Sky Industries (526479)

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

Key Financials

Strengths

• P/E of 11.08 with PEG of 0.68 suggests undervaluation relative to recent 28.57% profit growth
• Piotroski F-Score 7/9 indicates sound fundamentals
• ROCE 16.68% and ROE 12.42% reflect decent capital efficiency
• Dividend yield of 1.28% offers some shareholder return

Concerns

• Sales growth only 4.14%; profit growth is driven by margin expansion, not top-line momentum
• Latest quarter net margin is under 5% (₹1 Cr profit on ₹21 Cr sales), leaving little buffer
• Debt/Equity and promoter holding are not disclosed; lack of transparency
• At 52-week high with P/B 2.09, no margin of safety

AI Analysis

Let me begin with a simple truth: buying a business at 11 times earnings is not automatically cheap. Sky Industries trades at ₹106.29 with a market cap of ₹84 Cr. The P/E is 11.08 and the PEG is 0.68, so on profit growth of 28.57%, the stock looks reasonably valued. The Piotroski F-Score of 7 out of 9 suggests the company is not financially distressed. ROCE at 16.68% and ROE at 12.42% are decent, and a 1.28% dividend yield gives the shareholder something while waiting. But I must look behind the numbers. Sales grew only 4.14%. When profit rises 28.57% on nearly flat sales, that is margin expansion, not organic business building. Textiles are a competitive, low-margin industry. Such margin improvements are often temporary. The latest quarter shows ₹21 Cr in sales and just ₹1 Cr in net profit—a net margin under 5%. That is thin, fragile profit. I also notice that debt-to-equity is unavailable, and promoter holding is not given. As a minority investor, I cannot accept missing information on matters as important as leverage and promoter commitment. At ₹106.29, the stock sits at the top of its 52-week range of ₹63.06 to ₹106.29. The price-to-book is 2.09, against a book value of ₹50.89. For a small-cap slow-growing textile company, this is not a compelling margin of safety. This is a slow grower with a temporary earnings bump. If sales growth stays near 4%, profit growth will likely revert. I would wait for a lower price or clear evidence of sustainable top-line growth before acting.

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