Sakthi Finance (511066)

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

Key Financials

Strengths

• Headline P/E of 9.56 is low, offering apparent valuation comfort if earnings stabilize.
• Dividend yield of 3.34% provides some income cushion to patient holders.
• Book value per share is ₹36.32, and ROCE of 10.48% shows some capital productivity.
• Latest quarter remains profitable with ₹4 Cr net profit on ₹55 Cr sales.

Concerns

• Profit growth is down 18.48% while sales growth is just 0.04%, pointing to stagnation and margin pressure.
• Piotroski F-Score of 4/9 indicates weak fundamental health and potential balance-sheet stress.
• P/B of 1.61 with ROE of only 7.34% means investors are paying a premium for subpar returns.
• Debt/Equity is not available, making leverage and solvency impossible to judge.

AI Analysis

When I look at Sakthi Finance, I first ask what I am actually buying. At ₹58.48, the market values this investment company at ₹378 Cr, or 1.61 times book value of ₹36.32. That is not a bargain. Graham would want a margin of safety; here you are paying a premium for a business whose latest quarter earned only ₹4 Cr on ₹55 Cr of sales. The full picture is more sobering: sales growth is 0.04% and profit fell 18.48%. A company cannot be a compounding machine if earnings are shrinking and revenue is flat. The reported return on equity is 7.34%, well below what I expect from a financial business, and the Piotroski F-score of 4 suggests the balance sheet and operations are not strengthening. The 3.34% dividend is attractive, but dividends are only safe if earnings support them; with profit declining, I would want to see cash flows and asset quality. I cannot even assess debt because the debt/equity ratio is not provided. In investing, what you don't know can hurt you. The PEG ratio of 239 is a warning, not a metric: it says the market is paying a huge multiple for almost no growth. Price has moved from ₹20.20 to ₹58.48, but a rising stock does not turn a mediocre business into a great one. This looks like a slow grower at best, trading at a price that already assumes improvement. I would need a lower price, or evidence of a genuine turnaround—better profitability, recovered earnings, and growth—before I would commit any capital. For now, patience is the better position.

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