Denis Chem Lab (537536)
TurnaroundScore breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹174.25 |
| Market Cap | ₹241.8 Cr |
| P/E Ratio | 12.23 |
| ROCE | 13.89% |
| ROE | 10.57% |
| Dividend Yield | 1.95% |
| Profit Growth | 88.64% |
| Debt/Equity | — |
| Sales Growth | 6.26% |
| 52-Week Range | ₹56.1 — ₹174.25 |
| Sector | Pharmaceuticals & Biotechnology |
| Book Value | ₹61.98 |
Strengths
- P/E of 12.23 and PEG of 0.26 indicate apparent cheapness against 88.64% profit growth.
- Piotroski F-Score of 7/9 suggests improving financial health.
- ROCE of 13.89% reflects decent capital efficiency.
- Modest dividend yield of 1.95% offers some cash return while waiting.
Concerns
- Sales growth of only 6.26% versus profit growth of 88.64% raises sustainability questions.
- Stock trades at 52-week high ₹174.25, up from ₹56.10, leaving limited margin of safety at P/B 2.81.
- Small market cap of ₹242 Cr and no visible moat in a competitive pharma market.
- Debt/Equity and promoter holding data are unavailable, limiting governance and leverage assessment.
AI Analysis
At ₹174.25, Denis Chem Lab wears a deceptively cheap multiple. The P/E of 12.23 is appealing, and a PEG of 0.26 screams value if 88.64% profit growth is durable. But I must ask: where is that growth coming from? Sales rose just 6.26%, so earnings are not compounding on strong demand. A 88.64% jump while top line crawls is often the result of cost cuts, a low base, or one-time gains. The latest quarter—₹46 Cr sales, ₹3 Cr net profit—underscores a thin operating margin that does not yet justify a runaway re-rating. The Piotroski F-score of 7/9 is encouraging and points to improving financial health, while ROCE of 13.89% is respectable. Yet ROE of 10.57% is only moderate, and with book value at ₹61.98, I am paying ₹174.25—2.81 times book—for a small-cap pharma with no demonstrated moat. The stock has already run from ₹56.10 to its 52-week high, so much of the good news is in the price. Graham would demand margin of safety; at 2.81 times book and a thin sales base, that margin is thin. I would need several more quarters of genuine top-line growth and higher margins before treating this as a gem. The dividend yield of 1.95% helps, but it is not enough. The label here is a possible turnaround in the making, but one year does not make a compounder. I prefer businesses with predictable double-digit sales growth and high returns on capital. Denis Chem Lab deserves monitoring, not a rush to buy. If profit growth stalls, the low P/E could turn into a value trap.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer