Ultramarine Pig. (506685)

FairStock Score: 31/100 — RISKY

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

Key Financials

Strengths

• Price-to-book of 1.17 provides a meaningful asset cushion near book value of ₹375.34.
• Piotroski F-Score of 7/9 suggests decent financial health and no obvious accounting red flags.
• Sales growth of 9.57% shows the business is still expanding its top line.
• Latest quarterly net profit margin of approximately 13.8% indicates reasonable operating efficiency.
• Moderate P/E of 16.11 is not excessive for a company with a dividend yield of 1.35%.

Concerns

• Return on equity of just 7.05% is below what I would expect from a quality compounder.
• Profit growth of 3.76% lags sales growth, implying margin pressure and limited pricing power.
• PEG ratio of 2.42 suggests valuation is not compelling relative to muted earnings growth.
• Debt/equity is not disclosed, making it difficult to fully assess balance-sheet risk.

AI Analysis

At ₹440.70, I am being asked to pay roughly ₹1,298 crore for a business earning a modest 7% on equity. That is not the kind of return that excites me. Graham taught me to look for a margin of safety, and price-to-book of 1.17 times does offer some asset support, but book value alone does not create wealth. The real question is whether this dye and pigment business can consistently earn more than the cost of capital. With ROCE of 10.42%, it barely clears that hurdle. Sales grew 9.57%, yet profit growth lagged at just 3.76%. That tells me costs are eating the top-line gains, and pricing power is weak. A PEG ratio of 2.42 reinforces my worry: the current earnings multiple of 16.11 is not cheap relative to single-digit profit growth. The Piotroski score of 7 out of 9 is respectable and suggests the financial health is not deteriorating, but a good score does not make a wonderful business. The latest quarter shows sales of ₹196 crore and net profit of ₹27 crore, which is a decent margin, but one quarter is not a trend. Dividend yield of 1.35% is a small comfort, but I do not buy a business for that alone. This looks like a slow grower, perhaps with cyclical characteristics, not a compounding machine. It has some durability, but no evident moat from the numbers. I would need a lower price or clear evidence of improving returns before committing capital. At this price, I can watch it, but I cannot honestly say it is a bargain.

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