Real Touch Fin (538611)

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

Key Financials

Strengths

• Sales grew 14.89%, showing the business can still expand top line.
• P/E of 11.44 and P/B of 2.85 are not extreme on a trailing basis.
• Book value per share of ₹30.05 provides an asset base; ROE of 11.13% means book value is compounding modestly.
• ROCE of 10.16% suggests operating capital is being employed, though not spectacularly.
• Small market cap of ₹109 Cr allows room for niche growth if execution improves.

Concerns

• Profit growth collapsed by 50%; latest quarter net profit of only ₹1 Cr on sales of ₹9 Cr indicates severe margin pressure.
• Piotroski F-score of 4/9 points to weak financial health and poor earnings quality.
• Zero dividend yield and undisclosed promoter holding/debt-equity limit transparency and shareholder return.
• P/B of 2.85 with ROE of 11.13% means the market is paying a premium for modest return on book value.

AI Analysis

I like to buy a business, not a ticker. Real Touch Fin has a headline P/E of 11.44, but that low multiple is only an invitation if earnings are dependable. They are not. Sales grew 14.89%, yet profit fell 50%. The latest quarter shows ₹9 Cr of sales and just ₹1 Cr of net profit—a razor-thin margin that, if annualised, is far below what the P/E implies. The Piotroski F-score of 4 out of 9 reinforces my caution: this is not a financially strong company. Its ROE is 11.13% and ROCE is 10.16%, respectable but not exceptional; and with a price-to-book of 2.85, I am paying roughly 2.85 times book for a business earning a little over 11% on that book. That leaves little margin of safety. In the 'Other Financial Services' industry, a moat is built on low-cost capital, underwriting skill, and trust. I see no evidence of such a moat here. There is no dividend yield to compensate me while I wait, promoter holding is not disclosed, and debt-to-equity is not provided—so I cannot gauge leverage or insider commitment. The PEG of 0.77 is misleading because it is set against sales growth, while profit growth is negative; Graham would not be fooled by such arithmetic. The stock is at its 52-week high of ₹85.50. That means the market is already celebrating something that the numbers do not yet show. I need proof of stability first: profit margins stabilising, book value of ₹30.05 compounding, and better fundamentals. Until then, this is a possible turnaround, not a proven compounder. My discipline: avoid until the figures and behaviour align.

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