Zenotech Lab. (532039)

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

Key Financials

Strengths

• Profit growth of 59.26% with sales growth of 14.41% indicates improving operating leverage.
• Latest quarter net profit margin is around 15% (₹2 Cr profit on ₹13 Cr sales), showing decent profitability.
• Piotroski F-Score of 7/9 suggests recent financial health is above average.
• No dividend is paid, allowing full earnings retention for growth, if management deploys capital wisely.

Concerns

• Very high P/E of 75.24 and P/B of 4.14 leave almost no margin of safety at the current price.
• ROE of only 3.55% means shareholder capital is being used inefficiently despite strong reported profit growth.
• Sales growth of 14.41% is far below profit growth, raising questions about sustainability of that profit jump.
• Zero dividend yield forces investors to rely entirely on uncertain capital appreciation.

AI Analysis

At ₹64.90, Zenotech Lab commands a market cap of ₹402 crore. Last quarter sales were ₹13 crore and net profit ₹2 crore, which annualises to roughly ₹8 crore of earnings. Yet the trailing P/E sits at 75.24. That is a rich price for any business, especially one with ROE of just 3.55%. As Graham would say, price is what you pay, value is what you get. I am getting only ₹3.55 of earnings power for every ₹100 of book value, and I am being asked to pay 4.14 times book. There is no dividend yield, so my return depends entirely on the market reappraising this stock. The 59.26% profit growth sounds exciting, but sales growth is only 14.41%. That gap can come from margin expansion, but with a lowly ROCE of 9.40%, I am not convinced the business has a durable moat. The Piotroski F-Score of 7/9 is a small positive, and the company may be financially sound, but a sound business at too high a price is still a poor investment. The PEG ratio of 2.04 tells me I am paying more than twice the growth rate when adjusted for earnings yield, which is not a bargain. This looks like a fast grower that the market has already discovered; the stock is at its 52-week high. I need to see much better capital efficiency and a wider margin of safety before I would consider putting my money here. For now, I would rather be patient and miss the trade than overpay for hope.

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