RSD Finance (539875)

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

Key Financials

Strengths

• P/E of 6.85 offers an optically cheap earnings yield of ~14.6% if current earnings are sustainable.
• Latest quarter net profit ₹8 Cr on ₹14 Cr sales indicates strong recent profitability.
• Piotroski F-Score of 6/9 suggests the company is not in immediate financial distress.
• ROCE of 11.15% shows the business earns a reasonable return on capital employed.

Concerns

• Sales growth of -54.49% shows severe top-line erosion; profit growth of 158% may be a base-effect or one-off.
• ROE of 6.36% is weak versus P/B of 2.59, meaning investors are paying a high multiple for subpar book value returns.
• Debt/Equity is unavailable for an NBFC, which is a serious transparency issue for a leveraged business model.
• Dividend yield is zero, so minority shareholders receive no income while waiting for the story to play out.

AI Analysis

At ₹153.10, this small NBFC with a ₹209 Cr market cap looks like a possible value situation with a P/E of 6.85. That translates to an earnings yield above 14%, which initially excites me. But Graham insisted on margin of safety beyond ratio math. Book value is ₹59.22, yet the market asks ₹153.10, so you are paying 2.59 times net worth for a business that earns just 6.36% on equity. That is a poor return on the assets underneath. ROCE 11.15% is okay, but not a wide-moat result. The latest quarter, net profit ₹8 Cr on sales ₹14 Cr, shows a very high margin. Yet sales growth is minus 54.49%; revenue is collapsing, and profit growth of 158% is likely from a low base or one-off factors. A PEG of 0.04 is statistical nonsense in my view. Piotroski F-score 6/9 tells me the firm is not in immediate distress, but no dividend means shareholders get no cash while waiting. As an NBFC, I must understand leverage; Debt/Equity says N/A. I cannot underwrite what is not disclosed. The stock trades at the top of its 52-week range, ₹153 vs ₹71.5. I prefer a bargain after a decline, not after a surge. This looks like a possible turnaround—higher profits after a revenue drop—but I need proof of stability. Business quality and moat? I don't see them in these numbers. I'd rather watch from the sidelines than pay a premium for hope.

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