Patels Airtemp (517417)

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

Key Financials

Strengths

• Trailing P/E of 12.74 provides an optically reasonable earnings multiple.
• ROCE of 13.76% indicates okay operating capital efficiency despite weak ROE.
• Book value of ₹280.91 per share provides some asset backing at a P/B of 2.30.
• Modest dividend yield of 1.21% gives a token return while waiting.

Concerns

• Sales fell 33.47% and profits fell 30.18%; latest quarter net margin is only ~5% (₹3 Cr on ₹59 Cr sales).
• ROE of 7.11% is below a reasonable cost of equity; Piotroski F-Score of 3/9 signals deteriorating fundamentals.
• P/B of 2.30 means paying a premium to book for a declining, low-return business.
• Stock trades near its 52-week high of ₹646.65 despite weak operating performance, suggesting optimism is already priced in.

AI Analysis

At ₹646.65, Patels Airtemp carries a market cap of ₹360 Cr and a P/E of 12.74. On the surface that seems reasonable, but I learned from Ben Graham that a low multiple is only interesting if the business underneath is not deteriorating. Here sales have fallen 33.47% and profits 30.18%. The latest quarter tells the same story: ₹59 Cr of sales produced just ₹3 Cr of net profit, a thin 5% margin. Return on equity is a weak 7.11%, below what a shareholder deserves for bearing industrial risk. The Piotroski F-score of 3/9 reinforces my concern; this is not a financially strengthening company. Book value stands at ₹280.91, yet I am asked to pay 2.30 times book for a business whose returns are poor. A dividend yield of 1.21% gives little comfort while I wait. The 52-week range of ₹180.10 to ₹646.65 shows how Mr. Market can swing from pessimism to euphoria; today the price sits near the top even as operating numbers slump. I cannot call this a margin of safety. ROCE of 13.76% suggests decent operating use of capital, but a cyclical industrial company needs pricing power and financial strength to survive downturns. I do not see a durable moat in the figures. This looks like a cyclical business at an elevated point in the share price, not a compounder or a Graham-style asset play. I would need evidence of stabilising sales, recovering margins, and better returns on capital before considering an investment. For now, Patels Airtemp fails my test of a wonderful business purchased at a sensible price.

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