Sobhagya Mercant (512014)

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

Key Financials

Strengths

• Trades at 0.44x book value while book value is ₹88.11 per share — a classic statistical margin of safety.
• ROE of 34.86% and ROCE of 33.71% suggest exceptional capital efficiency if the reported figures are reliable.
• Profit growth of 65.75% with a PEG of 0.78 implies the market is not fully paying for earnings momentum.
• Piotroski F-Score of 7/9 indicates healthy fundamentals across profitability, leverage and operating efficiency.

Concerns

• Screen data is internally inconsistent: current price ₹38.96/market cap ₹33 Cr contradict the 52-week range of ₹679-₹920 and the reported P/E of 27.69.
• Sales growth is only 5.12%, so 65.75% profit growth may be non-recurring or driven by margins rather than durable business expansion.
• Dividend yield is 0.00%, so shareholders receive no income while they wait for a re-rating.
• Promoter holding and debt/equity are N/A, leaving ownership and leverage risks unverified in a ₹33 Cr microcap.

AI Analysis

Let me start with what Graham taught: price is what you pay, value is what you get. Sobhagya Mercant shows a market price of ₹38.96 against a book value of ₹88.11. That means I am being asked to pay 44 paise for every rupee of net assets. On its face, that is a substantial margin of safety. The operating returns look unusually strong, too: ROE of 34.86% and ROCE of 33.71%. A business earning more than a third on capital while trading at less than half book is either a rare bargain or a data trap. In diversified commercial services, a wide moat is not obvious; I would need to see repeat customers, pricing power, and low capital intensity, not just ratios. Profit growth of 65.75% with a PEG of 0.78 and a Piotroski F-score of 7/9 reinforces the statistical story. But I cannot ignore the oddities. Sales growth is just 5.12%, so the earnings leap is not coming from the top line. Dividend yield is zero; I am expected to wait for price appreciation only. More troubling, the financial screen does not hang together: a ₹33 Cr market cap with stated quarterly net profit of ₹6 Cr would imply an enormous earnings yield, yet the reported P/E is 27.69. And the 52-week range of ₹679 to ₹920 is far above the current price. These inconsistencies remind me that screens are starting points, not conclusions. If the book value is real and the high returns are durable, Sobhagya is an asset play with a free optionality on profit growth. If the figures are stale or distorted, the apparent bargain is an illusion. Graham would demand verified filings, debt information, and promoter ownership before committing capital. My conclusion: the numbers scream asset play, but the missing facts keep me from shouting.

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