Nitta Gelatin (506532)

FairStock Score: 58/100 — STEADY

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

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I start with the balance-sheet and profit quality that Graham would demand. Nitta Gelatin earns a 27.45% return on equity and 24.65% return on capital employed, both excellent for a specialty-chemicals player. The Piotroski F-Score of 7 out of 9 adds confidence that this is not just reported accounting profit; the operating engine looks healthy. At today's price of ₹802, I pay 9.43 times earnings and 2.01 times book value. For a business with 30.41% profit growth and 11.20% sales growth, the PEG ratio of 0.45 is surprisingly low. That is the kind of asymmetry I look for: market pessimism, decent fundamentals, and reasonable valuation. However, I must respect the tape. The shares have fallen from ₹1,602 to ₹802 in a year. A 50% drawdown in a growing company is either a gift or a warning. The latest quarter shows revenue of ₹150 Cr and net profit of ₹26 Cr; if sustained, that supports the earnings power. But sales growth is less than half of profit growth, so margins are doing the heavy lifting. I have to ask whether this is pricing power or merely a temporary raw-material tailwind. Dividend yield of just 0.71% does not compensate me while I wait, and with debt-equity not provided, I cannot fully assess the leverage risk. Graham would say valuation is not the whole story; durability matters. I would only call this a Fast Grower if the margin expansion can be repeated over multiple cycles. The low P/E gives a margin of safety, but a low P/E in a cyclical peak can deceive. I would start a small position only after confirming that quarterly profit growth survives cost pressure, demand changes, and competitive response.

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