Amba Enterprises (539196)

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

Key Financials

Strengths

• ROE of 20.35% and ROCE of 20.56% show strong capital efficiency.
• Sales growth of 27.66% and profit growth of 23.12% indicate solid momentum.
• PEG of 0.86 suggests the valuation is not excessive relative to growth.
• Piotroski F-Score of 7/9 points to sound financial health.
• Latest quarter sales of ₹103 Cr demonstrate meaningful scale for a ₹278 Cr market cap company.

Concerns

• Latest quarter net margin is only around 2% (₹2 Cr profit on ₹103 Cr sales), leaving little buffer.
• Price-to-book of 6.45 and dividend yield of 0.55% offer limited downside protection.
• Promoter holding is not disclosed, creating a governance transparency issue for a small cap.
• Debt/equity is not available, so true leverage and financial risk remain unknown.

AI Analysis

At first glance, Amba Enterprises looks like the kind of small compounder I enjoy studying. The numbers show a business compounding capital at a healthy clip: return on equity is 20.35% and return on capital employed is 20.56%, well above what an ordinary electrical equipment maker earns. Sales grew 27.66% and profit grew 23.12%, and at a P/E of 21.91 with a PEG of 0.86, the market is not paying an absurd price for that growth. A Piotroski score of 7 out of 9 also suggests the company isn't cooking the books or struggling with working capital. But I have to stop and remind myself: a wonderful business is only a wonderful investment if bought at the right price. At ₹216.55, Amba is trading at its 52-week high, with a price-to-book of 6.45 and a dividend yield of just 0.55%. This leaves little margin of safety. The latest quarter tells another story: ₹103 Cr of sales produced only ₹2 Cr of net profit, a margin under 2%. High growth is admirable, but if growth comes with razor-thin profits, a small hiccup can hurt. I also worry about what I cannot see. Promoter holding is not disclosed, and debt/equity is not available. In a small-cap, those blanks are red flags. Graham would insist on knowing who owns and controls the company. I need to see order flow, working capital trends, and consistency of margins before treating this as a durable franchise. It's a fast grower, but fast growth can turn into a value trap if capital allocation wobbles. For now, I'd rather wait for a better price or more transparency.

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