RIR Power Electr (517035)

FairStock Score: 26/100 — RISKY

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

Key Financials

Strengths

• Sales grew 36.24% and profit grew 134.27%, showing strong recent demand.
• Piotroski F-Score of 7/9 suggests moderate financial health and operational efficiency.
• Latest quarter is profitable with ₹4 Cr net profit on ₹26 Cr sales.
• ROCE of 10.51% exceeds ROE of 8.37%, indicating some operating return above equity return.

Concerns

• P/E of 151.82 and P/B of 147.85 are extremely high relative to book value of ₹11.98.
• ROE of 8.37% is too low to justify paying 147.85 times book value.
• Stock rose from ₹131.90 to ₹1,771.30 in 52 weeks, indicating speculative froth.
• Dividend yield is just 0.11%, offering negligible income support.
• Debt/equity and promoter holding are N/A, leaving leverage and ownership unclear.

AI Analysis

When I see RIR Power Electr at ₹1,771.30 with book value of only ₹11.98, my first thought is not opportunity but speculation. Benjamin Graham taught that price is what you pay, value is what you get; here the market is paying 147.85 times book for a business that earns just 8.37% on equity. Even a good company bought at a foolish price can become a bad investment. The growth numbers look impressive: sales up 36.24% and profit up 134.27%. But from what base? The latest quarter shows sales of ₹26 Cr and net profit of ₹4 Cr, so a market capitalization of ₹1,359 Cr implies that perfection must continue for many years. A P/E of 151.82 and a PEG of 1.78 still leave no margin of safety. The stock has moved from ₹131.90 to ₹1,771.30 in 52 weeks, a more than thirteen-fold jump. That looks like momentum, not value. ROE of 8.37% is mediocre; ROCE of 10.51% is barely better. The Piotroski F-Score of 7 suggests finances are not broken, but a sound balance sheet at a silly price does not protect you from paying too much. A dividend yield of 0.11% means the shareholder receives almost no current return. Graham would ask: what are you paying and what are you getting? Here, you are paying for years of future growth that may never appear. Debt/equity is not available, so I cannot judge leverage either. In the electrical equipment industry, a real moat can exist, but nothing in these figures justifies a 147.85 P/B. This is a fast grower, but at this valuation it belongs in the too-hard pile. I would wait for a lower price or evidence that returns on capital improve substantially.

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