Danlaw Tech. (532329)
CyclicalFairStock Score: 48/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,671.5 |
| Market Cap | ₹814.13 Cr |
| P/E Ratio | 14.36 |
| ROCE | 28.03% |
| ROE | 30.33% |
| Dividend Yield | 0% |
| Profit Growth | 1.59% |
| Debt/Equity | — |
| Sales Growth | 12.58% |
| 52-Week Range | ₹428 — ₹1,671.5 |
| Sector | Industrial Manufacturing |
| Book Value | ₹143.65 |
Strengths
- Exceptional capital efficiency: ROE 30.33% and ROCE 28.03%.
- Solid financial health per Piotroski F-Score of 7/9.
- Revenue momentum: sales grew 12.58%.
- Reasonable trailing P/E of 14.36 if current profitability holds.
Concerns
- Profit growth only 1.59% despite 12.58% sales growth, implying margin compression.
- Very high P/B of 11.64, leaving little asset cushion against downside.
- No dividend yield; shareholders depend entirely on capital gains.
- Price near 52-week high of ₹1,671.50, far above the low of ₹428.
AI Analysis
Danlaw Tech. presents a puzzle. The business itself earns a phenomenal 30.33% return on equity and 28.03% return on capital employed—numbers that would satisfy any owner. Its Piotroski score of 7/9 also points to a healthy balance sheet. But as Ben Graham said, price is what you pay, value is what you get. At ₹1,671.50, the market values this company at ₹814 crore, nearly 11.64 times book value of ₹143.65. That is a premium price. Sales grew 12.58%, yet profit growth is only 1.59%. The latest quarter translates to ₹4 crore net profit on ₹62 crore sales, a thin margin of about 6.5%. So while historical returns are impressive, the incremental economics appear weaker. The trailing P/E of 14.36 looks reasonable only if current earnings are sustainable, but the PEG ratio of 1.46 suggests growth is not cheap once you adjust for the pace. I also see zero dividend yield, so the investor must rely entirely on reinvestment to create value. The stock has moved from ₹428 to ₹1,671.50 in its 52-week range—already reflecting high hopes. I would not call this a margin-of-safety investment at the top of its range. I prefer to buy good businesses, but with profit growth lagging sales and the price near its high, this is a business to monitor and wait for a more favourable entry point.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer