Axtel Industries (523850)
Fast GrowerFairStock Score: 53/100 — MIXED
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 1/1
Key Financials
| Current Price | ₹666.6 |
| Market Cap | ₹1,109.68 Cr |
| P/E Ratio | 26.09 |
| ROCE | 19.76% |
| ROE | 20.18% |
| Dividend Yield | 2.75% |
| Profit Growth | 144.79% |
| Debt/Equity | — |
| Sales Growth | 45.09% |
| 52-Week Range | ₹335 — ₹666.6 |
| Sector | Industrial Manufacturing |
| Book Value | ₹66.86 |
Strengths
- Strong profitability with ROE of 20.18% and ROCE of 19.76%.
- Rapid growth: sales up 45.09% and profit up 144.79%.
- Attractive PEG of 0.27, assuming growth is sustainable.
- Piotroski F-Score of 7/9 indicates solid financial health fundamentals.
- Dividend yield of 2.75% provides some income support.
Concerns
- Rich valuation: P/E of 26.09 and P/B of 9.97 leave little margin of safety.
- Small absolute quarterly figures (₹59 Cr sales, ₹8 Cr profit) could be distorted by one-off orders.
- Debt/Equity and promoter holding not disclosed, limiting transparency.
- Stock is at its 52-week high of ₹666.60, adding momentum risk.
AI Analysis
I start with business quality. Axtel earns an ROE of 20.18% and ROCE of 19.76%—solid numbers for an Indian industrial products company. A 2.75% dividend while reinvesting in growth is respectable. But Graham taught me that one year of high growth is not a franchise. Sales grew 45.09% and profit 144.79%; the latest quarter shows ₹59 Cr sales and ₹8 Cr profit, a 13.6% net margin. The low PEG of 0.27 is seductive—if that profit growth is sustainable. But I cannot verify that from this snapshot. The D/E is not given, promoter holding is not given; that makes me uneasy. I also pay a high price: P/E of 26.09 and P/B of 9.97, near the 52-week high of ₹666.60. Book value is only ₹66.86, so I am paying nearly ten times net worth for a small, order-driven business. The Piotroski F-score of 7/9 is reassuring, and the FairStock Score of 50/100 says mixed, so I should not be complacent. A small industrial company's growth can be lumpy—one big order, one lost contract, and the percentages change. I prefer to wait for a larger margin of safety, or evidence of multi-year repeat customers. The story is attractive, but at this price the downside protection is thin. If the company compounds at 20% for many years, today's price may look fair later; I just cannot pay for certainty I don't have.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer