ACS Tech (530745)

FairStock Score: 37/100 — MIXED

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

Key Financials

Strengths

• Revenue growth of 86.03% and profit growth of 398.25% show strong momentum
• Piotroski F-Score of 7/9 indicates solid recent financial health
• PEG ratio of 0.13 suggests the market may be underpricing growth if it proves sustainable
• Price at the 52-week high of ₹109.50 reflects strong market demand

Concerns

• P/E of 31.93 and P/B of 6.62 versus book value of ₹16.53 leave little margin of safety
• ROE of 7.40% and ROCE of 6.79% are low for such a high valuation multiple
• Latest quarter net margin is thin: ₹3 Cr profit on ₹67 Cr sales, roughly 4.5%
• No dividend and promoter holding not disclosed; governance and minority alignment are unclear

AI Analysis

Let me apply the same test I would to any business. First, do I understand it? ACS Tech is in IT-enabled services, and while the sector can be wonderful, the figures here make me pause. Sales grew 86% and profit grew 398%, but I have learned to be suspicious of one-year hockey sticks. The latest quarter shows ₹67 Cr of sales and only ₹3 Cr of net profit — a thin 4.5% margin. I see no durable moat in these numbers. A business that earns low returns on capital while trading at 31.93 times earnings is not a bargain. Book value is ₹16.53, yet the price is ₹109.50; I am paying 6.62 times book for returns on equity of just 7.40%. Benjamin Graham would call that lack of a margin of safety. The Piotroski F-Score of 7/9 is healthy, and the PEG ratio of 0.13 looks inexpensive only if 398% profit growth is repeatable, which history tells me is unlikely. There is no dividend, and promoter holding is not available; I cannot judge whether the people running the shop are aligned with minority shareholders. The FairStock Score of 37/100 matches my own mixed feeling: growth is real on the surface, but quality and valuation are not in my favour. I do not want to buy a fast-growing company whose earnings power is not yet proven at a price that already assumes perfection. If this company can convert its revenue growth into higher ROE and consistent margins, then the story becomes interesting. For now, my rule is: a wonderful price cannot rescue an unproven business, and a wonderful business cannot justify paying without evidence of durability. This may be a fast grower, but I will watch and wait for either a better price or a stronger track record.

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