Rose Merc. (512115)

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

Key Financials

AI Analysis

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

I approach Rose Merc. the way I'd approach any small trading business — with suspicion. A 620% sales jump and 72% profit jump sounds wonderful, but in trading and distribution, growth can disappear as quickly as it appears. The latest quarter shows ₹21 crore sales and ₹3 crore net profit, a 14% margin that is unusually rich for a distributor. I need to know if this is durable franchise economics or a temporary product cycle. At ₹121.70, the stock sits at its 52-week high. I am paying 13.68 times trailing earnings and 2.84 times book value for a company whose reported return on equity is a meagre 1.95%. That tells me shareholder equity is not compounding at a satisfactory rate. Management claims 32% ROCE, but with debt/equity and promoter holding not provided, I cannot verify the capital structure or the skin in the game. In India, an absent promoter holding figure is a warning, not a detail. The Piotroski score of 7/9 is reassuring, but it measures the last few quarters, not the next decade. A PEG of 0.04 means nothing when base-year earnings are tiny and growth has been explosive — if the growth normalises, the 'bargain' disappears. This looks like a fast grower, but a fast grower without a moat is a speedboat on a rough sea. I would want audited accounts, cash-flow proof, and at least two more quarters of this run rate before I part with my capital. The price is at its high, so there is no margin of safety. Patience, not excitement, is the investor's best friend.

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