Nath Industries (502587)

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

Key Financials

Strengths

• Trades at a 50% discount to book value (P/B 0.50) with book value at ₹138.07 versus price of ₹69.40
• Low trailing P/E of 8.39, suggesting the market is not paying a premium for the earnings stream
• Sales growth is modestly positive at 2.04%, showing some stability in top-line demand
• 52-week range of ₹42-₹85 indicates the stock is not at a speculative high, offering a margin of safety if asset value holds

Concerns

• Profit growth is deeply negative at -88.82%, and latest quarterly net profit is only ₹1 Cr on ₹117 Cr sales—razor-thin margins
• ROE of 5.04% and ROCE of 6.49% are far below what I'd expect from a quality business, indicating weak competitive advantage
• Piotroski F-Score of 4/9 signals poor financial health and a higher risk of distress or continued deterioration
• No dividend yield (0.00%) and insufficient data on debt/equity and promoter holding leave key risks unquantified

AI Analysis

Let me look at Nath Industries as a business, not a stock ticker. At ₹69.40, I'm being asked to pay only half of the book value of ₹138.07. That's cheap on surface, and the P/B of 0.50 catches my eye. But cheapness alone is not a thesis. The company earned an ROE of just 5.04% last year—hardly a spectacular return on the equity I'd be buying into. The ROCE of 6.49% tells me the operating assets aren't generating much more than the cost of capital, if at all. Paper is a commodity business, and this one shows no pricing power. Sales grew only 2.04%, but profits collapsed by 88.82%. The latest quarter sums it up: ₹117 Cr of sales yielded only ₹1 Cr of net profit—a margin under 1%. That's a business under pressure, not a franchise with a moat. The Piotroski F-Score of 4/9 reinforces my caution: financial health is mediocre. There's no dividend to compensate while I wait. At a PEG of 4.11, even the modest growth is expensive relative to the earnings decline. With promoter holding and debt-to-equity undisclosed, I'm flying blind on governance and leverage. This looks like a classic asset play: a business selling at a steep discount to book, but with weak returns and deteriorating earnings. I'd only want it if management could unlock that book value—through restructuring, asset sales, or a cyclical recovery. Otherwise, I'm buying a value trap. I'd wait for evidence of margin recovery and better capital allocation before committing a rupee.

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