Taparia Tools (505685)

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

Key Financials

Strengths

• Price-to-book of 0.02 and P/E of 0.21 offer an extraordinary margin of safety if reported earnings are reliable.
• High profitability: ROE 41.45%, ROCE 47.88%, and latest quarterly net profit of ₹38 Cr on sales of ₹256 Cr.
• Strong growth: profits up 23.08% versus sales up 8.83%, with a PEG ratio of 0.01.
• Piotroski F-Score 7/9 suggests sound financial health on the published numbers.
• Dividend yield of 25% provides a substantial income buffer for patient shareholders.

Concerns

• Current price of ₹4.48 is below the stated 52-week low of ₹10.50, indicating possible data issues, corporate actions, or severe distress.
• Tiny market cap of ₹7 Cr creates liquidity and governance risks; promoter holding and debt/equity are not disclosed.
• Iron and steel is cyclical with no durable moat, so high returns may not be sustainable.
• The financials look too good compared to the market value, demanding careful verification before investing.

AI Analysis

At ₹4.48, Taparia Tools is being valued at just two percent of its ₹219 book value. That is a Graham-style margin of safety almost never seen in a company earning a 41.45 percent return on equity and a 47.88 percent return on capital. If these figures are credible, the market cap of ₹7 crore is pricing the business for extinction, while the latest quarter alone shows sales of ₹256 crore and net profit of ₹38 crore. The profit growth of 23.08 percent on sales growth of 8.83 percent suggests operating leverage, and the PEG ratio of 0.01 is absurdly cheap if that momentum continues. A 25 percent dividend yield adds a tangible cash return even while waiting. With a Piotroski F-score of 7 out of 9, the financial health appears solid on the published numbers. Yet I must be disciplined. The industry is iron and steel products, a cyclical and capital-intensive sector with no enduring consumer franchise, and the price sitting below the stated 52-week range of ₹10.50 to ₹27.69 is a serious red flag. A ₹7 crore market cap means thin liquidity, and I would be uncomfortable without full promoter holding details or debt numbers. In the true Buffett-Graham spirit, I buy only when the numbers are verifiable and the business can be understood. If the reported earnings and book value are real, this is a remarkable asset play with growth characteristics. If they are not, it is a value trap. The price is not the risk; the credibility of the financials is.

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