Neelamalai Agro (508670)

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

Key Financials

Strengths

• Piotroski F-Score of 7/9 points to reasonably healthy financials
• P/E of 7.46 suggests a high earnings yield if reported profits are sustainable
• Sales growth of 22.35% shows strong top-line momentum
• Stock is trading near its 52-week high of ₹3,970, reflecting market confidence

Concerns

• ROE of only 4.11% with a P/B of 3.57 means paying a premium for weak equity returns
• Profit growth of 6.80% lags sales growth of 22.35%, indicating margin compression
• Latest quarter net profit of ₹9 Cr exceeds sales of ₹7 Cr, raising serious earnings-quality questions
• Debt/Equity is N/A, so the true leverage position is unclear

AI Analysis

I approach Neelamalai Agro with caution. Tea is a cyclical business, and these figures send mixed signals. At ₹3,962, the market cap is ₹252 Cr, so the stock sells at 7.46 times earnings. That looks cheap on the surface. But a low P/E can be a warning when earnings quality is doubtful. The latest quarter shows sales of ₹7 Cr yet a net profit of ₹9 Cr; profit cannot consistently exceed operating revenue. Until I understand whether that comes from land sales, biological asset revaluation, or other non-operating income, I cannot trust the P/E. The balance sheet story is no cleaner. Book value is ₹1,110.47 per share, while the market price of ₹3,962 means I am paying 3.57 times book for a company earning only 4.11% on equity. That is a rich price for weak returns. ROCE at 8.26% is better, but it hardly signals a wide moat. Sales grew 22.35%, yet profit grew only 6.80%—that gap tells me margins are under pressure, and the ₹9 Cr quarterly profit may not be repeatable. On the positive side, the Piotroski F-Score of 7/9 suggests the company is not financially distressed, and the PEG of 0.51 looks appealing. But with profit growth of only 6.80%, I prefer to value this as a cyclical, not a grower. The dividend yield of 0.94% is modest. In Buffett's language, this is not a wonderful business at a fair price; it may be a questionable business at a superficially low multiple. Debt/Equity is listed as N/A, so leverage risk remains unclear. I need proof that earnings come from tea operations, not accounting gains. Without that, this stays on the too-hard pile.

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