Lak. Electrical (504258)

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

Key Financials

Strengths

• Sales growth of 18.27% shows top-line momentum in a challenging environment.
• P/B of 1.25 against book value of ₹1,209.76 offers a tangible-asset anchor if the reported assets are genuine.
• The stock's move from a 52-week low of ₹646.10 to ₹1,512.45 reflects strong market interest and re-rating.
• Dividend yield of 0.53%, though small, indicates some effort to return cash despite weak earnings.

Concerns

• ROE of 0.90% and ROCE of 2.30% are far below acceptable thresholds; the business is not earning its cost of capital.
• Latest quarter net profit of -₹1 Cr on sales of ₹58 Cr, combined with profit growth of -892.31%, points to an earnings collapse.
• P/E of 67.83 and PEG of 3.71 make the valuation rich relative to actual and even expected earnings.
• Piotroski F-score of 4/9 signals poor financial health; promoter holding being unavailable weakens governance visibility.

AI Analysis

At first glance, Lak. Electrical's low price-to-book of 1.25 and book value of ₹1,209.76 catch my eye. But Ben Graham taught me that a cheap price only matters when the business earns an acceptable return on its capital. Here, ROE is a meager 0.90% and ROCE is just 2.30%. At ₹1,512.45, the market is paying ₹380 Cr for a company that earns almost nothing on its equity. The trailing P/E of 67.83 makes no sense to me unless the next few years deliver enormous profit growth; the PEG of 3.71 suggests that even the expected growth is not cheap. Sales did grow 18.27%, which is encouraging, but the latest quarter tells a different story: sales of ₹58 Cr resulted in a net loss of ₹1 Cr. Profit growth of -892.31% is not a temporary wobble; it is an earnings collapse. The Piotroski F-score of 4/9 reinforces my distrust. I cannot identify a durable moat in ordinary electrical equipment, and with promoter holding not disclosed, I lack visibility into whether you and I are treated as partners or merely outsiders. The stock has gone from ₹646.10 to ₹1,512.45 in the 52-week range, so optimism has already been priced in. In Graham's language, this is not a business where book value will protect me; with a 0.90% ROE, the book value is like a leaky vessel. I would need to see substantial improvement in margins and returns on capital before I would consider this a potential turnaround. The market is, for now, paying a full price for a broken earnings engine.

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