SAL Automotive (539353)

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

Key Financials

Strengths

• ROCE of 15.45% shows decent capital efficiency relative to the modest returns seen in many auto ancillary businesses.
• Latest quarter revenue of ₹88 Cr against a market cap of ₹125 Cr provides a meaningful operating base.
• Positive book value of ₹93.60 offers some underlying asset support, though the current price is far above it.
• Dividend yield of 1.20% indicates at least some cash return to shareholders despite weak profits.

Concerns

• Sales growth is -7.62% and profit growth is -30.71%; latest quarter net profit is just ₹1 Cr on ₹88 Cr sales.
• Piotroski F-Score of 3/9 points to deteriorating financial health.
• P/E of 21.52 and P/B of 5.56 are rich given negative growth and an ROE of only 10.47%.
• Debt/equity and promoter holding are not disclosed, limiting transparency and risk assessment.

AI Analysis

At ₹520, SAL Automotive is a small-cap auto components business with a market cap of ₹125 Cr. Let me be blunt: this is not the kind of investment Graham or I would circle. The stock trades at 21.52 times trailing earnings, while profit has fallen 30.71% and sales are down 7.62%. In the latest quarter, the company earned only ₹1 Cr on sales of ₹88 Cr—an extremely thin margin. The Piotroski F-Score is 3 out of 9, which is a warning flag that financial health is deteriorating, not improving. Book value is ₹93.60, so paying ₹520 means 5.56 times book for a business earning just 10.47% on equity. That is a poor trade. ROCE of 15.45% is respectable, but without pricing power in auto components, that return can erode quickly when the cycle turns. There is no evidence of a durable moat. The dividend yield of 1.20% offers little comfort. I also see that debt/equity and promoter holding are not available; I cannot properly assess leverage or alignment of interests. The stock has gone from ₹164 to ₹520 within the 52-week range, yet the underlying business has shrunk. That is exactly the kind of market optimism a value investor must ignore. I would wait for evidence of margin recovery, positive sales growth, and a better F-score. Until then, this is a cyclically weak business at a demanding price—not something I can own with confidence.

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