Riddhi Steel (540082)

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

Key Financials

Strengths

• Sales growth of 59.65% and profit growth of 80.42% show strong recent momentum.
• PEG of 0.45 makes the growth look inexpensive relative to the trailing P/E.
• Piotroski F-Score of 7/9 points to improving fundamentals and earnings quality.
• Latest quarter sales of ₹247 Cr against a ₹48 Cr market cap gives huge operating scale.
• ROCE of 11.58% indicates the business is generating positive returns on capital.

Concerns

• Trailing P/E of 31.63 is rich, especially for a commodity steel business.
• Latest quarter net margin is only ~2.4% (₹6 Cr profit on ₹247 Cr sales), leaving no cushion for price drops.
• No book value, debt/equity, or promoter holding data; hidden leverage or ownership issues could change the picture.
• No dividend and a 52-week collapse from ₹276.10 to ₹58.00 signal high risk and volatility.

AI Analysis

Let's start with what I see: a small steel business with a ₹48 crore market cap but ₹247 crore sales in one quarter. That is a lot of revenue for a tiny price, yet the net profit is only ₹6 crore — a 2.4% margin. Steel is a commodity; thin margins expose you to every swing in raw material and selling prices. The 52-week range of ₹52.53 to ₹276.10 tells me this is a cyclical animal, not a predictable franchise. At ₹58.00, the P/E is 31.63, so I am paying a high multiple for trailing earnings. The growth numbers are enticing: sales up 59.65%, profit up 80.42%, and a PEG of 0.45 suggests the market has not fully valued that growth. But one good year in a cyclical industry is a dangerous basis for valuation. The Piotroski F-score of 7/9 is good evidence that the operating position is improving, and I like that. But Graham taught me to demand a margin of safety: I cannot compute book value, debt/equity, or promoter holding from the data. Those omissions matter. A 79% fall from the high could be an opportunity, but it could also be a value trap if leverage is high. This is not a business with a moat; it is a cyclical steel supplier. I would need conservative balance sheet proof, several years of cash flow stability, and better pricing power before making a purchase. The recent improvement makes it worth watching, not yet worth owning. Without asset backing, I sleep better staying away.

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