Mercantile Vent. (538942)

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

Key Financials

Strengths

• Trades at a 14% discount to book value: ₹26.69 price vs ₹30.89 book value per share.
• Reported growth is strong: sales up 36.70% and profit up 54.59%.
• PEG of 0.44 suggests the P/E of 20.21 is reasonable if growth persists.
• Piotroski F-Score of 7/9 indicates improving fundamentals.
• Latest quarter is profitable: ₹1 Cr net profit on ₹25 Cr sales.

Concerns

• ROE of 1.78% and ROCE of 1.53% are extremely low, showing poor capital returns.
• Net margin is thin: ₹1 Cr profit on ₹25 Cr sales is only ~4%.
• No dividend yield, so shareholders get no income while waiting.
• Promoter holding and debt/equity are not disclosed, limiting transparency.

AI Analysis

Let me look at this the way Graham taught: does the price leave a margin of safety? Mercantile Vent. trades at ₹26.69 while its book value per share is ₹30.89, so the market is offering the stock at roughly 86% of net asset value. That is an asset-play starting point, but it is not evidence of a good business. My first test of a business is return on capital. Here return on equity is just 1.78% and ROCE is 1.53%—far too low for a compounder. I also see no moat in these numbers: diversified commercial services is a competitive field, and there is no visible brand, pricing power, or scale advantage. The financial picture is incomplete because debt/equity and promoter holding are not disclosed; I do not like investing in the dark. On the brighter side, sales are up 36.70% and profits are up 54.59%, and the Piotroski F-score of 7/9 suggests improving fundamentals. But the latest quarter's net profit of ₹1 crore on ₹25 crore of sales works out to a thin ~4% net margin—growth can be fragile at that level. The stock is not obviously expensive if the growth is durable: P/E of 20.21 and PEG of 0.44 mean the market is paying less than one times the profit growth rate. Still, with no dividend yield and weak returns on equity, the margin of safety rests entirely on book value and on management eventually earning a reasonable return on those assets. I would wait for evidence of sustained earnings quality before treating this as more than a speculative asset play.

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