Sumuka Agro (532070)

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

Key Financials

Strengths

• ROE of 19.76% and ROCE of 22.66% indicate efficient use of capital.
• Sales growth of 24.31% shows solid demand traction in packaged foods.
• Piotroski F-Score of 7/9 suggests reasonably sound financial health.
• Latest quarter sales of ₹21 Cr show the business is generating meaningful revenue momentum.

Concerns

• P/E of 49.76 and P/B of 9.27 leave little margin of safety; PEG of 3.04 highlights expensive valuation vs profit growth.
• Profit growth of only 8.45% is far below sales growth of 24.31%, suggesting margin pressure.
• Zero dividend yield means investors rely entirely on capital gains.
• Promoter holding is not disclosed, raising governance uncertainty for a small-cap company.

AI Analysis

At ₹198, Sumuka Agro has a market cap of only ₹141 crore. I cannot call this an obvious Graham bargain: the P/E of 49.76 and price-to-book of 9.27 mean I am underwriting a great deal of future prosperity, and the zero dividend means my return depends solely on Mr Market becoming even more enthusiastic later. The business has some attractive features. Return on equity is 19.76%, return on capital employed is 22.66%, and the Piotroski F-score of 7 out of 9 hints at decent financial health. There is no reported debt-to-equity figure, which is a gap I would expect a prudent owner to fill. The top line is growing: sales up 24.31%. But that growth is not reaching the bottom line, with profit growth of only 8.45%. The latest quarter tells the same story: ₹21 crore of sales produced just ₹1 crore of net profit. The PEG ratio of 3.04 confirms that the market’s price already incorporates too much optimism for my taste. When a packaged-food company is valued at nearly 50 times earnings, I need predictable earnings expansion, not just revenue momentum. A 9.27 book value multiple is far removed from any margin of safety. I also notice promoter holding is not available. In a small Indian company, promoter skin in the game matters enormously to me. Dividends are zero; management is reinvesting, which is acceptable if returns remain high, but the profit growth slowdown suggests reinvestment may not be creating commensurate value. This is a fast-growing sales story with slow-growing earnings, and the price leaves no room for error. I would wait for a much lower price or clearer evidence that margins can expand.

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