Khoobsurat Ltd (535730)

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

Key Financials

Strengths

• Headline valuation appears cheap at P/E of 7.64 and P/B of 1.19
• Latest quarter is profitable with ₹2 Cr net profit, and reported profit growth is 209.3%
• Book value of ₹1.37 provides some tangible asset support near the current price
• Piotroski F-Score of 5/9 suggests some basic fundamental criteria are being met

Concerns

• Latest quarterly sales of ₹0 Cr raise serious questions about the quality and source of profits
• ROCE of -4.75% indicates the core business is not earning an acceptable return on capital
• Zero dividend yield means shareholders are not paid to wait
• Promoter holding and debt/equity are undisclosed, leaving governance and balance sheet transparency unclear

AI Analysis

At ₹1.63, Khoobsurat looks like a cheap stock: a 7.64 P/E and a 1.19 P/B against book value of ₹1.37. But price alone never made a bargain. I ask what the business earns from its operations. The latest quarter shows sales of ₹0 crore, yet net profit of ₹2 crore. Where is that profit coming from? If it is not from selling textiles, but from non-operating or exceptional items, then the apparent earnings power is an illusion. ROCE of -4.75% tells me the core capital is destroying value; ROE of 6.27% is moderate, not compelling. The 209.3% profit growth looks thrilling until I remember the base was tiny and sales growth is zero. Graham would call this a speculative statistic, not economic reality. The Piotroski score of 5/9 is mediocre, and with no dividend, I am not paid to wait. Promoter holding is not disclosed, which is a governance red flag for a small cap. Book value of ₹1.37 offers some floor, but paying ₹1.63 for assets that earn a weak return on equity and a negative return on capital is not value; it is hope. There may be hidden assets or a genuine turnaround, but the burden of proof is on the company. I need several quarters of real sales, margins, and honest capital allocation before I call this a wonderful business. Until then, I would rather miss the rally than buy a story I cannot verify.

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