Yash Chemex (539939)

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

Key Financials

Strengths

• Sales growth of 25.50% shows solid topline momentum in the latest period.
• Piotroski F-Score of 7/9 indicates improving fundamental health across margins and efficiency.
• Latest quarter is profitable with ₹1 Cr net profit on ₹34 Cr sales, keeping the company in the black.
• PEG ratio of 0.25 suggests apparent growth-value pairing if the 200% profit growth were sustainable.

Concerns

• ROE of 5.06% and ROCE of 8.13% are weak, pointing to poor capital returns and a lack of competitive advantage.
• P/E of 27.73 appears expensive for a low-margin trading business with no dividend yield.
• Stock has fallen sharply from its 52-week high of ₹111.00 to ₹54.42, indicating severe price volatility.
• Profit growth of 200% is likely from a low base and may not be repeatable; net margin is only around 3%.

AI Analysis

At ₹54.42, this is a small chemical trading company with a market cap of just ₹56 crore. Let's look beneath the surface. The reported profit growth of 200% and sales growth of 25.5% look impressive at first glance, but as Graham taught, one must examine the quality of earnings. The latest quarter shows net profit of only ₹1 crore on sales of ₹34 crore—a net margin of roughly 3%. That tells me this is a low-margin intermediary business, likely with little pricing power and no economic moat. ROE of just 5.06% and ROCE of 8.13% confirm that the company is not generating exceptional returns on capital. For a business with a P/E of 27.73, the market is paying a high multiple for earnings that could be volatile. The P/B of 2.29 means you are paying over twice book value, yet book value per share is only ₹23.79. While the Piotroski F-score of 7 suggests recent improvement in financial health, I must also note the zero dividend yield—I receive no cash while waiting. The PEG ratio of 0.25 looks tempting, but that is based on a 200% profit growth that is almost certainly unsustainable from a low base. Trading companies in chemicals face intense competition and cyclicality. I cannot call this a wonderful business. At best, it is a possible fast grower in an industry I generally avoid. I would need a margin of safety, and at 27 times earnings with returns on equity in single digits, I do not see it. The prudent approach is to watch from the sidelines.

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