Lakhotia Poly. (535387)

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

Key Financials

Strengths

• Low P/E of 9.71 offers apparent cheapness if earnings stabilize.
• Reported ROE of 69.94% and ROCE of 38.57% show high current capital efficiency.
• Latest quarter is still profitable: ₹1 Cr net profit on ₹8 Cr sales.
• Price has fallen to near its 52-week low, potentially pricing in much of the bad news.

Concerns

• Sales growth is deeply negative at -69.27%, indicating severe demand collapse.
• Piotroski F-Score of 3/9 suggests weak overall financial health.
• Price-to-book of 4.07 is expensive relative to book value of ₹8.88.
• Zero dividend and no promoter holding details reduce transparency and shareholder friendliness.

AI Analysis

At ₹36, Lakhotia Poly looks statistically cheap, but I smell a value trap. The P/E of 9.71 is low, and the ROE of 69.94% is dazzling at first glance. But Graham taught me to strip apart the numbers. Sales have collapsed by nearly 69%, profits are down 39%, and the Piotroski F-Score is a weak 3/9 — a clear sign that the business quality is deteriorating. A 52-week range of ₹34.50 to ₹185.70 tells a brutal story: this stock has shed about 80% of its value, and when the market marks down a small-cap textile stock that far, the market usually knows something. Book value is only ₹8.88 against a price of ₹36.12, so I'm paying 4.07 times tangible equity for a shrinking business. That's no margin of safety. The high return on capital is being computed on a tiny, eroded equity base; it doesn't mean a durable franchise. There is no dividend, so I'm relying entirely on future price appreciation, which requires a reversal in a textile industry that gives no signs of pricing power. With no promoter holding disclosed, I can't judge alignment. This is a cyclical or distressed manufacturer, not a compounding machine. I'd need to see sales stabilise, margins hold, and balance-sheet strength before I'd even study it further. Better to pass and let someone else pick up pennies in front of a steamroller.

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