India Gelatine (531253)

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

Key Financials

Strengths

• Low P/E of 8.67 and P/B of 1.78 provide a margin of safety if earnings hold.
• ROE of 16.32% indicates reasonable shareholder return generation.
• Latest quarter net profit of ₹7 Cr on sales of ₹45 Cr shows margin expansion.
• Piotroski F-Score of 6/9 points to broadly sound financials.
• Book value of ₹213.15 per share offers a tangible asset cushion.

Concerns

• Sales declined 14.71%, showing weak demand or pricing pressure.
• ROCE of 11.87% is modest, implying the business is fairly capital intensive.
• The 99.44% profit growth is likely a low-base effect and may not be repeatable.
• Promoter holding and debt details are missing, limiting full assessment.

AI Analysis

At ₹379.90 with a market cap of ₹272 Cr, India Gelatine is being offered to me at 8.67 times earnings and 1.78 times book value. That looks cheap, but I have learned that cheap can be a trap if the business quality is poor. This is a specialty chemical maker with a niche product, gelatine. I don't see a powerful consumer brand or a pricing moat; the edge is likely in manufacturing relationships and process knowledge. A 16.32% ROE is respectable, yet an ROCE of 11.87% tells me the business needs capital to generate returns. The book value of ₹213.15 provides some support, but the price is still a meaningful premium to that. The latest quarter shows sales of ₹45 Cr and net profit of ₹7 Cr, which supports the low earnings multiple on an annualised basis. However, I am bothered by the 14.71% decline in sales. A profit jump of 99.44% looks impressive, but when the top line is shrinking, I suspect a low base, cost cuts, or input-cost tailwinds rather than durable demand. The PEG of 0.09 is built on that profit spike; I cannot trust it. A 1.55% dividend yield is modest, and the Piotroski score of 6 suggests acceptable but not exceptional financial health. Graham would say price is what you pay, value is what you get. Here I get a small-cap cyclical with decent returns but no wide moat and a weak sales trend. I would need the revenue to stabilise and grow before treating this as a compounding machine. Until then, this is a possible value situation, not a certainty.

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