LKP Securities (540192)

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

Key Financials

Strengths

• Modest headline P/E of 11.33 and a dividend yield of 2.05% provide some income support.
• ROCE of 18.40% and ROE of 12.27% show acceptable capital efficiency despite the recent slump.
• Book value of ₹10.69 offers a degree of asset backing near the current price.
• Latest quarter sales of ₹24 Cr show the business still generates meaningful revenue.
• Small market cap of ₹177 Cr leaves scope for recovery if market conditions improve.

Concerns

• Profit growth is down 48.69%, and the Piotroski F-Score of 3/9 points to deteriorating fundamentals.
• Latest quarter net margin is very thin: ₹1 Cr profit on ₹24 Cr sales.
• Sales growth of -2.09% shows no topline expansion in a highly competitive, cyclical industry.
• P/B of 2.02 asks investors to pay twice book value despite falling earnings, leaving little margin of safety.

AI Analysis

Let me start with what LKP Securities shows on the surface: a price of ₹21.63, a P/E of 11.33 and a dividend yield of 2.05%. At a glance this looks like a reasonably priced stockbroker. But Graham taught me to look beneath the surface. The latest quarter tells a more sober story — sales of ₹24 Cr and net profit of just ₹1 Cr. With profit growth already down 48.69% and sales growth negative at -2.09%, the earnings power behind that P/E is shrinking. A broker is a cyclical business, riding on market volumes, investor enthusiasm and competition; none of that gives me a durable moat. The Piotroski F-Score of 3/9 is a red flag. It says the balance sheet and operating fundamentals are weak right now. ROE at 12.27% and ROCE at 18.40% are not terrible, but I cannot pay 2.02 times book value for a business whose earnings are collapsing. The book value of ₹10.69 provides some floor, but a falling-earnings business in a competitive industry can trade below book for years. What would interest me is a turnaround: profit stabilisation, quarterly net profit improving, and sales growth turning positive. Until then, the cheap-looking P/E may be an illusion. I would keep this on the watchlist, not in the portfolio. In Ben Graham's language, price is what you pay, value is what you get — and right now the evidence of value is missing.

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