Suryalata Spg. (514138)

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

Key Financials

Strengths

• Trades at a P/E of 4.22 and P/B of 0.72, well below book value of ₹582.32.
• ROE of 11.37% is reasonable for a small textile business.
• Piotroski F-Score of 7/9 suggests improving recent fundamental health.
• Latest quarter delivered ₹14 Cr net profit on ₹126 Cr sales, an encouraging margin recovery.
• Small market cap of ₹182 Cr makes it a potential overlooked value situation.

Concerns

• Sales growth of only 3.75% indicates a stagnant top line; profit surge may be low-base or cyclical.
• ROCE of 7.74% is weak, suggesting limited pricing power and a commoditised textile business.
• Debt/Equity is not available, leaving balance sheet leverage risk unclear.
• Dividend yield of just 0.61% offers minimal downside support while waiting for value to unlock.

AI Analysis

Suryalata Spg. is exactly the kind of small, ignored situation Graham would instruct me to study with a pencil. At ₹417.30, the market hands me a share with book value of ₹582.32, so I am buying at 0.72 times net assets. Add a P/E of 4.22 and a market cap of just ₹182 Cr, and the initial arithmetic is compelling. But I must separate value from value trap. The business earns an 11.37% ROE, which is respectable, but ROCE is only 7.74%, reminding me that a textile producer in a commoditised industry rarely possesses pricing power. Sales grew at just 3.75%; this is not a growth gem. The 302.99% profit growth looks spectacular, yet with such anaemic revenue expansion, it smells of a low-base recovery or cyclical tailwind, not a durable franchise. Last quarter, sales of ₹126 Cr yielded net profit of ₹14 Cr—roughly an 11% margin—encouraging, but one quarter proves nothing. Piotroski F-Score of 7/9 gives me some comfort that the financials are improving, though not pristine. I am concerned that debt/equity is unavailable; in an asset-heavy textile business, leverage can turn a cheap stock into a permanent loss of capital. The dividend yield of 0.61% means I am not paid to wait. Still, at 0.72 times book, with a P/E in the fours, the market is pricing in pessimism. If the balance sheet is genuinely sound and the latest margin can be sustained, Mr. Market has offered a margin of safety. My verdict: an asset play, not a wonderful business. I would need several more quarters of profit consistency and evidence that capital allocation is shareholder-friendly before committing serious money.

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