Mercury Labs (538964)
Slow GrowerScore breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,021 |
| Market Cap | ₹127.87 Cr |
| P/E Ratio | 20.1 |
| ROCE | 8.94% |
| ROE | 9.13% |
| Dividend Yield | 0.42% |
| Profit Growth | 3.36% |
| Debt/Equity | — |
| Sales Growth | -6.23% |
| 52-Week Range | ₹620.55 — ₹1,021 |
| Sector | Pharmaceuticals & Biotechnology |
| Book Value | ₹450.54 |
Strengths
- Conservative balance sheet with no debt shown, reducing financial risk.
- Positive profitability with ROE and ROCE around 9%, and minor profit growth despite revenue decline.
- Piotroski F-Score of 6/9 suggests decent financial health.
- Company trades at its 52-week high, indicating current market confidence.
- Latest quarter remains net positive, with ₹1 Cr profit on ₹18 Cr sales.
Concerns
- Revenue declined 6.23%, while profit growth of 3.36% is very low; PEG of 5.98 makes the stock expensive for its growth.
- P/E of 20.10 and P/B of 2.27 for a company with ~9% ROE offer no margin of safety.
- Micro-cap size of ₹128 Cr and dividend yield of only 0.42% increase risk and limit return potential.
- Promoter holding and debt data are not available, reducing transparency.
AI Analysis
When I look at Mercury Labs, I see a small pharmaceutical company with a market cap of just ₹128 Cr. At ₹1021, the market is asking 20.1 times earnings and 2.27 times book value. For that price, I expect durable growth and high returns on capital. Instead, ROE is 9.13% and ROCE is 8.94% — hardly exceptional. Sales have actually declined by 6.23%, while profit grew only 3.36%. A PEG ratio of 5.98 tells me I am paying a heavy premium for very little growth. The latest quarter shows sales of ₹18 Cr and net profit of only ₹1 Cr; that is not the kind of earning power that justifies this valuation. There is some comfort in the apparent lack of debt and a Piotroski score of 6/9, but those are not enough. A 0.42% dividend yield offers no downside protection. The stock has already climbed from ₹620.55 to ₹1021.00, so I would be buying near the highs. As Graham would say, price is what you pay, value is what you get. I fail to see margin of safety. This is a slow-growing business, not a wonderful compounder. I would need a much lower price, or evidence that sales are returning to growth and returns on capital are improving, before this becomes an interesting investment. Until then, patience is better than participation.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer