Himalaya Food (526899)

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

Key Financials

Strengths

• P/E of 12.05 and P/B of 1.36 provide modest valuation comfort, with book value at ₹17.07.
• Piotroski F-Score of 7/9 suggests improving fundamentals and financial health.
• Latest quarter shows a 10% net margin, with ₹1 Cr profit on ₹10 Cr sales, indicating profitability is recovering.
• Stock has moved sharply from ₹6.81 to ₹23.21, reflecting market optimism about a turnaround.

Concerns

• Sales growth of only 2.79% means the top line is stagnant; the 1000% profit growth is a low-base effect and not sustainable.
• ROE of 4.60% and ROCE of 2.29% are far below satisfactory returns on capital, indicating weak business economics.
• Zero dividend yield and unavailable promoter holding or debt/equity data create a significant transparency gap.
• Price near the 52-week high of ₹23.21 and above book value leaves little margin of safety.

AI Analysis

I approach Himalaya Food with the caution of someone who values predictable, high-return businesses. At ₹23.21, the market cap is ₹136 Cr, and the stock trades at 12.05 times earnings and 1.36 times book value. Book value is ₹17.07, so I am paying a premium for a modest asset base. That premium is hard to justify when return on equity is only 4.60% and return on capital employed is just 2.29%. These figures tell me the underlying economics are weak; this is not a hallmark franchise. Sales growth of 2.79% is barely above nothing, so the 1000% jump in profit is a low-base mirage, not a durable compounding engine. The latest quarter did show ₹1 Cr profit on ₹10 Cr sales, a 10% net margin, but one quarter does not create an economic moat. The Piotroski F-Score of 7/9 is the only genuinely encouraging signal; it suggests the balance sheet and operations are healing. Still, with no dividend yield, promoter holding unavailable, and debt-equity not disclosed, I lack the transparency I demand. The stock has already moved from ₹6.81 to ₹23.21, so the easy money has been made. At this price, I cannot call it a bargain. A PEG of 0.02 built on a 1000% profit spike is useless. I would place this in the turnaround basket, not as a committed holding, and only after watching sales growth and margins improve over several quarters. When the numbers are uncertain, Graham's rule is simple: wait for a clear margin of safety.

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