Gravity (India) (532015)

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

Key Financials

Strengths

• P/E of 2.47 and market cap of ₹4 Cr make it an eye-catchingly cheap stock on the surface.
• Latest quarter shows a net margin of roughly 8.3% with ₹5 Cr profit on ₹60 Cr sales.
• Reported profit growth of 1000% indicates a sharp earnings rebound from a depressed base.
• ROE of 282.45% signals high accounting return on the small equity base, if earnings are recurring.

Concerns

• ROCE is negative at -38.24%, contradicting the high ROE and suggesting core operations are not earning on capital employed.
• Sales growth is 0.00% and dividend yield is 0.00%, so there is no expansion or shareholder return.
• Current price of ₹4.31 is below the 52-week low of ₹5.10, a sign of weakness or illiquidity.
• P/B of 1.59 means paying a premium over book value of ₹2.71, with no promoter holding data to validate governance.

AI Analysis

At ₹4.31, Gravity (India) appears to be a statistically cheap stock. A P/E of 2.47 and a market cap of just ₹4 Cr catch my eye, but in Graham's world cheapness must be supported by quality and evidence. What do I see? A 282% ROE is impressive on paper, but ROCE is negative at -38.24%. That contradiction tells me the earnings driving the ROE may not come from core operations. A company cannot have a poor return on capital employed while producing a sustainable 282% return on equity unless there are one-off gains or an unusually small equity base. With sales growth at 0.00%, this is not a fast grower. The latest quarter shows ₹60 Cr sales and ₹5 Cr profit, yet the overall P/E suggests annual earnings of only about ₹1.6 Cr. That gap makes me question the quality and recurrence of that quarterly profit. The Piotroski F-Score of 5/9 is mediocre, not a glowing endorsement. The stock trades below its 52-week low of ₹5.10, a sign of distress, not of safety. Book value is ₹2.71; I am paying ₹4.31, nearly 1.6 times book, for a textile business with no pricing power, no dividend, and no promoter holding data. There is no identifiable moat. This looks like a possible turnaround or cyclical special situation, but the figures do not demonstrate a durable competitive advantage. In Buffett's language, I want a wonderful business at a fair price, not a questionable business at a low multiple. Here the numbers raise more red flags than assurances. I would pass.

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