Saboo Sodium (530461)

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

Key Financials

Strengths

• Revenue growth of 20.29% shows the company is expanding its top line.
• Latest quarter remains profitable: ₹17 Cr sales and ₹1 Cr net profit.
• Book value of ₹12.47 per share provides some asset backing, with the stock trading at 1.66 times book.

Concerns

• P/E of 514 and PEG of 25.33 imply extreme overvaluation relative to earnings and growth.
• Profit growth of -41.78% even as sales grow 20.29% signals margin compression.
• ROE of 0.21% and ROCE of 3.86% are far below acceptable return thresholds; there is no dividend yield.
• Piotroski score of 4/9 indicates weak financial health.

AI Analysis

Let me look at Saboo Sodium the way I look at any business. The first figure that stops me is the price-earnings ratio of 514. That means I am being asked to pay ₹514 for every rupee of earnings. Benjamin Graham said price is what you pay, value is what you get. At this price, I get very little value. The return on equity is only 0.21%, and the return on capital employed is just 3.86%. I could earn more in a fixed deposit without taking any business risk. Revenue did grow 20.29%, but profit fell 41.78%. A 20% sales increase with a 42% profit decline tells me that growth is not being converted into shareholder wealth. The latest quarter shows sales of ₹17 Cr and net profit of ₹1 Cr, so there is some activity, but the market capitalisation of ₹87 Cr is far too high for that level of earnings. Even after that quarter, the trailing earnings are tiny, and a PEG ratio of 25.33 screams that expectations are far ahead of fundamentals. Book value is ₹12.47 per share, and the stock trades at ₹20.70, about 1.66 times book. With returns this low, book value gives little comfort. The Piotroski score is 4 out of 9, suggesting weak financial health. There is no dividend, so I cannot even get paid to wait. The stock is at the top of its 52-week range, from ₹10.40 to ₹20.70, so the margin of safety is thin. I do not see a durable moat. This is not a wonderful business at a fair price; it is a weak business at an expensive price. I will pass.

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