Sacheta Metals (531869)

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

Key Financials

Strengths

• Profit grew 14.93% despite a 14.89% sales decline, showing some margin discipline.
• Piotroski F-Score of 6/9 suggests moderate financial health and improvement.
• Latest quarter remains profitable: ₹22 Cr sales and ₹1 Cr net profit.
• Dividend yield of 1.28% offers a small but tangible shareholder return.

Concerns

• ROE of 4.42% and ROCE of 6.03% are weak, yet the stock trades at 4.97 times book value.
• Sales declined 14.89%, so profit growth may be driven by cost cuts or one-offs rather than durable demand.
• P/E of 21.68 is expensive for a commodity aluminium business with no clear moat.
• Debt/Equity and promoter holding are not available, leaving capital structure and governance unclear.

AI Analysis

At ₹20.09, Sacheta Metals has gone from ₹3.55 to a 52-week high, but I try not to confuse a rising price with a wonderful business. This is a ₹251 crore aluminium company trading at 21.68 times earnings and 4.97 times book value, while the underlying return on equity is only 4.42% and ROCE is just 6.03%. That means I would be paying nearly five rupees for every rupee of book value for a business earning less than five percent on that book. Benjamin Graham would ask: where is the margin of safety? I do not see it. Sales fell nearly fifteen percent, down 14.89%, and although profit grew 14.93%, growth driven by cost cuts or one-offs while the top line shrinks is not durable compounding. At the latest quarter, sales were ₹22 crore and net profit only ₹1 crore; annualize that and the current P/E becomes even harder to justify. The Piotroski score of 6/9 is mildly encouraging, and the 1.28% dividend yield gives shareholders a small token, but these do not offset poor returns on capital. Aluminium fabrication is a competitive, commodity-like business with little pricing power; nothing in these numbers suggests a moat. A PEG of 1.45 assumes profit growth continues, yet the company must first demonstrate that sales can grow again. For a value investor, this looks like a turnaround situation already priced for perfection. I would wait for a better price, or for evidence that returns on capital and sales are genuinely improving.

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