Super Tannery (523842)

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

Key Financials

Strengths

• Stock trades below book value: P/B 0.93 against book value ₹10.42 per share.
• Trailing P/E of 10.35 is low in absolute terms.
• Latest quarter remains profitable: ₹1 crore net profit on ₹60 crore sales.
• Small-cap leather business with existing sales scale; quarterly revenue ₹60 crore against market cap ₹104 crore.

Concerns

• Sales declined 18.44% and profit declined 33.33%, showing deteriorating momentum.
• Piotroski F-score of 3/9 suggests weak financial health and possible red flags.
• Low ROE of 5.94% and ROCE of 8.78% indicate poor capital efficiency.
• Latest quarterly net margin of about 1.7% leaves a very thin profit cushion.

AI Analysis

At ₹9.66, Super Tannery appears statistically cheap: a P/E of 10.35 and a P/B of 0.93 against book value of ₹10.42. But Graham warned that cheap numbers can hide deteriorating economics. This is a leather products business in a cyclical, competitive trade, and the figures are unmistakably weakening. Sales have fallen 18.44%, and profits have dropped 33.33%. The latest quarter earned only ₹1 crore on ₹60 crore of sales—a net margin near 1.7%. Return on equity is 5.94%, and return on capital employed is 8.78%. Neither is enough to create real value after inflation and reinvestment. The Piotroski F-score of 3 out of 9 is a serious warning about financial health. I don't have debt-equity data, so I cannot fully judge leverage, but I would never buy this on the balance sheet alone. The stock is at its 52-week high of ₹9.66, yet profits and sales are going backward. Market momentum and business reality have divorced. A low P/B only matters if the assets are truly worth book value and can generate earnings; here the earning power is thin and declining. Dividend yield of 0.74% gives no compensation. Is this a cyclical at the bottom and a turnaround opportunity? Possibly, but there is no evidence of stabilisation. Is it a value trap? That risk is high. Graham would demand a margin of safety in earnings power, not just assets. Until sales and margins stabilise, the balance sheet is clean, and I can see a path to higher returns, I will watch this from the sidelines.

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