Sh. Ajit Pulp (538795)

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

Key Financials

Strengths

• Trades below book value: P/B 0.84 with book value ₹268.80 against price ₹224.80.
• Trailing P/E of 9.78 and recent sales growth of 46.43% offer a cheap-looking earnings multiple.
• Piotroski F-Score of 7/9 indicates improving financial health across margins, leverage and efficiency.
• Latest quarter is profitable with ₹177 Cr sales and ₹8 Cr net profit, showing current operating traction.

Concerns

• ROCE of 7.43% and ROE of 10.10% are mediocre, suggesting this is not a high-return business.
• Profit growth of 304.84% is likely a low-base cyclical rebound; PEG of 0.06 should not be trusted as a sustainable growth signal.
• Zero dividend yield means no cash return to shareholders while the company reinvests at modest returns.
• Debt/equity is not disclosed, leaving leverage risk unknown; the stock near its 52-week low of ₹205–₹348 suggests market skepticism.

AI Analysis

At ₹224.80, Sh. Ajit Pulp trades at 9.78 times earnings and 0.84 times book value, with book value at ₹268.80. On its face, this looks like a Graham-style margin of safety. But price is only part of the equation; I have to ask whether the business deserves my capital. The reported momentum is striking: sales grew 46.43% and profit grew 304.84%. The latest quarter shows ₹177 Cr in sales and ₹8 Cr in net profit, a net margin of roughly 4.5%. A Piotroski F-Score of 7/9 suggests the fundamentals are genuinely firmer than the distressed paper sector usually looks. Yet the more I dig, the more I see a cyclical, not a compounder. ROCE is only 7.43%, and ROE is 10.10%. Neither clears the hurdle I need for a high-quality business. The dividend yield is zero, so the owner relies entirely on reinvestment; at these returns, reinvestment adds value slowly. The 304.84% profit jump and the PEG ratio of 0.06 look dramatic, but that is exactly what happens when you rebound from a depressed base in a cyclical paper cycle. I do not extrapolate that number. The stock is near the low end of its 52-week range of ₹205–₹348, which tells me the market is not fully convinced. The balance sheet is also a blank spot: debt/equity is unavailable, and with such low ROCE, leverage can be dangerous. I would wait and watch. If the next quarters maintain the margin, if leverage is manageable, and if returns on capital begin to climb, this could be an interesting cyclical purchase. For now, the asset cushion gives some protection, but earnings power and capital allocation are not yet proven. That is why I remain cautious.

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