Veljan Denison (505232)
CyclicalFairStock Score: 14/100 — RISKY
Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,767.8 |
| Market Cap | ₹831.67 Cr |
| P/E Ratio | 18.33 |
| ROCE | 14.34% |
| ROE | 11.46% |
| Dividend Yield | 0.86% |
| Profit Growth | -24.06% |
| Debt/Equity | — |
| Sales Growth | -9.64% |
| 52-Week Range | ₹752 — ₹1,767.8 |
| Sector | Auto Components |
| Book Value | ₹492.6 |
Strengths
- No meaningful debt as D/E is not reported, providing financial cushion in a downturn.
- ROCE of 14.34% and ROE of 11.46% indicate acceptable capital efficiency.
- Latest quarter remains profitable with net profit of ₹5 Cr on sales of ₹33 Cr.
- Book value of ₹492.60 provides a tangible asset base, though at a premium price.
Concerns
- Sales growth is negative at -9.64% and profit growth is sharply down at -24.06%.
- Piotroski F-Score of 3/9 signals weak fundamental health.
- P/B of 3.59 with declining earnings makes the valuation appear rich.
- Price is at the 52-week high while business metrics are deteriorating, a risky combination.
AI Analysis
At ₹1,767.80, Veljan Denison has a market cap of ₹832 crore, and the share sits at the top of its 52-week range. But as Graham said, price is what you pay, value is what you get. The scorecard here is not pretty. Sales have fallen 9.64% and profits are down 24.06%. The latest quarter shows just ₹33 crore of sales and ₹5 crore of net profit. That is a business in contraction, not compounding. The Piotroski F-Score of 3/9 reinforces my caution: profitability, leverage, and efficiency signals are weak. A FairStock score of 11/100 calling it risky seems fair. On the positive side, the company carries no meaningful debt on the numbers given, and ROCE of 14.34% with ROE of 11.46% shows that the equity base earns an acceptable return. Book value is ₹492.60, but at 3.59 times book, I am paying a significant premium for that return. With an 18.33 P/E, the market is still pricing in stability while the actual trajectory is downward. If earnings were stable, this might be a reasonable cyclical; but with profit growth at -24.06%, I cannot call it a bargain. As Buffett would say, turnarounds seldom turn, and a business earning less this year than last, with weak scores on objective metrics, does not merit my capital. I would rather wait for evidence that demand has stabilized, sales are growing again, and return metrics improve. Patience is the investor’s friend. This is a cyclical that currently looks rich, not cheap.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer