Ultracab India (538706)

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

Key Financials

Strengths

• Return on equity of 15.61% and ROCE of 17.41% show decent capital efficiency at the operating level.
• Sales growth of 9.03% indicates some demand traction despite the earnings decline.
• The trailing P/E of 13.18 is modest if current earnings are at a sustainable trough, though that is a big if.
• The stock is at its 52-week high, reflecting strong market momentum and investor interest.

Concerns

• Profit growth is down 61.48% even while sales grew, revealing severe margin compression.
• Latest quarter net profit of ₹1 Cr on sales of ₹62 Cr implies a dangerously thin ~1.6% net margin.
• Price-to-book of 4.30 offers no margin of safety; Graham-style P/E × P/B is around 56.7, far above the acceptable threshold.
• Piotroski F-Score of 4/9, zero dividend yield, and missing debt/promoter data reduce confidence in the financial story.

AI Analysis

Let me look at Ultracab as a business, not a ticker. At ₹15.17, the market is paying ₹145 Crore for a cable maker. The P/E of 13.18 looks tolerable, but it is dangerously misleading when profit has fallen 61.48% while sales rose only 9.03%. That gap tells me the company is earning far less on each rupee of revenue. The latest quarter shows the pain: ₹62 Cr of sales generated just ₹1 Cr of net profit, a margin around 1.6%. This is not the kind of economics I want in a permanent holding. Book value is only ₹3.53, so I am paying 4.3 times tangible net worth. Benjamin Graham would balk at that. A P/B above 1.5 and a P/E above 10 together violate his simple safety screen; here the product is 56.7, far beyond any margin of safety. The ROE of 15.61% and ROCE of 17.41% are respectable, but they are backward-looking and could erode quickly if margins stay this thin. Debt/equity is not available, promoter holding is not available, and the FairStock score says insufficient data. I do not invest on missing information. The Piotroski F-score of 4 out of 9 is also weak, suggesting deteriorating fundamentals. There is no dividend, so the only return is speculative price appreciation, and the stock is already at its 52-week high of ₹15.17, up from ₹5.25. That is a 189% run, not a bargain. Cables are largely commodity products with input-price cyclicality and little pricing power. I see no durable moat here. This may be a cyclical bounce, but I cannot value it with confidence. In Buffett's words, it is far better to buy a wonderful business at a fair price than a fair business at any price. Ultracab, at this price and with this data, fails my test. I would wait for better numbers or a much lower price.

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