Kumbhat Fin. (526869)

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

Key Financials

Strengths

• Trailing P/E of 7.55 is optically cheap, implying roughly ₹1 crore of earnings against a ₹8 crore market cap.
• Reported ROE of 48.21% and ROCE of 20.67% show high historical capital efficiency when profitable.
• Sales growth of 182.35% indicates revenue momentum, albeit from a very small base.
• Tiny ₹8 crore market cap leaves room for outsized recovery if profitability stabilises.

Concerns

• Latest quarter shows a net loss of ₹1 crore on sales of ₹2 crore; profit growth is down 36.84%.
• Price of ₹16.31 is 3.00 times book value of ₹5.44, demanding a premium with no visible earnings stability.
• Piotroski F-score of 4/9, zero dividend, and unavailable promoter holding signal weak fundamentals and poor transparency.
• Price is below the 52-week low range of ₹16.70–₹26.00, reflecting persistent selling pressure.

AI Analysis

This stock fails the first test I apply: can I understand, with a margin of safety, how it earns money? Kumbhat Fin is a micro-cap NBFC with a market capitalisation of just ₹8 crore. The trailing P/E of 7.55 looks tempting, and the reported ROE of 48.21% and ROCE of 20.67% suggest a historically efficient business. But Graham warned me to look behind the ratios. Sales grew 182.35%, yet profits fell 36.84%. The latest quarter had sales of only ₹2 crore and a net loss of ₹1 crore—a 50% loss margin on current revenue. That is not a sign of a durable business; it is a sign of strain. With book value at ₹5.44, the price of ₹16.31 means I am paying three rupees for every one rupee of net assets. That premium is only justified by a reliable stream of future profits, and all evidence points the other way. The Piotroski F-score is 4/9, promoter holding is unavailable, there is no dividend, and the price is below the 52-week low. The PEG of 0.04 is misleading because it uses sales growth, while actual profit growth is negative. In short, this is a possible turnaround situation, but not a business I can confidently value. I need more data: debt details, asset quality, and a quarterly profit recovery. Without them, this remains a pass. A cheap price can be a value trap; here the numbers are not yet cheap enough to compensate for the uncertainty.

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