Auto.Corp.of Goa (505036)

FairStock Score: 63/100 — STEADY

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

Key Financials

Strengths

• ROE of 27.79% and ROCE of 20.16% show strong capital efficiency and possible pricing power.
• Sales growth of 80.86% and profit growth of 194.90% demonstrate strong demand and operating leverage.
• P/E of 14.99 is not demanding on trailing earnings if the high growth can persist.
• Piotroski F-Score of 7/9 suggests reasonable financial health and operating discipline.
• Dividend yield of 1.50% provides modest shareholder compensation while waiting.

Concerns

• Latest quarter net margin is only 5.5%: ₹11 Cr profit on ₹200 Cr sales; annualising it implies a much higher P/E than the trailing 14.99.
• P/B of 5.39 against a book value of ₹380.51 leaves little margin of safety if earnings normalise.
• Profit growth of 194.90% in an auto components business could be cyclical peak earnings, not sustainable growth.
• Promoter holding is not disclosed, so insider commitment cannot be verified.

AI Analysis

Let me look at Auto.Corp.of Goa as a business, not just a ticker. The numbers scream growth: sales are up 80.86%, profits are up 194.90%, and return on equity is a handsome 27.79%. Return on capital employed of 20.16% suggests management is putting money to work intelligently. The Piotroski F-Score of 7 out of 9 gives me some comfort on the financial health side, and a dividend yield of 1.50% is a small token for waiting. At ₹2,049.55, the stock trades at 14.99 times trailing earnings, which is not unreasonable if the growth is durable. But I am wary. The P/B is 5.39, while book value is only ₹380.51. That means most of what I pay is for future growth, not for assets I can count on. The latest quarter bothers me even more: sales of ₹200 Cr produced only ₹11 Cr of net profit. That is a 5.5% net margin. If I annualise that quarter, the implied earnings yield is far lower than the trailing P/E of 14.99 suggests. I need to know whether this is a seasonal dip or the start of margin pressure. Auto components is a cyclical business, and a profit surge of 194.90% often happens when the industry is coming out of a downturn. A PEG of 0.11 looks too good to be true; those numbers appear when profits have just jumped and may not repeat. Also, promoter holding is not disclosed, and in India I want the owners to have real skin in the game. I would not chase this stock today. I would keep it on my watchlist and wait for evidence that growth and margins are durable.

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