Prakash Woollen (531437)

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

Key Financials

Strengths

• Trading at a 17% discount to book value (₹44.71 vs. ₹37.08), providing a margin of safety on assets.
• Positive ROE of 11.13% suggests some shareholder value creation on an annual basis.
• Piotroski F-Score of 5/9 indicates moderate financial health, not deeply distressed.
• Price near the top of the 52-week range shows recent market interest.

Concerns

• Negative ROCE of -4.25% implies the core business is not earning a return on capital employed.
• Sales declined 10.48%, showing demand or pricing pressure in a competitive textile sector.
• Latest quarter net loss of ₹2 crore against ₹51 crore sales signals ongoing operational weakness.
• P/E of 0.00 and unreliable 62.50% profit growth reflect negligible or inconsistent earnings power.
• Debt/Equity not available, creating a transparency gap about leverage.

AI Analysis

This is exactly the kind of situation that tests a value investor's patience. Prakash Woollen sells for ₹37.08, yet its book value stands at ₹44.71 — a 17% discount to what the balance sheet says the assets are worth. That gives me a margin of safety, but only if the assets are real and earning power eventually shows up. The numbers tell a mixed story. The company earns an ROE of 11.13%, which is respectable for a small textile player, but the more important operating metric — ROCE — is negative at -4.25%. That divergence tells me the company is not generating solid returns on the capital employed in its actual business. The latest quarter confirms the strain: ₹51 crore in sales, yet a net loss of ₹2 crore. Sales are also shrinking, down 10.48% from the previous year. So while the asset side offers some cushion, the business itself is struggling. The so-called 62.50% profit growth is meaningless when earnings are near zero or negative; the P/E of 0.00 says there is no real earning power to underwrite. This is a classic textbook asset play, not a growing stalwart. I would not rely on a turnaround unless management proves it can stop the cash burn, stabilize sales, and turn ROCE positive. At this price, you are buying rupees of book value, but you must be willing to hold for years and hope that Mr. Market eventually values the assets more generously. Until then, it is a waiting game with a weak operating engine underneath.

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