Caprolactam Chem (507486)

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

Key Financials

Strengths

• Sales growth of 11.79% shows some demand traction.
• Piotroski F-Score of 6/9 indicates modest improvement in fundamentals.
• Profit growth of 1000% reflects a strong rebound, albeit from a tiny base.
• Small market cap of ₹25 Cr may offer niche flexibility.

Concerns

• ROCE of -0.48% means the company is destroying capital.
• Latest quarter net profit of ₹0 Cr shows negligible current earnings power.
• P/E of 69.58 and P/B of 4.30 are expensive for a commodity chemical business.
• Zero dividend and no promoter holding disclosure reduce transparency.

AI Analysis

At ₹52.41, this is a ₹25 crore micro-cap in commodity chemicals. Benjamin Graham would tell me to ignore the 69.58 trailing P/E because earnings are minuscule – the latest quarter net profit is ₹0 crore, so trailing profit is not a sign of health. The 1000% profit growth looks exciting, but that is from a hopelessly low base. ROCE at -0.48% tells me the company does not even earn its cost of capital. ROE of 8.89% is below what I would want from a business with so little moat. Commodity chemicals are price-takers; without pricing power, a company is at the mercy of the cycle. On the positive side, sales grew 11.79% and the Piotroski F-Score is 6/9, suggesting some operational discipline. The PEG ratio of 0.14 is a statistical illusion created by distorted profit growth; I cannot rely on it. Book value is ₹12.18, so the P/B of 4.30 is not cheap. There is no dividend to compensate me while I wait. This looks like a cyclical recovery candidate, not a predictable compounder. I need to see several quarters of real profits and positive ROCE before I consider a margin of safety. At this price, with zero current earnings and negative return on capital, the risk is too high for my temperament.

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