Karnawati Innovation (531671)

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

Key Financials

Strengths

• Extremely low P/E of 2.18 and ₹12 Cr market cap versus latest quarterly sales of ₹71 Cr.
• ROCE of 20.72% suggests decent operational capital efficiency.
• Piotroski F-Score of 6/9 indicates moderate financial health.
• Latest quarter net profit of ₹2 Cr against ₹12 Cr market cap shows a sharp earnings recovery.
• Profit growth of 1000.00% highlights a meaningful turnaround from a weak base.

Concerns

• P/B of 10.05 with book value of ₹0.21 gives almost no tangible asset margin of safety.
• Sales growth is 0.00%, so the top line is stagnant.
• Dividend yield is 0.00%, providing no shareholder return.
• Promoter holding is N/A, raising governance and transparency concerns; micro-cap liquidity is also risky.

AI Analysis

At ₹2.11, Karnawati Innovation looks like a statistical bargain that would make Graham pause. A P/E of 2.18 and a market cap of only ₹12 crore against latest quarterly sales of ₹71 crore suggest the market is giving almost no credit to the business. But I must ask: why? The book value is a thin ₹0.21 per share, so a P/B near 10 means there is no asset cushion. The celebrated ROE of 353.94% is not a sign of a wonderful franchise; it is an arithmetic mirage of a tiny equity base. ROCE of 20.72% is more credible, but with sales growth flat at 0.00%, the company is not compounding its top line. Profit growth of 1000.00% is the usual base-effect tease; one quarter does not make an enterprise. Latest quarter net profit of ₹2 crore on ₹71 crore sales is a razor-thin 2.8% margin. With zero dividend and promoter holding not disclosed, I cannot judge whether minority shareholders are being treated fairly. Piotroski F-Score of 6/9 is acceptable but hardly a clean bill of health. This looks like a possible turnaround—a cigar butt with one puff left. If the profitability persists, the valuation is absurdly cheap; if it is a working-capital illusion or a cyclical blip, the low price can get lower. I would need audited annual numbers, cash flow statements, and management answers before investing. In a ₹12 crore micro-cap, liquidity and governance risks are high. Graham would demand a clear margin of safety in tangible assets, not just earnings power. I will watch this from the sidelines unless the business proves it can grow sales and sustain margins.

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