Franklin Leasing (539839)

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

Key Financials

Strengths

• Trailing earnings are still positive, with P/E 100.57 implying net profit of roughly ₹0.24 Cr; there is no reported annual loss.
• Latest quarter still generated ₹9 Cr of sales, showing some operating activity.
• Market cap of ₹24 Cr means a small absolute improvement in profits can have a large percentage impact.
• Price is at the higher end of its 52-week range, indicating some market interest.

Concerns

• P/E of 100.57 and profit growth of -41.18%: valuation is highly stretched relative to shrinking earnings.
• Latest quarter net profit of ₹0 Cr and ROCE of 0.93% show essentially no return on capital.
• Piotroski F-Score of 3/9 suggests poor financial health.
• Critical disclosure gaps: no book value, ROE, debt/equity, or promoter holding; dividend yield is 0%.

AI Analysis

I start with a simple question: what does Franklin Leasing own, and what does it earn? The numbers give little comfort. This NBFC has a market capitalisation of just ₹24 crore, but the P/E is 100.57. That is a rich price for a company whose profit has shrunk by 41.18% and whose latest quarter produced net profit of roughly nil. Sales growth is negative at -3.82%. Return on capital employed is 0.93%, meaning the business is barely earning anything on the capital it uses. A return this low would embarrass a banker. The Piotroski F-Score of 3 out of 9 is another warning; it points to weak profitability, higher stress, and deteriorating efficiency. I also notice what is missing: no book value, no ROE, no debt-to-equity ratio, and no promoter holding. In Graham's language, absence of disclosure is itself a risk. The dividend yield is zero, so there is no income to compensate while I wait. The stock price is at the top of its 52-week range, ₹14.15 versus a low of ₹8.92, so Mr. Market has become optimistic. But Mr. Market is there to serve us, not to guide us. At this price, the market is paying over 100 times earnings for a shrinking business. There is no margin of safety. The company may be a turnaround story someday, but a good investor waits for evidence before paying for hope. I need to see sales stabilise, profits turn positive in a meaningful way, and better disclosure. Until then, this remains a very small, very speculative stock, not a value investment.

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