Sonal Adhesives (526901)
CyclicalScore breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹81.03 |
| Market Cap | ₹49.11 Cr |
| P/E Ratio | 17.12 |
| ROCE | 21.86% |
| ROE | 15.18% |
| Dividend Yield | 0% |
| Profit Growth | -50% |
| Debt/Equity | — |
| Sales Growth | 9.97% |
| 52-Week Range | ₹30.4 — ₹81.03 |
| Sector | Chemicals & Petrochemicals |
| Book Value | ₹14.13 |
Strengths
- Respectable ROE of 15.18% and ROCE of 21.86% indicate efficient capital allocation.
- Sales growth of 9.97% shows modest top-line momentum.
- Debt/equity not reported suggests the company may be running without significant borrowings.
- Latest quarter sales of ₹29 crore provide a revenue base for potential earnings recovery.
Concerns
- Net profit fell 50% and latest quarter profit is zero, indicating severe margin compression.
- P/B of 5.73 is expensive relative to book value of ₹14.13 for a commodity chemical maker.
- Piotroski F-score of 4/9 signals weak financial health.
- No dividend and undisclosed promoter holding reduce transparency.
AI Analysis
Let me start with what I see. Sonal Adhesives is a small commodity chemicals player with a market cap of just ₹49 crore. At ₹81 per share, I'm being asked to pay 17.12 times earnings—but those earnings are now half of what they were. The latest quarter shows net profit of zero on sales of ₹29 crore. That is not the kind of margin of safety Benjamin Graham taught me to look for. The company does some things right. ROCE of 21.86% and ROE of 15.18% are respectable, and if debt is truly absent, the balance sheet may not be burdened. Yet sales grew about 10% while profit fell 50%. That tells me pricing power is weak—a hallmark of a commodity business with no durable moat. The P/B of 5.73 is particularly rich for a commodity chemical maker with a book value of just ₹14.13. I'd rather buy a wonderful company at a fair price than a mediocre commodity business at any price. Here, the price is not fair, and the business quality is below my standard. The Piotroski score of 4 out of 9 reinforces the financial weakness. With no dividend and promoter holding not disclosed, I have little evidence of shareholder friendliness. This looks like a cyclical business showing strain. I need to see profit margins recover and remain stable through a full commodity cycle before I'd consider this. For now, I'll pass until the numbers give me a compelling reason to act.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer