If I owned it, I would watch quarterly margins, monsoon, and capital allocation. At this price, I will let someone else take the first sip.

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