Indrayani Biotec (526445)

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

Key Financials

Strengths

• Sales grew 102.14%, and latest quarter revenue of ₹35 Cr indicates significant business expansion.
• Book value per share is ₹12.43, providing a tangible asset base of roughly ₹57-58 Cr.
• ROCE is positive at 2.82%, offering a small base to improve from if the zero-profit quarter is a temporary blip.

Concerns

• Latest quarter net profit is zero and profit growth is -75%; the company is not currently earning money for shareholders.
• ROE of 1.62% and ROCE of 2.82% are far below acceptable returns, especially relative to the 4.16 times book value being paid.
• Piotroski F-score of 4/9 signals weak financial health and poor profitability trends.
• Zero dividend yield means no income while waiting for any potential recovery.

AI Analysis

Let me examine Indrayani Biotec through the lens of Graham and Buffett. The first thing that strikes me is the absence of earnings. The latest quarter shows sales of ₹35 Cr but net profit of zero, and year-on-year profit is down 75%. Sales growth of 102.14% is often a bait that traps optimistic investors; in my experience, revenue growth that does not flow to the bottom line is simply expensive activity. The company earns only 1.62% on equity and 2.82% on capital employed. Compare that with a risk-free fixed deposit that might give me 6-7%. Why would I pay a premium price for a machine that turns ₹100 of equity into ₹1.62 of profit? The stock trades at ₹51.70, 4.16 times book value of ₹12.43 per share. That gives me a market capitalisation of ₹240 Cr. The Piotroski score of 4/9 reinforces my caution; it suggests deteriorating financial health and operating efficiency. There is no dividend yield, so I cannot get paid while I wait for a recovery. The price has risen from ₹6.10 to a 52-week high of ₹51.70, but that is the market voting with hope, not weighing with evidence. As Graham wrote, price is what you pay, value is what you get. Here, I am asked to pay a large multiple for a business that has not yet proven it can convert growth into shareholder value. This looks more like a turnaround situation than a fast grower. I would need to see positive net profit, rising margins, and a return on equity comfortably above, say, 10-12% before I could consider owning it. Until then, discipline says stand aside. There is no margin of safety.

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