Mohit Paper Mill (530169)

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

Key Financials

Strengths

• Low headline valuation: P/E of 6.16 and P/B of 1.35 offer a cushion if earnings hold.
• ROE of 13.45% and ROCE of 11.97% are respectable for an asset-heavy paper business.
• Latest quarter shows net profit of ₹3 Cr on sales of ₹44 Cr, implying an operating margin of roughly 6.8%.
• Piotroski F-Score of 6/9 suggests the financial position is not deteriorating badly.

Concerns

• Sales growth is negative at -1.21%, with no clear topline momentum.
• Zero dividend yield means investors get no income while waiting for the cycle to turn.
• Promoter holding and debt-to-equity are not disclosed, creating a lack of transparency.
• Price is at the top of the 52-week range and at a 35% premium to book value, limiting margin of safety.

AI Analysis

This is a classic small-cap cyclical, not a franchise. At ₹45.95, Mohit Paper Mill trades at just 6.16 times earnings and 1.35 times book, with book value at ₹33.99. Return on equity is 13.45% and ROCE is 11.97%, so the business does earn a reasonable return on capital. But I must not confuse a cheap multiple with a cheap business. Sales are down 1.21%, profit growth is only 3.88%, and the PEG ratio of 1.59 tells me the low P/E is nowhere near as attractive as it looks. The latest quarter shows ₹44 Cr sales and ₹3 Cr profit, a respectable margin, but paper is a capital-intensive and cyclical industry. There is no dividend yield, so the small shareholder receives no cash while waiting for the cycle to turn. The Piotroski score of 6/9 is passable, but I have no debt-to-equity data and no promoter holding figures, which is uncomfortable for a ₹65 Cr company. Graham would insist on knowing who controls the business and how much debt it carries. He would also demand a margin of safety. At 1.35 times book and near the 52-week high of ₹45.95, I do not see that margin. For a company with negative sales growth, buying at a premium to book is not obvious value. This looks like a possible cyclical upturn rather than a durable compounder. I would wait for a lower price, evidence of sustained cash generation, or proof of pricing power. Until then, it stays on the watchlist, not in the portfolio.

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