Indag Rubber (509162)

FairStock Score: 28/100 — RISKY

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

Key Financials

AI Analysis

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

When I look at Indag Rubber, I try to strip away the glamour of a stock that has moved from ₹83 to ₹224.70. At ₹224.70, I am being asked to pay ₹602 Cr for a tyre and rubber business that earned only about ₹20 Cr — hence a P/E of 30.09. The book value is ₹92.78, so the market price is 2.42 times what a conservative accountant would say the owners own. That alone destroys the margin of safety I demand. Inside the business, the numbers are even more sobering: return on equity is just 4.52% and return on capital employed is a meagre 2.93%. A business that cannot generate much more on its owners' capital than a fixed deposit is not compounding wealth, no matter how high the stock goes. Sales grew by only 0.88%, and the latest quarter shows ₹56 Cr of sales producing just ₹3 Cr of net profit. That is a 5.4% margin, at best ordinary. The reported profit growth of 539% looks spectacular, but with sales flat, I regard it as a base-effect bounce, not a durable trend. The PEG of 0.07 is an illusion; Graham would never value a company on one extraordinary earnings number. To be fair, the Piotroski score of 7/9 hints at recent improvement in financial health, and the 2.44% dividend gives a small payment while you wait. But I cannot ignore the FairStock Score of 28, which labels this risky, or the fact that the stock is sitting at the top of its 52-week range. A good business purchased at a sensible price is a sound investment; this one is a low-return business at a premium price. I would wait for either a much cheaper price or evidence of sustained high returns before putting any money here.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

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