Roopa Industries (530991)

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

Key Financials

Strengths

• Sales growth of 9.14% shows the business is expanding at a steady, if unspectacular, pace.
• ROE of 11.84% and ROCE of 11.96% indicate capital is being deployed reasonably efficiently.
• Piotroski F-Score of 7/9 suggests decent recent financial health across profitability, leverage, and efficiency signals.
• Book value of ₹22.33 provides some asset backing, though the current P/B of 2.57 means that backing is not available cheaply.

Concerns

• Profit growth of only 1.32% lags far behind sales growth of 9.14%, pointing to margin compression.
• Latest quarter net margin is under 3% — ₹1 crore net profit on ₹34 crore of sales is very thin for a pharma company.
• P/E of 18.65 with a PEG of 2.60 is expensive for a business with such low earnings growth, and the 0% dividend yield offers no compensation while waiting.
• Debt/equity and promoter holding are not disclosed, making it impossible to fully assess leverage and insider alignment.

AI Analysis

At ₹57.39, Roopa Industries is a micro-cap pharmaceutical company with a market cap of just ₹45 crore. I like simple businesses, but I also demand evidence of a durable moat. Here I see a business with modest economics: return on equity is 11.84% and return on capital employed is 11.96%. That is okay, but not the kind of compounding return that creates wealth over decades. The growth story is mixed. Sales grew 9.14%, yet profit advanced only 1.32%. That tells me revenue is not flowing to the bottom line; costs or competition are absorbing the benefit. The latest quarter shows ₹34 crore of sales but only ₹1 crore of net profit, a margin under 3%. A pharmaceutical company needs scale, pricing power, or unique products to justify a P/E of 18.65. With a PEG ratio of 2.60, the market is paying a premium for very modest earnings growth. Book value is ₹22.33, so I am paying 2.57 times tangible equity. Dividend yield is zero; I receive no cash while waiting. The Piotroski F-score of 7/9 is encouraging, suggesting decent financial-signal health, but I cannot assess leverage because debt/equity is not available, and promoter holding is also not disclosed. For a value investor, undisclosed ownership and leverage data are red flags. In Graham’s language, there is no margin of safety at this price. A micro-cap with low margins, weak profit growth, and a zero dividend should trade at a discount, not at 18.65 times earnings. This looks like a slow grower with some operational improvement, but not an opportunity I can commit to without better disclosure and a wider margin of safety.

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