Saffron Industri (531436)

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

Key Financials

Strengths

• Low P/E of 5.65 suggests cheap on trailing earnings
• Profit growth of 95.35% with PEG of 0.06 indicates strong earnings momentum
• Piotroski F-Score of 6/9 points to decent operational health
• ROCE of 86.90% shows efficient use of scarce capital employed
• Latest quarter net profit of ₹1 Cr on ₹2 Cr sales implies a high margin if sustainable

Concerns

• Negative ROE of -29.73% implies negative shareholder equity; balance sheet is impaired
• Sales declined 38.71%, indicating a shrinking business
• Price of ₹8.03 is below the 52-week low of ₹22.11, signaling extreme distress or data issues
• No dividend and promoter holding not disclosed; micro-cap of ₹6 Cr adds liquidity risk

AI Analysis

At ₹8.03, Saffron Industri has a market cap of just ₹6 Cr. Ben Graham might call it a cigar butt—a cheap stock with one last puff. The P/E of 5.65 and reported profit growth of 95.35% with a PEG of 0.06 catch the eye. But let's dig deeper. Sales have fallen 38.71%, and the latest quarter's ₹2 Cr revenue yielded ₹1 Cr net profit—a 50% margin that is hardly sustainable for a paper company. The negative ROE of -29.73% tells the real story: shareholder equity is negative. That's why book value and debt/equity are N/A. The company has accumulated losses eroding its capital base. ROCE of 86.90% is mathematically impressive only because capital employed is tiny when equity is negative—it's not a sign of a durable competitive advantage. The paper industry is cyclical and commoditized; there's little pricing power or moat here. The stock trades at ₹8.03, far below its 52-week low of ₹22.11, which shows how violently the market has repriced it. No dividend, no promoter holding data, and a micro-cap float make this highly speculative. The Piotroski score of 6/9 suggests some operational improvements, but that cannot substitute for a healthy balance sheet. As Graham advised, we must protect against loss before seeking gains. This is a potential turnaround at best, not a quality compounder. I would wait for positive equity, stable sales, and evidence that margins are real before deploying capital.

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