ADC India (523411)

FairStock Score: 33/100 — RISKY

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

Key Financials

Strengths

• High ROE of 25.26% and ROCE of 46.57% indicate efficient use of capital.
• No debt on the balance sheet, reducing financial risk.
• Piotroski F-Score of 7/9 signals generally sound financial health.
• Sales growth of 14.41% shows healthy demand for telecom equipment.
• Dividend yield of 2.26% provides some income cushion.

Concerns

• Profit growth of just 5.15% significantly lags sales growth of 14.41%, implying margin compression.
• Valuation is rich: P/E of 33.31, P/B of 11.52, and PEG of 3.41 leave no margin of safety.
• Latest quarterly net profit of ₹6 Cr on sales of ₹48 Cr suggests thin and possibly volatile margins.
• FairStock Score of 29/100 and a wide 52-week range indicate high risk and potential cyclicality.

AI Analysis

Let me look at ADC India through the lens I've used all my life: is this a wonderful business, and am I paying a sensible price? At ₹1,830.10, the market is capitalizing this company at ₹849 crore. That means I am paying 33.31 times earnings and 11.52 times book value, while book value is only ₹158.82 per share. For a telecom equipment firm, that is not a cheap ticket. The strong returns on capital—ROE of 25.26% and ROCE of 46.57%—certainly catch my eye, and the absence of debt is reassuring. The Piotroski F-score of 7/9 also suggests the financial plumbing is sound. But here is the problem: sales grew 14.41% while profit grew just 5.15%. In the latest quarter, ₹48 crore of sales yielded only ₹6 crore of net profit—a margin that, if annualized, roughly matches the trailing earnings behind the P/E. When profits lag sales like that, I smell margin pressure or rising costs. At a PEG of 3.41, the market is paying a huge premium for very modest earnings growth. Even the 2.26% dividend yield doesn't compensate for the risk. The 52-week range of ₹1,150.25 to ₹2,493.00 tells me this is a volatile, cyclical ride. The FairStock score calls it risky at 29/100. I value capital preservation above excitement. This may be a quality business, but at this price it offers no margin of safety. I would wait for a lower price or clear evidence that profit growth can catch up with sales growth.

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