Zenith Fibres (514266)

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

Key Financials

Strengths

• Trades at a 46% discount to book value with P/B of 0.54
• Low P/E of 8.63 offers a valuation cushion
• Piotroski F-score of 6/9 suggests some financial health signals
• Latest quarter shows ₹10 Cr sales and ₹3 Cr net profit, implying a strong 30% margin if sustained
• Dividend yield of 1.91% provides a modest income floor

Concerns

• Sales declined 31.21%, indicating weak demand or business contraction
• ROE of 4.26% and ROCE of 4.30% are far below desirable returns on capital
• Debt/equity and promoter holding are not disclosed, limiting transparency
• Profit growth of 135% is from a low base and may not be sustainable given shrinking sales

AI Analysis

At ₹80.83, Zenith Fibres is selling for barely half its stated book value of ₹149.43 — a P/B of 0.54. That is the kind of margin of safety Graham would appreciate. But cheap is not enough; I must understand the earning power. The trailing P/E of 8.63 is optically attractive, and the 135% reported profit growth sounds exciting, yet sales fell 31.21%. When revenue shrinks that sharply, I question whether the profit is sustainable or just cyclical tailwind. The latest quarter shows ₹10 Cr sales and ₹3 Cr net profit — a 30% margin that would be the envy of most textile businesses, but in a weak industry I treat that as a temporary condition until proven otherwise. ROE of only 4.26% and ROCE of 4.30% tell me the business earns far less than its asset base could produce. This is not a wonderful business. It may be a wonderful price. With a 1.91% dividend yield and a Piotroski F-score of 6/9, there are some signs of balance-sheet discipline, but debt/equity is not available, so I cannot fully verify financial health. The 52-week range shows the stock has nearly doubled from ₹45 — I must be careful not to chase. A PEG of 0.06 looks absurd, but PEG is dangerous when ‘G’ comes from a low base. I would call this an asset play: value exists on the books, but unlocking it needs either a recovery in sales or a better return on capital. I'd wait for evidence of sustained demand before putting my money to work.

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