Ecoplast (526703)

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

Key Financials

Strengths

• ROCE of 20.15% and ROE of 16.57% show efficient capital use despite a weak quarter.
• Sales growth of 8.03% indicates the business is still expanding its top line.
• Latest quarter revenue of ₹36 crore shows meaningful operating activity relative to the ₹154 crore market cap.
• The stock is trading below its 52-week high of ₹580, avoiding an obvious euphoric entry point.

Concerns

• Profit fell 33.49%, and the latest quarter net margin is only about 2.8% (₹1 crore profit on ₹36 crore sales), indicating weak near-term earning power.
• P/E of 20.77 and PEG of 2.59 look expensive for a business with declining profits.
• Piotroski F-score of 4/9 points to deteriorating financial health.
• Zero dividend means no cash return while shareholders wait for a recovery.

AI Analysis

Ecoplast is a small industrial plastic products company, and at first glance it reminds me that size is not protection. With a market capitalisation of only ₹154 crore and a share price of ₹481.80, the market is asking me to pay 20.77 times trailing earnings and 3.48 times book value. Those are not distressed prices. A Graham disciple would want a margin of safety, and I do not see one here. The company earns a 16.57% ROE and a 20.15% ROCE, which are respectable and suggest decent capital allocation inside a niche business. But the latest quarter tells a colder story: sales of ₹36 crore produced only ₹1 crore of net profit, a razor-thin margin. Reported profit has fallen 33.49%, and the Piotroski F-score of 4 out of 9 signals weakening fundamentals, not a business getting stronger. Sales grew 8.03%, so there is some demand, but growth without profit is simply delayed disappointment. The dividend yield is zero, so I receive no cash while I wait. At a PEG ratio of 2.59, the valuation is not supported by its earnings trajectory. I would compare this to buying a modest machine shop: it may run, but there is limited evidence of a durable moat, pricing power, or an owner-oriented track record. The absence of promoter holding data and debt-to-equity data makes it harder to judge skin in the game and financial risk. This could be a cyclical business tied to industrial activity, and right now the cycle seems to be against it. In Buffett's language, this is an OK business at an un-OK price. I would wait for a lower price or evidence that profit margins have genuinely recovered before committing capital.

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