Everest Organics (524790)

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

Key Financials

Strengths

• ROE of 14.40% shows some historical capital efficiency despite weak recent margins.
• Sales growth of 1.28% and latest quarterly sales of ₹43 crore indicate the topline is not collapsing.
• Book value of ₹48.16 offers a tangible asset base, though price is 3.31x book.
• The company operates in the pharmaceuticals industry, which can provide demand resilience if execution improves.

Concerns

• P/E of 60.30 is unjustified when latest quarterly net profit is ₹0 crore and profit growth is -68.42%.
• ROCE of 1.76% shows severely poor return on capital employed.
• No dividend, Piotroski score of 4/9, and price below the 52-week range of ₹197–₹536.40 all signal weak financial health and market distress.
• Debt/equity and promoter holding are N/A, leaving capital structure and owner alignment unverified.

AI Analysis

At ₹159, Everest Organics looks like a fallen object, but I must be careful not to confuse a falling price with a bargain. The market values this pharma company at ₹130 crore, yet the earnings do not support the price. The trailing P/E is 60.30, and with profit growth down 68.42%, the forward P/E is far worse. The latest quarter shows sales of ₹43 crore and net profit of ₹0 crore—there is no current profit to anchor a valuation. Graham taught me to look for financial strength and reasonable profitability. Here, ROCE is only 1.76%, so the company is earning very little on the capital employed. The Piotroski score of 4 out of 9 signals weak fundamentals. Return on equity of 14.40% is respectable, but it is in the past; current conditions have deteriorated. Book value is ₹48.16, so at ₹159.20 I am paying 3.31 times book for a business whose earnings have collapsed. There is no dividend yield, and the stock is trading below its 52-week range of ₹197–₹536.40, which reflects a loss of confidence. The 1.28% sales growth provides no exciting growth story, and the PEG ratio of 47.11 suggests the price is absurdly high relative to any reasonable growth. Debt-to-equity is not available, and promoter holding is not available, so I cannot fully assess the capital structure or alignment. In such a situation, the prudent investor says no. I need evidence of a genuine turnaround: positive quarterly profit, improving margins, and a return on capital that approaches a real hurdle rate. Until then, this is not a wonderful business at a fair price; it is a weak business at an expensive price. I will pass.

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