Sh. Hari Chem. (524336)

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

Key Financials

Strengths

• Sales growth of 14.02% shows continued demand traction.
• ROE of 14.03% and ROCE of 17.66% indicate respectable current capital returns.
• Book value of ₹43.01 provides some asset backing at 1.71 times book.
• Latest quarter remains profitable with ₹1 crore net profit despite margin pressure.

Concerns

• Profit growth is down 51.32%, with latest quarter net margin only around 2.3%.
• P/E of 18.74 on falling earnings offers no clear value cushion.
• Piotroski F-Score of 4/9 suggests deteriorating financial health.
• Zero dividend yield and current price below the stated 52-week range low indicate severe market weakness.

AI Analysis

Looking at Sh. Hari Chem, my first reaction is caution. At ₹73.44, the entire business is valued at only ₹34 crore. That is small, and in commodity chemicals, size and pricing power matter. The company grew sales 14.02% but net profit fell 51.32%. The latest quarter sales of ₹44 crore produced just ₹1 crore net profit—roughly a 2.3% margin. That is a classic commodity chemicals squeeze: top line up, bottom line crushed. The P/E of 18.74 is not cheap for declining earnings; Graham would remind me that a low P/E can be a trap when E is falling. Book value is ₹43.01, so the stock trades at 1.71 times book. That is not a compelling margin of safety. ROE of 14.03% and ROCE of 17.66% are respectable, but for a cyclical business I want evidence these returns hold through the downturn. The Piotroski F-Score of 4/9 signals weak financial health. No dividend means the small shareholder gets no cash while waiting. I cannot call this a stalwart. This looks like a cyclical commodity chemical business experiencing margin compression. The market is small, the moat is narrow, and the profit trend is poor. Unless commodity prices recover and margins improve, today's P/E will look expensive on normalized earnings. I need a meaningful discount to book and stronger balance-sheet evidence before considering it. Watching sales grow while profits fall tells me the company may be buying revenue with lower pricing. As Buffett would say, it is only when the tide goes out that you see who is swimming naked. I would wait for better numbers and a clearer outlook.

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