Sulabh Engineers (508969)

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

Key Financials

Strengths

• Low P/E of 8.70 and PEG of 0.22 make the stock look optically cheap on reported earnings.
• Reported profit growth of 39.02% shows near-term earnings momentum.
• Piotroski F-Score of 6/9 suggests moderately sound financials, not a deeply distressed balance sheet.
• Book value of ₹2.91 provides a concrete asset base, and P/B of 1.76 is not extreme if profitability improves.

Concerns

• Sales declined by 12.86%, so profit growth is not backed by a growing business top line.
• Latest quarter net profit of ₹1 Cr equals sales of ₹1 Cr, an unusual margin that raises earnings-quality doubts.
• ROE of only 3.89% and zero dividend mean poor compounding for shareholders.
• Promoter holding and debt/equity are not disclosed, creating transparency issues for a micro-cap NBFC.

AI Analysis

Let me start with what I understand: a company is worth the present value of the future cash it can generate. Sulabh Engineers, a small NBFC with a market cap of just ₹52 crore, does not make the cut easily. At ₹5.12, it trades at 8.70 times earnings and 1.76 times book value of ₹2.91. The price-earnings multiple looks cheap, but cheapness must be backed by a durable engine. This business earns only 3.89% on equity. If management cannot turn ₹100 of retained earnings into more than ₹4 of annual profit, shareholders are not being served. ROCE of 9.28% is better but still mediocre in a lending business. Sales have contracted by 12.86%, and the latest quarter shows revenue of just ₹1 crore with reported net profit of ₹1 crore. That unusual equality makes me question the quality of the profit; it may contain non-operating elements rather than recurring loan income. A 39.02% jump in profits sounds exciting, and the PEG of 0.22 looks tempting, but profit growth from a shrinking base is not the same as compounding. There is zero dividend, so the small shareholder receives nothing while waiting. Promoter holding is not disclosed, which is another yellow flag for a micro-cap. The stock has already risen from ₹2.03 to ₹5.12, so the market has noticed. Piotroski score of 6 out of 9 is passable, but not a strong signal of financial health. In Graham's language, I would demand a margin of safety. At 1.76 times book with weak returns and falling sales, that margin is thin. This is not a business I can sleep on with the current information. I would wait for sustainable revenue, honest profit margins, and a better return on equity before acting.

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