Shalimar Wires (532455)

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

Key Financials

Strengths

• Reported profit growth of 152.50% with a PEG of 0.24 indicates strong recent earnings momentum.
• ROE of 12.30% and ROCE of 12.10% show respectable capital efficiency for a small textile business.
• Piotroski F-Score of 7/9 suggests decent financial health across profitability, leverage, and efficiency metrics.
• Sales growth of 13.43% provides a modest and steady top-line expansion base.

Concerns

• P/E of 19.52 and P/B of 2.70 leave little margin of safety for a microcap in a competitive textile segment.
• Latest quarterly net profit of ₹1 Cr on ₹35 Cr sales implies a thin ~2.9% margin; the profit spike may not be sustainable.
• No dividend (0.00% yield) means all returns depend on capital appreciation and future growth.
• Insufficient disclosures — promoter holding and debt/equity are N/A — prevent proper governance and solvency assessment.
• Stock at 52-week high ₹25.28 after rallying from ₹15.00; chasing risk is high.

AI Analysis

When I study Shalimar Wires, I must first admit what I do not know. No promoter holding, no debt-equity figure, no reliable score — for a ₹108 Cr microcap in 'other textile products', missing information is a warning, not a detail. The numbers I do have tell a mixed story. A 12.30% ROE and 12.10% ROCE are acceptable, but not the hallmark of a franchise with pricing power. At ₹25.28, I am paying 19.52 times earnings and 2.70 times book value of ₹9.36. That is not a Graham-style bargain. The reported 152.50% profit growth and 0.24 PEG catch attention, but I have learned to distrust one-year earnings explosions, especially when the latest quarter earned only ₹1 Cr on sales of ₹35 Cr — a razor-thin margin that leaves no cushion. Sales growth of 13.43% is decent, and a Piotroski F-Score of 7/9 suggests the balance sheet and operations are not deteriorating. Still, there is no dividend to compensate while I wait, and the stock sits at the top of its 52-week range of ₹15.00 to ₹25.28. For a small commodity-like company, the market is pricing in continued perfection. Buffett said the most important quality of a business is the durability of its moat. I cannot identify a durable moat here. This may become a fast grower if quarterly profits repeat and margins expand, but a single quarter of 152% growth does not make an investment. I would wait for more evidence, or a price closer to book value, before committing investor capital. In this case, inaction is the most intelligent action.

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