Sharanam Infra (539584)

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

Key Financials

Strengths

• Reported P/E of 3.16 and ROE of 48.77% appear statistically attractive on the surface.
• Piotroski F-score of 7/9 suggests recent improvements in profitability, leverage, and operational efficiency.
• Latest quarter shows explosive momentum: ₹24 Cr sales and ₹4 Cr net profit.
• Sales growth of 1254.55% and profit growth of 1000% indicate strong current demand or a significant business ramp-up.

Concerns

• Trading and distribution businesses typically have low pricing power and weak economic moats.
• Large gap between ROE (48.77%) and ROCE (13.46%) suggests returns are flattered by leverage or one-off/non-operating gains.
• Book value is just ₹0.20, so P/B of 3.55 means paying a heavy premium over tangible assets.
• No promoter holding disclosure, no dividend, and insufficient data for a reliable FairStock score raise governance and transparency doubts.

AI Analysis

I approach this the way Graham taught me: first protection of capital, then return. Sharanam Infra looks like a statistical bargain at ₹0.71, with a market cap of only ₹9 Cr and a P/E of 3.16. But cheap can be dangerous when the underlying business lacks a moat. This is a trading and distribution company, not a franchise with pricing power. Sales jumped 1254.55% and profit 1000%, and the latest quarter shows ₹24 Cr sales and ₹4 Cr net profit. Those are staggering numbers, and a Piotroski F-score of 7/9 hints at improving fundamentals. Yet I cannot ignore the inconsistencies. Book value is just ₹0.20, so despite the low P/E, I am paying 3.55 times stated book. ROE is 48.77%, but ROCE is only 13.46%—that gap tells me the equity return is being flattered by leverage or non-operating items, not by the business itself earning high returns on capital. There is no dividend, no promoter holding data, and the FairStock score is unavailable. For a ₹9 Cr microcap, that lack of transparency is a red flag. In trading and distribution, revenues can explode in one quarter and vanish the next. A zero PEG looks exciting, but it only makes sense if 1000% growth is repeatable, which is unlikely. I would need to see several more quarters of cash generation and stable margins before calling this an investment. It may be a speculative fast grower, but it is not a business I can confidently own.

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