Contil India (531067)

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

Key Financials

Strengths

• Sales growth of 17.50% and profit growth of 16.67% show consistent expansion.
• ROE of 22.35% and ROCE of 28.34% indicate strong capital efficiency on current earnings.
• PEG ratio of approximately 1.03 suggests the growth is not excessively expensive relative to earnings growth.
• Piotroski F-Score of 7/9 reflects generally healthy fundamentals

Concerns

• Price-to-book of 30.58 is extremely high, leaving almost no asset backing for investors.
• Stock has rallied from ₹19.21 to ₹201.20 in the 52-week range, creating severe re-rating risk.
• No dividend means investors depend entirely on capital appreciation.
• Trading and distribution businesses typically have low pricing power and limited competitive moats

AI Analysis

Let me first apply the Graham test. Contil India sells at ₹201.20 against a book value of just ₹6.58 — that is 30.6 times book. By any classical measure, there is no margin of safety. The P/E of 17.68 is less extreme, but for a trading and distribution company, I want either a wide moat or a very cheap price. I see neither. The business has grown sales by 17.50% and profits by 16.67%, and with a PEG around 1.03, that growth is reasonably priced only if it continues for a long time. Return on equity of 22.35% and ROCE of 28.34% look impressive, but they are earned on a very small equity base of ₹6.58 per share. One bad year could damage that capital. The latest quarter shows sales of ₹9 crore and net profit of ₹1 crore — the absolute scale is small for a ₹311 crore market cap. The Piotroski F-score of 7 is decent, suggesting recent fundamentals are improving. But I cannot ignore the 52-week range: from ₹19.21 to ₹201.20. That is a ten-fold rise, and buying after such a move is not investing; it is speculating on momentum. There is no dividend, so the whole return depends on future price appreciation. In a trading and distribution business, customers have little loyalty and competition can enter easily. This may be a fast grower, but at this price I am not being adequately compensated for the risk. If you own it, watch margins and cash flow carefully. If you are thinking of buying, wait for a price that offers a real margin of safety.

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