Saraswati Commer (512020)

FairStock Score: 57/100 — STEADY

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

Key Financials

Strengths

• At ₹9,322.10, the stock trades at a P/E of 12.81 and P/B of 1.18 against book value of ₹7,886.61, leaving modest downside if book value is credible.
• Sales growth of 172.89% and profit growth of 162.82% have been explosive, and a PEG of 0.08 suggests the market is pricing in little continuation of this growth.
• The Piotroski F-score of 7/9 points to sound recent fundamentals, including profitability, leverage, and operating efficiency.
• Latest quarter net profit of ₹25 Cr on sales of ₹33 Cr translates to a ~76% net margin, indicating high operating leverage if this quality is sustainable.

Concerns

• ROE of 10.04% and ROCE of 8.32% are mediocre; this is not a high-quality financial franchise earning exceptional returns on equity.
• Zero dividend yield means the minority shareholder must rely entirely on capital gains, which depend on uncertain continued growth.
• Debt/equity and promoter holding are N/A, making it impossible to assess financial leverage and insider commitment from the given data.
• The 52-week range of ₹8,650-₹15,799 and tiny latest-quarter sales of ₹33 Cr raise questions about volatility and scalability.

AI Analysis

As a value investor, I first ask what this business earns on equity. Saraswati Commer earns a return on equity of 10.04% and ROCE of 8.32%. That is not a franchise; it is barely above a bank fixed deposit. I do not pay up for average capital allocation. The price of ₹9,322.10 is only 1.18 times book value, with book value at ₹7,886.61, so there is some asset support. But the latest quarter numbers look almost too good: sales of ₹33 crore and net profit of ₹25 crore, a margin that most NBFCs cannot sustain. Reported sales growth of 172.89% and profit growth of 162.82% explain the headline P/E of 12.81 and PEG of 0.08, but growth at such pace is often a small base effect. A 52-week range of ₹8,650 to ₹15,799 tells me the market itself has been uncertain about the right price. Piotroski F-score of 7/9 suggests decent financial health, though I note there is no debt/equity figure and promoter holding is not available. Zero dividend yield means the only returns available come from price appreciation or book value growth. FairStock calls it 'Steady' with 56/100, and I agree: not exciting, not a catastrophe. In Buffett's terms, a wonderful business must earn high returns on capital and be predictable. This is a small NBFC with modest returns and explosive recent growth; that is not a combination I can confidently call wonderful. I would need proof that the profit margin is real and durable, the loans are good, and the growth can continue without excessive leverage. At 12.81 times earnings, valuation is not obviously expensive, but I buy a business only when the economics are clear. Here, the clarity is missing.

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