Kwality Pharma (539997)

FairStock Score: 49/100 — MIXED

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

Key Financials

Strengths

• Latest quarterly net profit of ₹16 Cr annualizes to roughly ₹64 Cr against a market cap of ₹522 Cr, offering a low forward earnings multiple.
• Sales growth of 46.24% and profit growth of 94.61% show strong momentum, with a PEG of only 0.40.
• ROE of 23.29% and ROCE of 18.40% indicate efficient capital use in a competitive pharma industry.
• Piotroski F-score of 7/9 suggests solid overall financial health across profitability, leverage, and efficiency.
• P/B of 2.09 is not excessive for a business earning a high return on a book value of ₹238.63.

Concerns

• Trailing P/E of 28.25 means much is already expected; any slowdown could compress the multiple sharply.
• Zero dividend yield means no cash return to shareholders while the business is priced for high growth.
• The current price of ₹498.65 sits below the stated 52-week range of ₹828.80–₹2,315, which is unexplained and demands clarity before investing.
• No debt/equity or promoter-holding data is provided, leaving leverage and owner alignment unverifiable.

AI Analysis

At ₹498, Kwality Pharma is a puzzle worth studying. The trailing P/E of 28.25 is not cheap, but the latest quarter's net profit of ₹16 Cr annualizes to roughly ₹64 Cr against a ₹522 Cr market cap, a much lower forward earnings multiple. Graham would insist on a margin of safety, and I must ask whether the 46.24% sales growth and 94.61% profit growth are durable or a temporary blip. ROE of 23.29% and ROCE of 18.40% show decent capital efficiency, and a Piotroski F-score of 7/9 suggests a healthy fundamental posture, not a dying business. The P/B of 2.09 is acceptable for a growing pharmaceutical company, but zero dividend means the shareholder's return depends entirely on management's ability to reinvest at high rates. I like the PEG near 0.40, which argues that the market has not fully priced in the growth, but a Graham disciple is allergic to paying up for momentum. The quoted 52-week range disturbs me: the price is below the stated low. That could be a data error, a corporate action, or a red flag; either way, I would not commit capital until that is explained. There is no promoter holding or debt-equity figure, so I cannot judge alignment or financial risk. I would watch the next few quarters to see if the latest quarter's profit is repeated, and whether sales growth translates into cash flows. If the business can sustain this trajectory, the valuation is reasonable; if not, today's price may offer little protection.

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