Sangal Papers (516096)

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

Key Financials

Strengths

• Trades at 0.64 P/B, a 36% discount to book value of ₹351.85 per share
• P/E of 13.24 and PEG of 0.21 suggest the market is pricing in very low expectations
• Sales growth of 17.75% and profit growth of 105.88% show recent operating momentum
• Piotroski F-Score of 7/9 indicates reasonably healthy fundamentals across balance sheet and profitability metrics

Concerns

• Latest quarter net profit is ₹0 crore, so earnings consistency is weak and the annual profit growth may be a low-base effect
• ROE of only 4.30% means the large asset base is not translating into strong shareholder returns
• No dividend yield and promoter holding not disclosed reduce income visibility and governance comfort
• Paper is a cyclical, asset-heavy industry with thin margins; cost and demand swings can hurt recent improvements

AI Analysis

At ₹223.55, Sangal Papers hands me a classic Graham-style margin of safety: the stock trades at 0.64 times book value, while the book is ₹351.85 per share. A P/E of 13.24 is not demanding, and the PEG ratio of 0.21 suggests the market prices in very little growth. Sales grew 17.75% and reported profit surged 105.88%—but I must be skeptical. A 105% profit jump from a small base is far less impressive than it looks, especially when the latest quarter shows net profit of ₹0 crore. The business earns only 4.30% ROE and 9.85% ROCE, so it is not a wonderful compounding machine. It is a modest asset-heavy cyclical in a difficult industry. The Piotroski F-score of 7/9 is a point in its favour: it hints that the balance sheet and operations have improved. But the absence of dividend yield, unknown promoter holding, and an insufficient data score remind me that this is a microcap with limited disclosure and governance transparency. In true Graham fashion, I would view this as an asset play, not a growth story. The market cap of ₹30 crore is tiny, so large investors cannot participate easily, but a small shareholder can. I need to see the asset base translate into earnings power. If management can lift ROE closer to ROCE through better working capital and cost control, the discount to book may close. If it cannot, the asset value may slowly leak away. I would keep this on a watch list, demand a satisfactory margin of safety, and only invest with eyes open to cyclicality and thin profit margins. The numbers say cheap; they do not yet say high quality.

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