Mafatlal Inds. (500264)

FairStock Score: 22/100 — RISKY

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

Key Financials

Strengths

• Book value of ₹132.11 provides some support; P/B of 1.37 is not excessive.
• ROE of 10.16% and ROCE of 10.30% show the existing asset base generates double-digit returns.
• Dividend yield of 1.59% gives a small income cushion while waiting for a turnaround.
• Latest quarter revenue of ₹717 crore shows the business still has meaningful operating scale.

Concerns

• Latest quarter net profit of just ₹4 crore on ₹717 crore sales implies razor-thin margins.
• Profit growth is down 77.51% and sales growth is -21.19%, indicating rapid deterioration.
• Piotroski F-Score of 3/9 and FairStock Score of 22/100 both point to high financial risk.
• Price at ₹180.65 is close to the upper end of the ₹107.15–₹204.90 52-week range, so the stock is not obviously cheap.

AI Analysis

At first glance, ₹180.65 against book value of ₹132.11 and a P/E of 9.41 looks like a Graham-style entry. But I have learned to never judge a business by one ratio. The latest quarter tells the real story: sales of ₹717 crore, yet net profit of only ₹4 crore. That is practically no margin. Profit growth has collapsed 77.51%, and sales are down 21.19%. A cheap multiple on trailing earnings means little when the earnings stream is evaporating. The Piotroski F-score of 3/9 is the kind of number that keeps me awake at night—it signals weak operational health. ROE and ROCE of 10.16% and 10.30% are respectable at the end of a cycle, but they are backward-looking. I cannot access promoter holding or debt-equity data, and in a textile commodity business, that makes me more cautious, not less. A 1.59% dividend yield offers some comfort, but a 52-week range of ₹107.15 to ₹204.90 with the price near the upper half means the market has already re-rated this stock. FairStock score of 22/100 labels it risky, and Piotroski agrees. Would I buy this? Only if I believed the current quarter was a cyclical trough. Textiles are a cyclical, competitive, low-moat industry. Without evidence of cost discipline, pricing power, or a cleaner balance sheet, this looks more like a value trap than a bargain. I want to see sales stabilising, profit margins recovering, and an F-score moving toward 7 or 8 before I put a rupee in. Until then, Mafatlal is on my 'too hard' pile.

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