Fraser & Company (539032)

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

Key Financials

Strengths

• Shares trade at a 33% discount to book value: ₹4.85 market price versus ₹7.26 book value.
• Market cap of only ₹4 crore gives a small asset cushion in absolute terms if liquidation value is real.
• Latest quarter shows ₹1 crore of sales, confirming some operating activity remains.
• P/B below 1 with zero debt-equity data suggests possible balance-sheet focus, though disclosure is missing.

Concerns

• ROE of -15.76% and ROCE of -24.63% indicate clear value destruction rather than earning power.
• Piotroski F-score of 2/9 is a strong red flag on financial health.
• Profit growth at -150% with flat sales shows no sign of turnaround.
• No dividend, no promoter holding data, and no debt-equity disclosure limit trust in governance and capital allocation.

AI Analysis

At ₹4.85, Fraser & Company is a microcap trading and distribution business with a market cap of just ₹4 crore. On the surface, buying at 0.67 times book value looks like a classic Graham-style bargain, especially when book value stands at ₹7.26. But Graham insisted on a margin of safety rooted in earnings power and asset quality, not just a low price-to-book ratio. Here, the operating picture is disturbing. Return on equity is -15.76%, and return on capital employed is -24.63%. This is not a temporarily out-of-favour business; it is destroying shareholder value. Sales growth is zero, latest quarterly sales are only ₹1 crore, and net profit is essentially nil. Profit growth of -150% signals losses are deepening. The Piotroski F-score of 2/9 confirms a weak financial position. In the trading and distribution business, I don't see a durable moat. With no pricing power and no franchise to protect, a middleman can easily be squeezed out by customers and suppliers. The discount to book may look alluring, but a value trap is still a trap if the asset base erodes. There is no dividend, promoter holding is not disclosed, and debt/equity is also unavailable; I cannot assess capital allocation or alignment. As Graham said, price is what you pay, value is what you get. Here the price is low, but the evidence suggests the business value may be shrinking. A recovering company at a discount would be far more interesting. This seems like an asset play at best, with a tangible book cushion but no demonstrated earnings recovery. I would hold off until I see positive operating returns and proof that book value is real and not stale inventory or receivables.

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