Welspun Special. (500365)
CyclicalFairStock Score: 31/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹49.41 |
| Market Cap | ₹2,619.17 Cr |
| P/E Ratio | 111.56 |
| ROCE | 9.81% |
| ROE | 25.6% |
| Dividend Yield | 0% |
| Profit Growth | 364.17% |
| Debt/Equity | — |
| Sales Growth | 16.49% |
| 52-Week Range | ₹31 — ₹49.41 |
| Sector | Industrial Products |
| Book Value | ₹1.32 |
Strengths
- ROE of 25.60% shows high accounting return on shareholders' equity.
- Piotroski F-Score of 7/9 indicates improving financial health and operating efficiency.
- Sales growth of 16.49% and profit growth of 364.17% show strong momentum and operating leverage.
- Latest quarter is profitable with ₹226 crore sales and ₹10 crore net profit.
Concerns
- Valuation is extreme: P/E of 111.56, P/B of 37.43, and price at the 52-week high.
- ROCE of 9.81% is far below ROE of 25.60%, suggesting returns may be leverage-driven or unsustainable.
- Latest quarterly net margin is only about 4.4% (₹10 crore profit on ₹226 crore sales), indicating thin earnings quality.
- FairStock Score of 31/100 flags the stock as risky, and zero dividend yield offers no compensation for waiting.
AI Analysis
At today's price of ₹49.41, Welspun Special is neither special enough nor cheap enough for me. The market values the company at ₹2,619 crore, which is 111.56 times trailing earnings and over 37 times book value. Benjamin Graham taught that paying a rich price for any business is speculation, no matter how good the story looks. The latest quarter earned only ₹10 crore on ₹226 crore of sales—a net margin of about 4.4%. Even if you extrapolate those quarterly earnings, the stock still trades at a very expensive multiple. Yes, the profit growth of 364.17% catches the eye, but such numbers from a low base often oversell quality. The Piotroski F-Score of 7/9 suggests some genuine improvement, and the 25.60% ROE looks impressive. However, the ROCE is just 9.81%. In my experience, when equity returns are far above returns on capital employed, the gap is often due to leverage or non-recurring gains, not a durable competitive advantage. There is no dividend to compensate me while waiting. Mr. Market is offering this paper at its 52-week high with a dangerously thin margin of safety. In the cyclical iron and steel business, headline growth can reverse quickly when prices turn. A disciplined investor should keep this on the watchlist, not in the portfolio.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer