Bhagwati Auto (504646)

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

Key Financials

Strengths

• Strong ROE of 29.8% and ROCE of 17.64% indicate efficient use of capital.
• High growth: sales up 35.46% and profit up 151.06%, with a low PEG of 0.13.
• Reasonable valuation at P/E of 12.45 despite strong reported growth.
• Healthy Piotroski F-Score of 7/9 suggests solid financial fundamentals.
• Latest quarter profitable with sales of ₹43 Cr and net profit of ₹4 Cr.

Concerns

• Promoter holding and debt/equity data are not disclosed, making ownership and leverage risk unclear.
• Dividend yield of only 0.46% offers little income cushion.
• Stock is 32% below its 52-week high, indicating possible cyclical pressure or earlier overvaluation.
• Profit growth of 151% is likely unsustainable and may mean-revert.

AI Analysis

At ₹461.65, Bhagwati Auto is a small-cap auto component player with a market cap of just ₹136 crore. Let me start with what I like. The business earns a return on equity of 29.8% and ROCE of 17.6%, which are impressive for any company, and it does so while trading at only 12.45 times earnings. The price-to-book of 2.93 is not cheap in Graham's absolute sense, but a high ROE can justify a premium. The latest quarter shows sales of ₹43 crore and net profit of ₹4 crore; scaled up, that supports the trailing earnings power. Profit growth of 151% is extraordinary, but I must ask: is this a durable franchise or a cyclical bounce? Auto components are inherently cyclical and competitive. I see no promoter holding data and no debt/equity figure, so I cannot properly assess leverage or insider alignment. That bothers me. The dividend yield is a thin 0.46%, so this is not an income story. The stock is 32% below its 52-week high of ₹680, but still 38% above its low of ₹333.30. Graham would say the margin of safety is unclear at this price. The Piotroski F-score of 7/9 is healthy; the PEG of 0.13 suggests the market is pricing in much slower growth, or perhaps it smells mean reversion. I would not blindly chase 151% profit growth. Instead, watch whether sales growth of 35% can continue and whether margins hold. If the earnings are normalized, 12.45 P/E is reasonable; if they are peak-cycle, the investor may be buying at the wrong point. I need more data before calling it a wonderful business, but the returns on capital and growth screens make it a candidate worth studying.

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