Hind.Adhesive (514428)

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

Key Financials

Strengths

• P/E of 7.97 gives an earnings yield above 12.5%, offering a margin of safety if earnings are sustainable.
• PEG of 0.35 indicates undervaluation relative to 22.66% profit growth.
• ROE of 22.96% and ROCE of 17.25% show strong capital efficiency and possible pricing power.
• Profit grew 22.66% despite sales falling 8.23%, suggesting cost discipline or margin improvement.
• Piotroski F-Score of 6/9 points to moderately healthy financials, not a distressed company.

Concerns

• Sales declined 8.23%, so earnings growth is driven by margins rather than broad demand, which may be cyclical.
• Zero dividend yield means no downside income cushion; total return depends entirely on re-rating or continued growth.
• Debt/equity and promoter holding are unavailable, limiting balance sheet and governance analysis.
• With a ₹208 crore market cap in a competitive industrial plastics/adhesives space, the moat is unproven from the data.

AI Analysis

At first glance, this is the kind of stock that catches a value investor's eye. At ₹405.15, the market cap is only ₹208 crore. The P/E of 7.97 gives an earnings yield of more than 12.5%, and the PEG ratio of 0.35 suggests the market is paying very little for the reported 22.66% profit growth. But I have to be careful: sales actually fell 8.23%. So the profit growth is coming from margins, not from stronger demand. That can be a sign of operating efficiency, or it can be a cyclical trap where margins revert. The 22.96% ROE and 17.25% ROCE are genuinely good numbers; they show the company can earn well on capital. Book value is ₹166.98, so the price-to-book of 2.43 is not a deep discount, but acceptable for a high-return business. The latest quarter had sales of ₹67 crore and net profit of ₹6 crore, which is about a 9% margin—respectable, but not evidence of a powerful moat. I am bothered by two things: the zero dividend yield means no cash return, so I must rely on management to reinvest wisely; and debt/equity is not available, so I cannot judge the true financial leverage. This is a small-cap industrial plastics/adhesives player in a competitive field, and it is sitting at its 52-week high. The F-score of 6 out of 9 is decent, not excellent. In the true Graham spirit, I need more disclosure and proof that the sales decline can turn around before I call this a wonderful business. Right now it is a statistically cheap stock with strong returns, but I would need to verify the balance sheet and the durability of profits.

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