Southern Latex (514454)

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

Key Financials

Strengths

• Piotroski F-Score of 6/9 suggests no immediate financial distress on the given metrics.
• Book value of ₹10.92 per share provides some tangible asset backing.
• The stock is about 70% below its 52-week high, so a good part of the earlier optimism has been removed.
• The reported 100% profit growth makes the PEG ratio optically low at 0.95, though sustainability is unproven.

Concerns

• Latest quarter shows zero sales and zero profit, leaving no current operating earnings to value.
• P/E of 94.8 with ROE of only 3.81% and ROCE 4.21% means an expensive price for weak returns.
• Sales growth is 0% and dividend yield is 0%, offering neither growth nor cash return.
• Promoter holding and debt/equity are N/A, and the FairStock score is insufficient data, so transparency is poor.

AI Analysis

At ₹27.40, Southern Latex is a small ₹20 crore cap in a commodity textile industry. Graham would begin with facts: P/E 94.8, P/B 2.51, ROE 3.81%, ROCE 4.21%. These numbers tell me I am paying an expensive multiple for mediocre returns. Sales growth is zero, and the latest quarter has zero sales and zero profit. The 100% profit growth and 0.95 PEG may look cheap, but those figures rest on a broken or negligible earnings base; I cannot trust them. There is no dividend, so I cannot even wait for a cash return while the story plays out. Debt/equity is N/A, promoter holding is N/A, and the FairStock score is insufficient data. In this business, lack of information is a risk, not a reason to invest. The stock's collapse from ₹89.88 to ₹27.40 means Mr. Market has turned very negative, yet a low price alone is not a margin of safety. The positive points are few: the Piotroski F-Score is 6/9, implying no immediate distress; book value is positive at ₹10.92; and the price is 70% below its high, so some pessimism is already in the price. But a 2.5 times book price for a 3.81% ROE is still not a bargain. This looks like a possible turnaround story, not a compounder, but without quarterly revenue and profit numbers, I cannot see the turn. My circle of competence says avoid until the company proves it can generate consistent operating earnings. I would rather miss the move than take an uninspectable risk.

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