Swastika Investm (530585)

FairStock Score: 23/100 — RISKY

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

Key Financials

Strengths

• Strong reported ROCE of 32.56% reflects efficient capital deployment in recent period
• ROE of 16.54% is respectable for an asset-light broker
• Trailing P/E of 10.47 appears low relative to past earnings
• Modest dividend yield of 1.09% shows some cash return to shareholders

Concerns

• Sales down 17.80% and profit down 39.61%—business is contracting sharply
• Latest quarter net profit of only ₹4 Cr suggests earnings have collapsed from the pace implied by trailing P/E
• P/B of 20.86 vs book value ₹42.17 per share leaves no asset cushion
• Piotroski F-score of 3/9 indicates weak financial health; 52-week range from ₹43.65 to ₹879.55 shows extreme speculation

AI Analysis

Let me examine this the way Graham would: what am I buying, and at what price? Swastika Investm is a stockbroking firm—an inherently cyclical, low-moat business where customers can leave at the click of a button. The recent numbers are not encouraging. Sales are down 17.80%, and profits have fallen 39.61%. The latest quarter shows just ₹28 Cr in sales and ₹4 Cr in net profit—nowhere near the pace needed to support a ₹1,302 Cr market cap. The trailing P/E of 10.47 looks cheap only because past earnings were much higher. As a value investor, I am suspicious of earnings at the top of a boom. The balance sheet shows book value of just ₹42.17 per share, while the stock trades at ₹879.55—a P/B of 20.86. That is not value; that is euphoria. ROE of 16.54% and ROCE of 32.56% look fine, but in a commodity business, high returns attract competition and quickly revert. The Piotroski score of 3/9 reinforces my worry about deteriorating financial health. The 52-week range, from ₹43.65 to ₹879.55, tells me Mr. Market has swung violently; this is a speculative favourite, not a stable franchise. With a dividend yield of only 1.09%, I am not being paid to wait. The margin of safety is absent. In Graham's words, an investment operation must protect principal and provide adequate return. This does neither. I would put this in the 'too hard' pile until earnings stabilise and the price returns to something closer to intrinsic value.

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